1. Bloomberg: Yi sees ‘bold’ yuan reform with gradual rate liberalization
China is pushing forward on exchange-rate reforms in a “bold” fashion, while adopting a more gradual approach toward loosening controls over interest rates and capital markets, according to
People’s Bank of China Deputy Governor Yi Gang. While China should advance reforms on all three fronts, it is proceeding at different speeds to maintain financial stability, Yi said at a panel hosted by Johns Hopkins University’s School of Advanced International Studies in Washington. “You can push all three simultaneously, keeping in mind the relationship
among the
three and make your program feasible and efficient,” Yi said. “In my mind, there’s a sequence. You have to, in a bold fashion, liberalize the exchange rate and make the exchange rate much more flexible.
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2. Bloomberg: Lew urges China to show commitment to pursue market-set currency
U.S. Treasury Secretary Jacob J. Lew urged Chinese officials to demonstrate that they remain committed to pursuing a market-determined exchange rate. “They need to get back on the path of demonstrating that they’re committed to moving towards a market-determined exchange rate,” Lew said in an interview on CNBC yesterday. “If they want it to be a reserve currency some day, they need to demonstrate that,” he said, referring to the yuan.
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3. Bloomberg: China’s inflation stays below target as producer prices drop
Consumer inflation in China remained below the government’s target in March while factory-gate deflation deepened, giving Premier Li Keqiang more scope to roll out measures to support growth. The consumer price index rose 2.4 percent from a year earlier, the National Bureau of Statistics said today in Beijing, matching the median estimate of economists in a Bloomberg News survey. The producer price index fell 2.3 percent, after a 2 percent drop in February, extending the decline to 25 months.
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4. WP - David Ignatius: Warning signs of trouble in China’s markets
China’s financial markets seem to be signaling trouble, as a government crackdown on corruption and loose credit begins to bite and jittery local investors scramble for safety. China remains an opaque country, and even the most knowledgeable experts say they aren’t sure how to read the tea leaves. But the warning signs are growing that, after decades of economic expansion and exploding wealth, China is moving toward the scary side of the perpetual seesaw between greed and fear that drives financial markets
.The Chinese government has an amazingly good record of managing macroeconomic policy. But as economist Herbert Stein said many years ago, in connection with U.S.
trade deficits, “If something cannot go on forever, it will stop.” The China question is how sudden and hard the stop will be.
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5. WSJ: China prepares way for new low in growth
Amid more signs of weakening, premier leaves wiggle room to miss 7.5% target.
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6. WSJ: Weak Chinese trade data cloud growth hopes
Distortions from 'Ooverinvoicing' make data look extra bleak.
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7. FT: China rules out short-term stimulus despite weak trade figures
China will not resort to short-term stimulus measures in the face of temporary fluctuations in growth, Premier Li Keqiang pledged on Thursday, as monthly trade figures showed fresh signs of stress in the world’s second-largest economy. Chinese imports and exports in March both contracted compared with a year earlier, adding to concerns about the slowdown in an economy that has been the biggest contributor to global growth since the 2008 financial crisis. In a speech to a forum on the tropical Chinese island of Hainan, Mr Li acknowledged some of the challenges facing the
economy but insisted his government was capable of propping up growth while implementing difficult reforms to put it on a more sustainable base. “The upturn of the Chinese economy is not yet on a solid footing. Downward pressure still exists and difficulties in some fields must not be underestimated,” Mr Li said. But “there are conditions in place for the Chinese economy to achieve sustained, sound growth”, he added. “We have the capabilities and confidence to keep the economy functioning within the proper range.”
FT photo.
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8. Reuters: China should be very cautious with any stimulus-central bank
The Chinese government and central bank should be "very cautious" in implementing any stimulus programs because they tend to be less efficient than natural market forces in boosting growth, a People's Bank of China official said on Thursday.
Yi Gang, a vice governor of the bank, also told a conference in Washington, ahead of the spring meetings of the International Monetary Fund and World Bank, that Chinese economic growth of "a little bit more, a little bit less" than 7.5 percent was acceptable. Last year, China's economy expanded by 7.7 percent. "Any kind of stimulus package should be very cautious in the sense that you should believe that the market driver is the natural and the most efficient way to grow, and a stimulus growth driver is not as efficient as the natural market driver," Yi said.
