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China news tagged with: overheating (61)

• Risks of Overheating is Over for China

  

  From Economic Observer Online:

  China has averted the threat of its economy overheating, concluded a recent report issued by China’s State Information Center (SIC) on the country’s present economic situation.

  The report also projected that the Chinese economy would likely to slow down further in the second half of this year.

  Is the Chinese economy overheating in the first place? The question has drawn different answers from economists, with one camp maintaining that it has since 2003, while another that China was still developing and if its economic growth dropped too much too fast, the consequences would be more severe than overheating.

  With the latest report revealing that the economy had been contracting marginally for seven months straight, some quarters started to express optimism that Chinese regulators might relax the tight macro-controls imposed since last year to prevent overheating.

  The EO spoke to economists from the private and public sectors to shed some light on the implications of the report. Those interviewed were Zhu Baoliang, chief economist for the economic forecasting department of the State Information Center; Chen Xingdong, chief economist of BNP Paribas Peregrine in China; and Zhu Jianfang, chief macro-analyst for CITIC Securities.

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  • July 23, 2008 3:55 AM

• China’s Monetary Policy Is `Too Tight,’ Bankers Say

  

  From Bloomberg:

  Chinese bankers say monetary policy is too tight and their expectations for interest rates to rise have eased, a central bank survey showed.

  Policy is “tight” or “too tight,” according to about two-thirds of 2,900 heads of financial institutions surveyed by the People’s Bank of China this quarter. The results, published on the central bank’s Web site today, didn’t give more detail on reduced expectations for a rate increase next quarter.

  China’s central bank this month ordered lenders to set aside a record proportion of their deposits as reserves, seeking to cool inflation as energy and raw-material costs surge. It has kept rates on hold in 2008, after six increases last year, to avoid attracting money from abroad that may stoke price gains in the world’s fourth-largest economy.

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  • June 25, 2008 6:37 AM

• China’s Parallel Universe Fades - Geoff Dyer

  

  From The Financial Times:

  There have been many casualties in the past few days of stunning share price declines and one of those could be the idea that the Chinese market operates in its own parallel universe.

  Mainland shares had attracted a huge amount of overseas interest in recent months, not just because of the two-year surge in share prices but also because some investors hoped China’s relatively closed capital market could act as a hedge against more inter-linked global markets. When New York, London or Hong Kong went in one direction, Shanghai often seemed to go the other way.Yet not only has this week’s panic selling raised fears that China’s bull run is well and truly over, the Shanghai market has also been moving in lock-step with Hong Kong and other international bourses. [Full Text]

  See other opinions on China’s stock market issue from CDT, click here .

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  • January 23, 2008 10:20 AM

• China Wonders if Its Stock Boom Is Over - David Barboza

  

  The New York Times writes about fears that the sudden downturn in China’s stock market will create instability in the run-up to the Olympics:

  This country’s young stock market, which only came into being in 1990, has been prone to frenzied and hysterical buying and selling. Big price swings are closely watched, not just by economists but by political analysts as well.

  And the latest evidence is not good. Investors sold furiously on Tuesday, compounding losses from a huge sell-off in Asia and Europe on Monday, while markets were closed in the United States for the Martin Luther King Day holiday.

  The Shanghai composite index dropped 7.2 percent Tuesday to close at 4,559.75; the Shenzhen composite fell 7.7 percent; and the Hang Seng index, the bellwether of the much longer-established stock market in Hong Kong, plunged 8.7 percent to close at 21,757.63, down by nearly one-third from its high of about 31,600. [Full text]
  
  

  
  
  Meanwhile, an article in China Daily links the sell-offs of stocks to fears of a impending recession in the U.S. See also “A Crash Is China’s Chance For Reforms” by Minxin Pei and Wayne Chen, posted earlier today on CDT.

