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This blog monitors ongoing developments in China's economy, analyzes the impact of policy changes, and informs readers about new PIIE research on China.
Recently there has been a growing concern among some inside and outside of China about the impact of the Japanese quantitative easing program on the Chinese economy. In the Financial Times, David Li wrote that “China has become the de facto shock absorber for Abenomics.” These fears are misplaced. The April edition of the IMF’s [...]
Following his diplomatic tours in Russia, South Africa, and Latin America after taking office in March, President Xi had a meeting with Barack Obama in Southern California’s Rancho Mirage on June 7 and 8. These visits, besides deepening of bilateral relations with these countries, show three main features: China is adopting a less defensive and [...]
During the press conference at the conclusion of the IMF’s Article IV Consultation with China, Deputy Managing Director David Lipton shed a bit of light on China’s debt situation. In the context of emphasizing the need for overall fiscal reform, Lipton revealed that government debt had now reached 50 percent of GDP and the country was running [...]
Since the reform era began, high GDP growth has been important to a successful career in Chinese politics particularly at the local level. The new Xi-Li administration is now hoping to change that. Since the 18th party congress, Chinese new Xi-Li administrations have emphasized improving the quality and efficiency of growth (提高质量和效益) and repeated the [...]
When Presidents Obama and Xi Jinping meet for a historic private summit this week, the California desert air will be rife with the rhetoric of cooperation and partnership. The reality is that the two countries are engaged in indirect economic skirmishing that could slowly corrode the rules-based multilateral economic system, embodied in the International Monetary [...]
The ASEAN region has become a hot investment destination for China’s outbound investment amid a weak global economy. For example, Xinyuan Mining, a Chinese mining company, has obtained an exploitation license for a 28 mn square meter gold mine in Cambodia. Additionally, Canxiang Mining purchased a portion of Canadian company Angkor Gold’s exploration projects in [...]
Concluding this year’s Article IV mission, IMF officials gave a stark warning on credit growth: “Notwithstanding this relatively favorable near-term outlook, China’s economy faces important challenges. In particular, the rapid growth in total social financing—a broad measure of credit—raises concerns about the quality of investment and its impact on repayment capacity, especially since a fast-growing [...]
Owners of the debt of local government special purpose vehicles (SPVs) should choose wisely and be cautious. At least this is the message central government officials are communicating to China’s financial markets. Two weeks ago, Premier Li Keqiang identified “controlling the risks of local government debt” as one of his administrations key reform initiatives. But [...]
Earlier this week Standard and Poor’s released a headline-grabbing report on global corporate borrowing. The report estimates that there will be $53 trillion in new corporate borrowing between now and 2017. Of that $53 trillion, Chinese corporations will account for a whopping $17.6 trillion, 33 percent of the total. When you dig into the details you [...]
Public debt levels in China are an issue of ongoing concern. In particular after the 2009 stimulus concern over the sustainability of debt levels increased when China National Audit Office announced that local government debt rose from 17.7 percent of GDP in 2008 to 26.5 percent in 2009. A recent IMF working paper suggests these [...]