China Economy

19

Australian dollar hit as Moody’s downgrades China

Moody’s turns interesting: Moodys downgrades China to A1 from AA3 Changes outlook to stable (from negative) Says rating reflects expectations that China’s financial strength will erode somewhat over the coming years Says stable outlook reflects assessment that at the A1 rating level risks are balanced GDP will remain very large ; growth will remain high

1

Chinese yield rocket fires boosters as tightening rolls on

Via Netral: China’s $1.7 trillion government-bond market is turning ever weirder. In a fresh sign of the nerves among investors caused by Beijing’s campaign this spring to make Chinese markets less risky, the yield on seven-year government bonds rose to 3.79% on Monday, above the yield on both five-year and 10-year bonds. The highly unusual

0

Beijing property freezes with shadow banking

Via Investing in Chinese Stocks. It seems like there are no transactions in Beijing’s housing market, and developers keep quiet out of fear reads the headline. Developers are used to playing on the edge of government restrictions, but the restrictions on converted apartments and credit tightening have shoved them over it via iFeng: 冰封的北京商住:新政后几乎零成交 开发商噤若寒蝉

1

Chinese deleveraging campaign continues

As expected, from Reuters: China’s financial deleveraging will continue given that a regulatory clampdown on risky lending hasn’t “achieved its goals”, a state-run newspaper said in a commentary on Wednesday. The Economic Daily, which is run by China’s cabinet, published the article just days after Premier Li Keqiang said China is capable of maintaining stability

20

Giant Chinese insurance ponzi hits the skids

Via Investing in Chinese Stocks. A leaked document circulating on the Chinese Internet shows one of China’s most aggressive sellers of universal life insurance is in trouble. Foresea Life was selling policies like hotcakes in order to fund parent Baoneng’s takeover attempt of Vanke. The chairman of Baoneng was banned from the insurance industry for

23

China has not back-flipped to more stimulus

Ambrose Evans-Pritchard is getting over-excited about another Chinese back-flip today: China’s authorities are increasingly worried by stress in the country’s financial system and the sudden slowdown in economic growth, fearing that it may now be too dangerous to press ahead with their draconian crackdown on shadow banking. The People’s Bank (PBOC) began signalling late last

1

China blinks!

So scream the headlines, via WSJ: President Xi Jinping’s call for financial stability ahead of a major leadership shuffle later this year led regulators to unleash a blitz of new rules. The banking regulator under new chief Guo Shuqing has cracked down on speculative investment practices that relied on borrowed money and has also imposed

0

Citi warns on China

From Citi, China caution ahead: …risky assets don’t usually fare that well when EMRA is low… …some market commentators in recent weeks have highlighted that perhaps there is a major risk that consensus opinion is again overlooking the influence of China’s credit cycles, and thus perhaps overstating the potential contribution of future Chinese demand growth

3

China eases deleveraging drive

Via Reuters: China’s central bank injected fresh funds through a medium-term lending facility on Friday while keeping a tight rein on short-term funding in what appeared to be a further effort to dampen speculative investment while keeping the economy adequately funded. The central bank said it had skipped daily open market operations on Friday, marking

1

Recession ahoy! Chinese yield curve inverts

Via MarketWatch: China’s $1.7 trillion government-bond market is exhibiting a new sign of stress: The yield on longer-term debt has fallen below that on shorter-term debt—an anomaly that some traders are blaming on Beijing’s efforts to reduce financial risk. Early on Thursday, the five-year yield AMBMKRM-05Y, -0.79%   rose to 3.71%, breaking above the 10-year

6

PBOC: Stop whinging, more tightening coming

Via SCMP: China’s financial regulators are signalling that they will continue to tighten rules and slash leverage, regardless of the short-term pain their moves bring, keeping with President Xi Jinping’s order to prioritise financial security. The Financial News, a publication under the People’s Bank of China (PBOC), said in a commentary on Monday that market