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  • January 22, 2008 9:46 PM

• Photo: An Attempted Suicide on Wangfujing as the Stock Market Fell - Dwnews.com

  

  A man tried to commit suicide in Wangfujing business center in Beijing, when the Chinese stock market slumped recently. A group of policemen hurried there and tried to save him. From forum.dwnews.com , produced by animoto:
  
  

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  • January 22, 2008 5:34 PM

• China’s Cabinet to Set Price Controls - Reuters

  

  From Reuters via The Financial Times:

  China’s cabinet said on Wednesday that it would temporarily intervene in the market to curb price rises of basic necessities like food, underlining its concern over mounting inflationary pressures.

  China is currently facing its worst consumer inflation in 11 years, driven largely by soaring food prices. Inflation has sometimes been a source of social unrest. With immediate effect, producers of daily necessities that are above a certain size will have to get government approval before raising their prices, a regular meeting of the State Council chaired by Premier Wen Jiabao concluded. [Full Text]

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  • January 9, 2008 8:38 AM

• China’s Central Bank Chief Reaffirms Tight Money Policy for 2008 - Reuters

  

  From Reuters via International Herald Tribune:

  China’s central bank will implement a tight monetary policy in 2008, using a range of tools to keep a check on liquidity, the central bank governor, ?Zhou Xiaochuan , reaffirmed.

  The People’s Bank of China has waged a war on excess liquidity and inflation in 2007, raising interest rates six times and increasing the proportion of deposits that banks must hold in reserve 10 times, to a record level. Still, annual consumer inflation is running at the quickest pace in over a decade, and many economists are concerned that it could spill over from food into the broader economy. [Full Text]

  [Image: Chinese officials have been hinting that the country's leadership sees advantages in a stronger yuan., by Diego Azubel from European Pressphoto Association.]

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  • December 30, 2007 2:33 PM

• Banner Year for China Stocks - AP

  

  From AP via CNNMoney.com:

  China’s stock market wound up a stellar - and turbulent - year Friday, with its benchmark Shanghai Composite index having soared nearly 97 percent, making it the world’s best-performing major stock index in 2007.

  But worries that authorities will raise interest rates or take other steps to cool the country’s blazing growth caused the market to drop slightly in Friday’s trading, with the Shanghai index falling 0.9 percent to 5,261.56 points. The Shenzhen Composite Index for China’s second, smaller market dipped 0.4 percent to 1,447.02. News of the assassination of Pakistani opposition leader Benazir Bhutto - which heightened concerns about instability in Pakistan and the surrounding region - also gave investors an excuse to take profits, traders said. [Full Text]

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  • December 28, 2007 10:30 AM

• China’s IPO Juggernaut Thunders On - Sundeep Tucker

  

  The year of 2007 is regarded as a year of overheating for the Chinese economy, especially in the financial market. This year, IPOs and domestic merger and acquisition activities in China increased continually. Overseas investors are envious of the booming capital market in China; however, they are also cautious about the future success of capital raising and economic growth.
  
  The Financial Times writes about this year’s IPO status quo and forecasts for next year:

  Overseas stock exchanges could be forgiven for feeling a pang of envy this year as they watched the flood of initial public offerings in China and India. The capital markets in each country benefited from record levels of activity, fuelled by soaring growth.

  On numbers China is ahead of India, though a straight comparison is unkind given that the mainland has some catching up to do, not having recognised the concept of publicly listed equity until 1991. Combined issuance this year by Chinese companies is on course to generate more than $100bn, with an estimated $65bn raised by A-share listings in Shanghai and Shenzhen and the bulk of the remainder through H-share listings in Hong Kong. [Full Text]
  
  

  In another article, the FT looks at this year’s domestic M&A deals in China:

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  • December 19, 2007 10:06 AM

• China to Order Banks to Raise Cash Reserves - David Barboza

  

  From New York Times:

  China said today that for the 10th time this year, it would order banks to raise the amount of cash they set aside, in order to curb inflation and prevent the economy from overheating.

  The Central Bank said that it had ordered banks to increase their reserve ratios by a full percentage point, to 14.5 percent, in an effort to tighten the supply of money available for loans. It was the largest single reserve ratio move in four years.

