Chinese Economics Thread

[Jura The idiot]

now I read
Economic Watch: China accelerates establishing long-term mechanism for property regulation
Xinhua| 2018-03-25 16:13:18

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China will maintain stability and consistency of property regulatory policies this year and accelerate establishing a long-term mechanism for real estate regulation.

"China will not waver in its efforts to implement property market regulation and will maintain continuity and stability of policies in 2018," said Wang Menghui, minister of housing and urban-rural development.

Wang said that the relatively rapid growth in home prices has been effectively curbed and there have been positive changes in property market expectations.

As the government maintained purchase restrictions aimed at containing speculative demand, new home prices softened in the country's biggest cities and recorded slower increases in other major cities monitored by the government.

On a monthly basis, new home prices declined in 12 of the 15 first-tier cities, while those in another 55 major cities surveyed posted slower or flat growth in February. Average prices for new homes in the cities of Beijing, Shanghai, Guangzhou, and Shenzhen all fell from the previous month, data from the National Bureau of Statistics (NBS) showed.

Liu Jianwei, a senior NBS statistician, said that the cooling measures yielded desired results thanks to the differentiated control policies implemented by local authorities.

During previous years, rocketing housing prices, especially in major cities, had fueled concerns about asset bubbles. To curb speculation, local governments passed or expanded their restrictions on house purchases and increased the minimum downpayment required for a mortgage.

In addition, China will move faster to implement a long-term mechanism for property regulation that ensures supply through multiple sources, provides housing support through multiple channels, and encourages both housing purchases and rentals, said the minister.

This year's government work report reiterated that "houses are for living in, not for speculation."

"We will support people in buying homes for personal use, and develop the housing rental market and shared ownership housing," said the work report.

So far, 51 state-owned home renting companies had been set up in 12 pilot cities, where government-led rental management and service platforms were established, according to the minister.

Analysts agreed that to build a long-term regulation mechanism for real estate market, efforts also should be made from aspects of land, financing, tax, multi-tier housing supply, as well as property laws and regulations.

The interest rates for home loans have picked up in major cities last month, with the national average interest rates for first and second home purchasing loans increasing to 5.46 percent and 5.79 percent, respectively, according to data from the Rong360.com, a mobile financing platform.

Relatively tightened liquidity will effectively contain leverage and curb speculative demand in the housing market, said Yang Xianling from real estate agency Homelink.

Meanwhile, China will act against the violations by developers and property agencies, said the minister.

 

[LesAdieux]

amid trade tension with the US, China rolls out the Yuan denominated oil-future trading today

currently, there are three oil future trades: Chicago-WTI, London-Brent, and Dubai-Aman, all traded in USD.

Navarro is not going to like this, to him this is a strategic move by a strategic adversary to undermine the dollar.

China has been working on this for years, it's a big move, but it will take time for the impact to be seen.

 

[Jura The idiot]

now I read
China capable of resolving external impacts: central bank governor
Xinhua| 2018-03-25 22:34:09

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China's financial sector is capable of resolving external impacts, the country's central bank governor said Sunday when responding to questions on possible new risks from rising global uncertainties.

"If external impacts spread to China, our banking system and securities and insurance markets, equipped with quantity and price regulation, are fully capable of defusing the risks," Yi Gang, head of the People's Bank of China (PBOC), said at the China Development Forum in Beijing.

Yi stressed the significance of forestalling systemic risks and dealing with domestic issues. "If we can handle our own issues properly, we will have a sound foundation to fend off external impacts."

When addressing the forum, the newly-appointed PBOC chief listed the country's main financial work as to implement prudent and neutral monetary policy, promote financial reform and opening up, and defuse major financial risks to maintain stability.

As the economy has posted better-than-expected performance, China will keep its policy stance and strengthen financial support for the real economy, Yi said. The macro prudential regulatory framework will be improved, and M2, new loans and total social financing will see reasonable growth.

