Reforms in China?
“Local governments issued $200bn of bonds in June and July under a new debt-swap plan. This frees up the equivalent for new loans by banks to credit-starved companies. China’s finance minister, Lou Jiwei, said on Friday that the cap on these bonds would be raised from $310bn to $500bn, a form of stimulus.” [Link]
Jamil Anderlini continues to write stellar stuff in FT on China:
Not only have global investors lost faith in China’s mandarins but within China itself the reform-minded officials who have overseen the turmoil have also been widely discredited, their plans for market-oriented economic reforms now in tatters.
The main reason for renewed state intervention late this week was a directive from top party leaders to provide a backdrop of rising markets when Beijing hosts a huge military parade next Thursday to commemorate the 70th anniversary of the “Victory of the Chinese People’s War of Resistance Against Japanese Aggression”, according to market participants and people familiar with the matter.
But since taking power in 2012, Mr Xi has concentrated decision-making power in his own hands to such an extent that his weakened underlings are unable to make firm decisions and stick with them. [Link]
China ready to launch military power from artificial islands in South China Sea [Link -article worth reading]
A crude translation but you get the picture:
China’s private bosses, more than 80 percent of enterprises facing collapse risk, legal risk. Typhoon cover when the ship, the captain must be the most unlucky own – crew can escape, but the captain could not bear his boat! [Link]
Tweets by George Chen of South China Morning Post suggest that
China’s Securities Regulator, CSRC, met with top heads at 50 major brokerages on Aug. 29 and urged them to continue to stabilise the stock market;
that China’s state agency for margin finance is raising 1.4 tln RMB interbank loans to prepare for a new round of stock market rescue and
China’s deputy Finance Minister wanted to let pension funds buy stocks ‘as soon as possible’ (market expectation: RMB1.0trn).
Apparently, lessons not learnt and hence, will be repeated.
A good bit of history on U.S buying silver up in the 1930s and causing money contraction in China [Link]. A similar move today will be to tighten global dollar liquidity and that is best done through higher rates. So, this is interesting and encouraging.
Great story in Wall Street Journal on how China’s collapse has upended Brazil. Did not realise that their trade with China rose more than 40 times since the new millennium! Also, fascinating insight into hubris – Brazil Foreign Minister apparently had the world map upside down – suggesting that, post-crisis, the world had changed! Amazing how quickly people lose touch with reality.
India’s TCA Srinivasa Raghavan has a simple, no non-sense thesis on how India should appeal to the dog’s owner (referring to Pakistan and China).
Willem Buiter wants a consumption-oriented fiscal stimulus in China monetised by the People’s Bank of China [Link – I sincerely hope they will go for it so that the world can launch into a full-scale beggar-thy-neighbour currency policies immediately]