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9. Reuters: China says to ease restrictions on overseas investments
China will ease restrictions on overseas investments by local firms and deals below $1 billion (596 million pounds) will no longer need approval, the country's economic planner said in another step to cut red-tape and facilitate the growth of private investment. Starting from May 8, Chinese firms planning to invest less than $1 billion will only need to register with
authorities rather than seek approvals from the National Development and Reform Commission (NDRC), the commission said in a statement late on Thursday. In a series of sweeping reforms published in November, China promised to free up the market by simplifying administrative controls and to restrict central government management of
microeconomic issues.
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10. WSJ: Chinese Premier Li warns Southeast Asia nations against 'provocations'
Remarks follow
Philippines legal challenge to its claims in South China Sea.
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11. FT: Ukrainian lessons can help the US in Asia
Defence secretary draws parallels between Russia and China.
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12. WP: Washington is making it easier for businesses to swap notes on hackers
Rival businesses that share information with each other about hackers who've broken into their computer systems won't be running afoul of antitrust laws, the U.S.
government has confirmed. The new policy, issued jointly Thursday by the Justice Department and the Federal Trade Commission, is aimed at tamping down the perception of legal risk associated with bolstering corporate IT defenses as concerns about
cybersecurity are at an all-time high. "Legitimate cyber
threat sharing can help secure the nation's networks and can occur without raising antitrust liability issues," said deputy attorney general James Cole."The recent Target breach is another reminder of how far-reaching the cyber threat has become."
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13. FT: Report links Chinese military to cyber hacking
The Chinese military
is accused of continuing to hack western
companies despite denying the accusations last year after a report pointed the finger at a unit of the People’s Liberation Army in Shanghai.
Mandiant, the US cyber security company that accused China of a sustained hacking campaign against more than 140 companies, claims in a new report that attacks have continued even after the White House called on China to stop the extensive hacking. The company said cyber criminal activity had temporarily dropped after its report in February last year,
which along with claims that the New York Times was hacked by Chinese attackers, contributed to political tensions between Washington and Beijing. But it said by the end of the summer the cyber criminals had simply changed their IP addresses, which help locate them, and
were back to hacking at the same rate. It took 160 days to return to “consistent intrusion activity”, the report said. Laura Galante,
analyst at Mandiant, said the hackers appeared to still be trying to gain access to the same intellectual property and research and development targets.
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14. NYT: During Hagel visit, China showed its military might, and its frustrations
When Robert M. Gates visited China in 2011 as the United States defense secretary, the military greeted him with an unexpected and, in the view of American military officials, provocative test of a Chinese stealth fighter jet, a bold show of force that stunned the visiting Americans and may even have surprised the Chinese president at the time, Hu Jintao. When Defense Secretary Chuck Hagel visited China this week, the military greeted him with a long-sought tour of the country’s lone aircraft carrier, the Liaoning, in what many American officials interpreted as a resolve to project naval power, particularly in light of recent tension between Beijing and its neighbors over disputed islands in the East and South China Seas. The displays of China’s military power reveal some dividends
from years of heavy investments, and perhaps a sense that China is now more willing to stand toe-to-toe with the Americans, at least on regional security issues.
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15. Reuters: China's U.S. ambassador plays down tensions after Hagel trip
China's ambassador to the United States on Thursday played down the tense exchange this week in Beijing between Defense Secretary Chuck Hagel and his Chinese counterpart and praised the frank talk between the two countries. Ambassador Cui Tiankai spoke after Hagel's meeting on Tuesday with Defense Minister Chang Wanquan, who called on the United States to restrain Japan and chided another U.S.
ally, the Philippines. "He had a very substantive and direct exchange with his Chinese counterpart," Cui said. "I think maybe this is not a bad thing. Maybe this is a good thing." The Chinese ambassador stressed the importance of military-to-military contacts. "There will be more exchanges," he said in remarks at the nonprofit U.S. Institute of Peace.