Steady progress has been made in China's financial opening up and more measures are in the pipeline to ease access control, Yi said. "China will in the next step comprehensively adopt a negative list for market access management to propel two-way opening up in its financial sector."

Yi said China will steadily push for the internationalization of the renminbi, with efforts to further liberalize the capital account and enhance the global use of the currency.

Yi also highlighted the ongoing battle against financial risks, saying the country will move to fix short links in financial supervision and crack down on illegal activities.

He cited risks in corporate leverage, market violations such as shadow banking, and some rampant financial holding companies.

China will adopt market-based measures including the debt-to-equity swap to rein in the rapid growth of social overall debts, Yi said.

 

[Jura The idiot]

now I read
China world's biggest source of blockchain patents in 2017
2018-03-26 15:01 GMT+8

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Chinese companies pushed forward research into blockchain technology last year, with the country submitting more than half of all global blockchain patents in 2017, according to data compiled by the World Intellectual Property Organization (WIPO).

225 patent applications were filed by Chinese blockchain companies last year, a huge increase on the 59 patents filed in 2016. Globally 406 patent applications were made, with blockchain now being applied in a huge variety of sectors, ranging from Fintech to controlling information along supply chains in agriculture.

The data did not include patents related to Bitcoin or other cryptocurrencies, many of which operate using blockchain technology. American and European companies dominated the cryptocurrency sector in terms of protecting intellectual property, with 602 new crypto-related patents filed in 2017.

The boom in patent applications from China suggests an uptick in activity in blockchain research and development. Last September saw

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opened by the China Academy of Information and Communications Technology, a research institution under the Ministry of Industry and Information Technology.

Chinese tech giant Ant Financial and bank ICBC have both

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in the country, while other blockchain innovations launched in the country have included

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and even poultry farms where

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.

Last year,

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showing that China handled 3.691 million trademark registration applications in 2016, while

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by WIPO in terms of international patents.

 

[Dizasta1]

Death of US dollar? China launches petro-yuan to challenge greenback’s dominance

The highly anticipated yuan-backed crude oil futures have been launched in Shanghai. China is the world’s biggest oil consumer, with eyes on rival benchmarks Brent and WTI as well as the US currency.

Trading of the new oil futures contracts for September settlement started on the Shanghai International Energy Exchange at 440.20 yuan ($69.70) per barrel, reports Chinese daily the South China Morning Post. Some 18,540 lots have reportedly been sold and purchased so far.

The long-awaited step evoked a surge in global prices for oil with Brent Crude soaring to $71 a barrel for the first time since 2015. US crude benchmark West Texas Intermediate (WTI) reached the highest level in three years at $66.55 per barrel, before retreating to $65.53.

Experts see China’s yuan-dominated contracts as historic as the new futures symbolize the first time that foreign investors can access a Chinese commodity market. The launch ends years of setbacks and delays since the country’s first attempt at listing the securities in 1993.

At the same time, the petro-yuan launch is seen as a blow to the US dollar that has been weakening in recent months. The US dollar is the predominant settlement currency for oil futures contracts. On Monday, the greenback slipped to a 16-month low against the Japanese yen, but remained steady against a basket of six major currencies.

Chinese authorities have reportedly accelerated the launch amid growing crude imports. Last year, the country outpaced the US as the world’s number one importer of oil. Thus, the contracts may not only help to win some control over pricing from the major international benchmarks, but also promote the use of Chinese currency in global trade.

The greenback will get weaker, as soon as other nations have a real credible alternative to it, Ann Lee, Adjunct Professor of Economics and Finance at New York University and author of the book ‘What the US Can Learn From China’, told RT.

“It is more of a game changer for the US. As soon as other nations have a real credible alternative to the US dollar, they can dump dollars and switch to the yuan which can spark a dollar crisis. If that happens, not only will there be inflation from the tariffs, but also from the flood of dollars,” said Lee.

