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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 [...]
Chinese equity markets are beginning to crackdown on loss-making companies. The Shenzhen Stock Exchange recently delisted two loss-making companies – Jiangsu Chinese Online Logistics and Powerwise Information Technology Co. These were the first two companies be delisted from mainland exchanges since December 2007. The delisting procedures were part of efforts by the China Securities Regulatory [...]
The pace of Chinese intervention in the foreign exchange market has slowed dramatically, but just how much is a bit of an open question. The People’s Bank of China (PBoC) releases a monthly series on foreign exchange reserves. This number receives a lot of attention because it is high frequency and gives the overall stock [...]
It can be difficult to keep up with the torrent of Chinese economic data. For every statistic showing economic recovery there is another which indicates that growth is still slowing. To cut through the noise, it’s important to identify which indicators show that the Chinese economy is rebalancing towards a more sustainable growth model. This [...]
The Survey and Statistics Department at the People’s Bank of China (PBoC) has once again proven itself to be a source of interesting new policy ideas to deal with China’s economic problems. The report, Factors Behind Germany’s Economic Resurgence and Lessons for China (CN), outlines several policy prescriptions used by Germany that have relevance for [...]
Although we have been critical of the pace of reform in China in recent years, it is important to acknowledge the flurry of activity that has taken place in the first half of this year. The Chinese and Western press have been chock-full of new financial initiatives pushed forward by policymakers. Most of these initiatives [...]
China is conducting a large experiment with interest rate liberalization, albeit in an uncontrolled and seemingly unplanned way. The pace of official interest rate liberalization has been glacial since 2004, only recently revived with the decision to increase flexibility around the benchmark deposit rate. Instead, an alternative system of unregulated deposits called wealth management products [...]
The People’s Bank of China and China Southwest University of Finance and Economics released joint research collaboration this month called the Chinese Household Finance Survey (Chinese language). The headline picked up by locals newspapers was that 85 percent of Chinese households own their own home. According to the report, 69 percent of households in urban [...]
Criticism of bank profits has now reached the highest levels of the Chinese political system. In a national radio address this week, Premier Wen Jiabao stated that China’s large banks were excessively profitable. Wen’s solution was to open the system up to private capital and smash the monopoly of the large banks. He even referred [...]
Quarterly profit announcements by Chinese banks this month have set off a national debate over whether the banking sector is excessively profitable. Criticisms of bank profitability have even come from prominent former People’s Bank of China (PBoC) officials. Wu Xiaoling described bank profits as unreasonable (Chinese language) and Li Daokui referred to banks as profit-devouring [...]