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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 [...]
Part of the problem with tracking the development of shadow banking in China is that there is no commonly accepted definition of what constitutes shadow banking. The closest thing we have to an official definition is from the Financial Stability Board (FSB), which was tasked by the G-20 to monitor and propose reforms to the [...]
China’s first quarter economic data is out and it is now possible to do an update on the progress economic rebalancing. For an explanation of these indicators and why they are important, refer back to our original post on the topic. 1. Urban Disposable Income Growing Faster than GDP Urban disposable income growth dropped sharply in the [...]
Shadow banking is a topic that conjures up images of back alley dealings and hidden accounts. While this may be true for small segments of shadow banking systems, much of shadow banking is out in the open and easily recognizable. For ordinary investors, the most visible form of shadow banking is shadow deposits. Shadow deposits [...]
Since Li Keqiang was tipped to succeed Wen Jiabao as China’s premier, analysts have been trying to come to a better understanding of Li’s thoughts on urbanization. This is because Li has prominently identified urbanization as the growth engine of the Chinese economy and one of the main focuses on the new administration. Li’s first [...]
Hearing on China’s New Leadership and Implications for the United States - February 7, 2013 Economic Rebalancing in China: For the past several years China’s top leadership has repeatedly described the country’s current economic model as “uncoordinated, unsteady, imbalanced, and unsustainable.” This language is in sharp contrast to what has been a decade of apparent success: [...]
The State Council’s newly released income inequality reform plan set forth an ambitious sounding goal that by 2015 the minimum wage should be 40 percent of the average wage throughout most of the country. Like many parts of the plan, this is actually a recycled policy from the 12th Five Year Plan that was released [...]
We first commented on China’s new income inequality plan back in November when there was still a bit of skepticism over whether it would be released at all (it has been in the works since 2004). The initial outline of the plan was released this week in a notice (CN) by the State Council. The [...]
Hot off the press, here’s our new policy brief on economic rebalancing in China. The paper takes an updated look at the key policy reforms necessary to achieve economic rebalancing, sketches out a feasible rebalancing scenario over the next decade, and analyzes the domestic political challenges. As always, your public and private comments on this paper are [...]
With the release of fourth quarter 2012 economic data, we can give an update on the economic rebalancing in China. For an explanation of these indicators and why they are important, refer back to our original post on the topic. 1. Urban Disposable Income Growing Faster than GDP Urban disposable income continued to grow moderately faster than [...]