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[Klon]

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China does not plan to further ease family planning policies, despite the less-than-enthusiastic response to a loosening of rules in 2016, as couples continue to worry about the high costs of parenting and a lack of child care facilities in the country, according to a senior official who oversees the policy.

Policymakers are set to review the two-child policy, which was introduced in 2016, before making any further changes to family planning guidelines, Wang Peian, a deputy director of the National Health and Family Planning Commission, told Caixin on the sidelines of China’s annual political meetings in Beijing.
[The rest is behind a paywall.]

We'll see how long the current arrangement lasts. I predict all restrictions will be lifted reasonably soon, let's say within five years. It's pretty clear that the fertility rate won't see a major increase without a change in policy.

 

[solarz]

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We'll see how long the current arrangement lasts. I predict all restrictions will be lifted reasonably soon, let's say within five years. It's pretty clear that the fertility rate won't see a major increase without a change in policy.

The fertility rate will increase when the cost of child-rearing drops. Right now, the high cost of living space, child care, and education is keeping the birth rates down despite the relaxation of the policy.

 

[Jura The idiot]

now I read
China Focus: China launches crude oil futures trading
Xinhua| 2018-03-26 16:36:46

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China on Monday launched trading of yuan-denominated crude oil futures contracts at the Shanghai International Energy Exchange, the first futures contracts listed on China's mainland to overseas investors.

The listed futures are contracts to be delivered between September 2018 and March 2019. The benchmark prices of 15 listed contracts were set at 416 yuan (65.8 U.S. dollars), 388 yuan and 375 yuan per barrel, depending on delivery date.

Li Qiang, Shanghai's Party chief, and Liu Shiyu, chairman of China Securities Regulatory Commission, hit the gong together to open the trading session.

The price of SC1809 contracts started at 440 yuan per barrel and closed at 429.9 yuan per barrel, which is 3.34 percent higher than the benchmark price. The total turnover hit 17.6 billion yuan.

On the first trading day, the 15 listed crude oil contracts changed hands in a total of 42,300 transactions. The total turnover amounted to 18.3 billion yuan.

Trading margins for the futures were set for 7 percent of the contract value. The upward and downward trading limits were set at 5 percent, with the trading limits on the first trading day set at 10 percent of the benchmark prices.

Initially, U.S. dollars may be used as deposit and for settlement, and in the future, more currencies will be used as deposit.

"China is the world's largest importer of crude oil, and the introduction of RMB-denominated crude oil futures contracts represents a milestone for China's futures market," said David Martin, Asia Pacific Head of Global Clearing at J.P. Morgan.

He said J.P. Morgan is pleased to offer the futures contracts in China to global clients immediately.

Yang Xiaoping, president of BP China, said China's crude oil futures offer companies in the real economy a hedging tool that can better reflect market conditions in Asia.

The Asia-Pacific region has surpassed America and Europe in crude consumption. China is the world's second-largest oil consumer after the United States. The country imported 420 million tonnes of crude oil in 2017, ranking first in the world.

Zhang Hao, chair of CITIC Futures Co. Ltd., said that more futures markets, such as iron ore, are expected to open to offshore investors. Yuan-based futures will help promote the yuan as a global currency.

 

[Klon]

The fertility rate will increase when the cost of child-rearing drops.

When should we expect the cost to drop? In any case, there's no guarantee of an increase.

Right now, the high cost of living space, child care, and education is keeping the birth rates down despite the relaxation of the policy.

Of course, the policy itself also limits the birth rate.

 

[manqiangrexue]

When should we expect the cost to drop? In any case, there's no guarantee of an increase.



Of course, the policy itself also limits the birth rate.

I think right now, most families are not limited by the policy; they are limited by their own abilities to take responsible care of these children. BUT just due to the sheer size of China's population, there are also many families that could afford to and would want to have 4 or more children if the policy did not limit them. So if the policy were lifted, the majority of the growth is expected to come from those families.