In its fight against an economic slowdown, China has opened the bank vaults again and pumped more credit into its financial systems, again, says political analyst Victor Shih, author of Factions and Finance in China: Elite Conflict and Inflation to the New York Times. It is an old solution in a country where debts are already at dangerous levels, he says.
Category Archives: government
Yujiapu, Tianjin’s financial district, is building China’s Manhattan, with loans since most inhabitants still have to arrive. That goes well, says financial analyst Victor Shih, as long as the project has the political goodwill in Beijing to subscribe giants loans, he tells in the New York Times.
After a lengthy crackdown on shadow banking, this risky financial tool seems to be back in grace as China’s economy is slowing down. It is the pragmatic way China’s financial authorities deal with the economy, financial analyst Sara Hsu says. Shadow banking will be allowed, as long as it works, she writes in China Focus.
US President Donald Trump describes the upcoming deal between China and the US to end the trade war as “comprehensive”. China veteran Mark Schaub sees only marginal changes and certainly disagrees with a report in Bloomberg saying that most foreign companies can now work without joint ventures. Most companies can and do so since the 1980s, he tells at the BBC. And he assumes that in industries where foreign investments are tough, like publishing, telecom, and education, changes will not be sensational, he tells at the BBC.
The official trade war between the US and China seems to be entering its end game. But that does not mean the hostilities will end. Making sense out of what the world’s first and second-largest economies will do will only be slightly easier. A few speakers at our office might be able to help you out.
China is trying to pacify Islam by force, but is achieving the opposite of the stability it wants to secure, says Ian Johnson, author of The Souls of China, to Foreign Policy. “By using more force to increase stability, the government is achieving the opposite effect.”
China is overhauling its now 30-years old regulations for cosmetics, a fast-growing industry of now 260 billion Renminbi (euro 34 billion). The new rules remove some of the red tape, says lawyer Mark Schaub, but also gives the authorities more leverage over the industry, he writes at the China Law Insight.
The reform of the income tax in China will drive many expats out of the country as it will kick in by 2021, as foreign and local taxpayers will fall under the same taxation rules, says financial expert Paul Gillis on his weblog. Especially the equal treatment for housing and education costs will become too costly for expats, or their companies.
Some analysts see in the new Foreign Investment Law a way for China to placate the US, but China veteran Mark Schaub sees here no quick fix triggered off by the trade war. It is the first new foreign investment law since the Berlin Wall came down, he says to the BBC News Service.
China brought the newly adopted foreign investment law with some fanfare, but political analyst Victor Shih does not expect the law will be a game changer, as some hope, he tells at the Deutsche Welle. A level playing field for foreign and domestic companies in China might be far away.