  Economists said the move showed that Beijing was growing increasingly worried about growing inflationary pressure and the threat of a severe economic downturn before next summer, when Beijing is set to play host to the Olympic Games. [Full Text]

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  • December 9, 2007 4:49 AM

• China in Fresh Curb on Bank Lending - Jamil Anderlini

  

  From The Financial Times:

  China is to extend a clampdown on new bank lending into next year because of fears that rising inflation could become unmanageable, according to bankers, officials and economists.

  An annual economic policy meeting of top political and economic leaders that wraps up on Wednesday in Beijing is expected to decide to cap the value of new loans that banks can extend in 2008 at the same level as this year. In the first 10 months of this year, before a crackdown on new loan growth was implemented, domestic and foreign banks in China had extended Rmb3,505bn ($474bn) in new loans. [Full Text]

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  • December 5, 2007 9:59 AM

• China Plans `Tight’ Monetary Policy Next Year to Cool Economy - Li Yanping

  

  From Bloomberg:

  China plans to shift to a “tight” monetary policy in 2008, signaling the government may raise interest rates further and allow quicker currency appreciation as the economy heads for its fastest expansion in 12 years.

  The central bank changed its stance from the “moderate tightening” bias of recent months and “prudent” policy of the preceding decade, in a statement released today at the end of a three-day meeting of China’s top leaders and financial officials.

  The change underscores the government’s failure to cool the world’s fastest-growing major economy after five interest rate increases this year. China’s economy grew 11.5 percent in the third quarter, inflation is running at a decade high and the benchmark stock index has more than doubled in 2007, as an export boom pumps cash into the financial system. [Full Text]

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  • December 5, 2007 6:38 AM

• Chinese Developers Plan HK Issue - Sundeep Tucker

  

  From The Financial Times:

  Two property developers based in southern China plan to list in Hong Kong next year, underscoring the continuing appetite for development capital to take advantage of the mainland’s surging real estate sector.

  Hengda Real Estate Group , based in Guangzhou, has hired Goldman Sachs , Merrill Lynch and Credit Suisse to manage an initial public offering expected to raise about $1.5bn, according to people familiar with the matter. The investment banks declined to comment. [Full Text]

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  • November 15, 2007 7:48 AM

• China’s Central Bank Raises Reserve Requirement For Banks Again To Try To Slow Economy - AP

  

  From AP, via International Herald Tribune:

  China’s central bank ordered commercial banks Saturday to keep more money on hand, raising a key reserve requirement yet again to try to rein in the rapid lending that is fueling torrid economic growth.

  The People’s Bank of China said the reserve requirement will be raised half a percentage point, to 13.5 percent, as of November 26.

  It was the ninth such increase this year. The move was intended to “strengthen liquidity management in the banking system and check excessive credit growth,” the central bank said in a brief statement on its Web site. [Full Text]

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  • November 10, 2007 4:07 PM

• China To Redefine Foreign Direct Investment - Sung Hin Jason Chan

  

  From China Rising:

  One of China’s leading economists, Professor Lin Yifu , recently said of China’s position in the world: 4th in GDP, 3rd in Trade, 2nd in Foreign Direct Investment and 1st in Foreign Exchange Holdings . Perhaps the fact that China is second and first in areas that has the word “foreign” in its title led many in China’s business arenas to reconsider their protectionist positions.

  Now the party state has heard the call, and it appears the ongoing debate on the future of foreign direct investment (FDI) is coming to a temporary close. Back in March, China already “equalized corporate tax rates paid by local and overseas enterprises.” That’s 30 years of favorable treatment to foreign firms out the window. But to further the process, Beijing issued rules to “prohibit or limit foreign investment in key industries as it seeks to cool its overheated economy and clean up its damaged environment.” Now that’s a huge step. [Full Text]

  See also: Chinese Experts Warn Cash Surpluses Risk Overheating Economy from Voa News.

  » Read more
  • November 10, 2007 9:23 AM

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