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16. Xinhua: Full text of Li Keqiang's speech at opening ceremony of Boao Forum
Chinese Premier Li Keqiang delivers a keynote speech at the opening of the Boao Forum for Asia (BFA) Annual Conference 2014 in Boao, south China's Hainan Province, April 10, 2014.
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17. Xinhua - Insight: Foreign firms' love-hate bond with China
Foreign companies have mixed feelings
on China. The world's second-largest economy offers them an enticing market, yet there remain tricky barriers to entry, bosses of global heavyweights said at an international forum on Thursday. China has become very attractive for international firms seeking to tap the growing consumer market, but its complicated business and investment approval procedures have bothered many foreign entrants, said attendants at the ongoing Boao Forum for Asia (BFA) 2014 Annual Conference.
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18. Xinhua: Premier Li pledges equal treatment to foreign companies
Chinese Premier Li Keqiang on Thursday pledged to give equal treatment to foreign companies in China, and create an operation environment with fair competition. China is committed to comprehensive reform and further opening-up. China will give all foreign companies registered here equal treatment, no matter it is wholly foreign-owned or a joint venture, said Li in a meeting with well-known entrepreneurs from home and abroad, on the sidelines of the annual conference of the Boao Forum for Asia (BFA). Noting the low per capita hold of resources and energies as the "biggest bottleneck" for China's modernization, he said China will promote the development of industries of clean energy, low-carbon and environmental protection, and welcomed foreign corporations to cooperate and share technologies with Chinese partners on the basis of willingness.
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19. SCMP: Yuan decades away from being global reserve currency
Despite the significant progress Beijing has made in broadening
global use of the yuan, observers
say the mainland currency has more often been
chased by speculators than serving as a US dollar-type “safe haven”. China has made clear its ambition to boost the yuan’s global status to match the growing power of the world’s second-largest economy, although People’s Bank of China governor Zhou Xiaochuan acknowledged last month that Beijing still had “lots of homework” to do in that area. Many domestic and foreign economists say the steps rolled out to promote
international use of the yuan have been remarkable, but they also
say the mainland needs to deepen its financial reforms to build a deep and liquid enough market and make its monetary decision-making more transparent and independent, among other steps to further
liberalise the market, before the yuan can become a global reserve currency. They estimate that process could take several decades.
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20. SCMP: Beijing rules out strong stimulus despite trade decline
Beijing maintains emphasis on structural reforms and
urbanisation to drive growth after a decline in exports and imports for March.
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21. NYT - DealBook: In I.P.O., a quest to satisfy China’s appetite for pork
There is a
commodity creating ravenous demand among China’s growing consumer class, one whose pricing is so important that it influences the Chinese central bank’s monetary policy. The commerce ministry even maintains strategic reserves and has been piling them higher in recent weeks in an attempt to stabilize prices. Pork prices, that is. Fresh, chilled and frozen; salted, smoked and brined; chops, bellies, rumps, feet — nobody consumes pigs like the Chinese. The country accounts for about half of the 109 million tons of pork that will be produced and eaten globally this year, according to the United States Department of Agriculture.
A customer chooses a slaughtered pig at a pork wholesale market in Hefei, China. Reuters photo.
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22. Reuters: Beijing eyes smog controls ahead of APEC meeting
China may revive 2008 Beijing Olympics-style air pollution controls when it holds a meeting of Asia-Pacific leaders in the often smog-shrouded capital in November, state media said on Thursday. Officials are mulling traffic curbs based on license plate numbers to cut emissions and the closure of plants and construction sites during the Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting, which draws many heads of state from the group's 21 member economies. The plan is reminiscent of emergency measures implemented with mixed results to tame Beijing's chronic pollution when the city was on the world stage ahead of the 2008 Summer Olympics. During the APEC meeting, officials would work with the local governments in the nearby city of Tianjin and surrounding Hebei province to combat smog, Zhuang Zhidong, deputy head of the Beijing Environmental Protection Bureau, was cited by the English-language China Daily newspaper as saying.
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