Month: September 2015

Investors monitor a display showing the Shanghai Composite Index at a brokerage in Beijing last month. (Ng Han Guan/Associated Press) The questions that now face China are whether it can maintain its internal stability and contribute to the vitality of the wider global economy. Like many economic juggernauts before it — Japan springs to mind — China seemed unstoppable. Its economy hummed along at the almost unimaginable annual growth rate of about 10 percent. No obstacle seemed beyond its power to surmount. After the 2008-2009 financial crisis, it adopted a huge stimulus package equal to about 13 percent of its gross domestic product. Growth resumed, and China’s leaders were widely praised. It now turns out that the Chinese — like the Japanese — are not infallible. Indeed, after allowing for differences in historical circumstances, China and Japan seem to have committed similar mistakes. Japan had relied on exports and […]

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BEIJING—China’s foreign-exchange reserves fell by a record $93.9 billion in August, a result of aggressive intervention in the currency market by the country’s central bank to prevent the yuan from free-falling and limit money leaving Chinese shores . The People’s Bank of China on Monday reported $3.56 trillion in its foreign-exchange holdings as of the end of last month, compared with $3.65 trillion as of July. China’s currency reserves, still the world’s largest, have been falling from a peak of $3.99 trillion in June 2014 as gathering fears of a deepening slowdown in the world’s No. 2 economy have led more businesses and investors to take money out of the country. Based on central-bank data, it was the largest single monthly drop in reserves in absolute terms, and the biggest fall in more than three years on a percentage basis. “Capital outflow is a big concern,” said an official […]

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BEIJING—China revised its 2014 growth rate to 7.3% from 7.4% due to a weaker-than-reported contribution from the service sector, casting doubt on an economic bright spot amid concerns about the health of the world’s second-largest economy. The change is relatively small but suggests that China’s effort to meet its official growth target of about 7.5% last year was tougher than it seemed. It comes as worries grow that China will struggle to reach this year’s goal of about 7%. “That’s the beauty of using ‘about’ in your targets,” said IHS Global Insight economist Brian Jackson. “It’s undefined. No one knows if you reach it. Even they may not know. It gives them flexibility to revise it later.” The country’s gross domestic product last year totaled 63.614 trillion yuan, or about $10 trillion, China’s statistics bureau said Monday. That was down 32.4 billion yuan from its initial estimate in January […]

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An investor stands in front of an electronic board showing stock information at a brokerage house in Shanghai, China, September 2, 2015. China’s policymakers and regulators tried to soothe the country’s jittery markets on Monday, promising deeper financial market reforms and stressing the economy was showing signs of stabilizing, as stocks resumed trading after a four-day long weekend. Looking to draw a line under wild gyrations in Chinese equity markets, which have fallen 40 percent since mid-June, China’s securities regulator said it would take more steps to ensure stable markets, while government officials said the worst of the volatility was over. "The government won’t normally intervene, but when there are severe, abnormal fluctuations in the markets, the government can’t just sit on the sidelines and must take decisive and timely measures," the China Securities Regulatory Commission said late on Sunday. It added it would consider launching a circuit breaker […]

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An employee looks on next to an assembly production line of Buick cars at a General Motors factory in Wuhan, Hubei province January 28, 2015. REUTERS/Stringer General Motors Co ( GM.N ) reported on Monday its biggest drop in China sales in five months for August as global automakers struggle with a deepening economic slowdown and slumping equities in the world’s largest auto market. Vehicle sales for GM and its joint venture partners fell 4.8 percent year-on-year in August, while Ford Motor Co ( F.N ) and Nissan Motor Co Ltd ( 7201.T ) also reported contracting sales for the month, highlighting the divide between winners and losers in the Chinese market. The figures contrast sharply with last week’s major sales gains for Toyota Motor Corp ( 7203.T ), Honda Motor Co Ltd ( 7267.T ) and Mercedes maker Daimler AG DIAGn.DE in China, demonstrating the importance of having […]

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Tingbin Zhang writes: China’s islanding building on the four-mile-long and two-mile-wide Subi Reef in the South China Sea has put The US in a tight spot. To protect its ally from China’s aggression, The US will be left with little choice but to constrain China by military means. However, the US won’t directly engage China in the war in the foreseeable future, because the US dominates China with its superior naval and air force and the only way for China to level the playing field is to apply nuclear weapons. The nuclear nature of Sino-American warfare will make both the world no.1 and no.2 economy the fallen giants. So There is a possibility that The US might use its oil weapon instead to strike at the core of China’s weakness–it’s huge dependence on oil import. At the moment, China imports 55% of its oil, almost half of which sails […]

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