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China Economic Watch

This blog monitors ongoing developments in China's economy, analyzes the impact of policy changes, and informs readers about new PIIE research on China.

Recent Posts

China Chart of the Week

by | August 21st, 2014 | 03:22 pm

It has been exactly a century since the small country of Belgium was the subject of a furious international debate. Now, for those who watch international capital flows closely, one recent development that has sparked a much more pedestrian debate has been the remarkable increase in the size of Belgium’s US Treasury holdings over the past 18 […]

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China Chart of the Week

by | August 13th, 2014 | 12:05 pm

New figures from the National Bureau of Statistics revealed that fixed asset investment in China continued to decline, reaching the lowest level since December 2001. In particular, investment in the industrial sector and real estate development have fallen dramatically. China’s recent efforts at targeted stimulus may be responsible for averting an even more rapid decline. […]

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China Price Reform Update – 1H2014

by | August 6th, 2014 | 09:27 pm

Last November the Chinese Communist Party made an unprecedented step forward in market reforms when it made a commitment to allow the market to play a decisive role in resource allocation (使市场在资源配置中起决定性作用) by the end of 2020. In China the market determines all prices with a few important exceptions. For example, the price of petroleum, […]

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A Day of Reckoning for China’s Trusts

by | August 4th, 2014 | 09:41 am

The third and fourth quarter of 2014 will be a turning point in the trust industry, as repayments of interest and principal of trust products are expected to peak during these two quarters and remain high for 2015 as a whole. The combination of mounting payoffs and non-performing loans are likely to rattle the whole […]

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China Rebalancing Update – Q2 2014

by | July 31st, 2014 | 02:42 pm

With all the relevant economic data out, we can now update our rebalancing indicators for the second quarter of 2014: 1. Urban Disposable Income Growing Faster than GDP The gap between GDP growth and urban disposable income growth expanded in the second quarter of 2014. The gap increased to -0.4 percent versus -0.2 percent in […]

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US Tech Firms Face Chinese Hurdles

by | July 29th, 2014 | 01:11 pm

Edward Snowden’s revelations, along with cyber-espionage cases and China’s IT protectionist tendencies have combined to create a storm for US tech firms.  Chinese investigations and sanctions directed at foreign IT firms started more than a year ago and have grown more frequent in recent months. Following the US government’s indictmentsof five PLA officers for cybercrimes […]

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Let the Good Times Roll: China’s Growing Influence in South Korea

by , Kent Troutman | July 25th, 2014 | 05:06 pm

Xi Jinping’s recent visit to Seoul was remarkable for a number of reasons. It was the first in which a Chinese president visited the South before the North, no doubt a thread which the Kim regime took note. It also highlighted both leaders’ distaste and distrust for neighboring Japan. But, perhaps most importantly, it reinforced […]

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The Economics of H2O: Water Price Reforms in China

by | July 22nd, 2014 | 11:47 am

In China – as with most countries – the price of water is controlled by the state not the market. The problem with state-control of water prices is that prices are often slow to adjust to supply and demand. Low water prices encourage waste and subsidize water-intensive households and corporations. In a country with abundant […]

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Reforming China’s Capital Markets

by | July 21st, 2014 | 09:47 am

Over the past decade, China’s bank-dominated financial system has rapidly been transformed into a more diverse system where nonbank financial institutions and capital markets play a large role. Trust loans, entrusted loans, bankers’ acceptances, corporate bonds and equity issuances now account for a large portion of financing to the real economy, a stark contrast with […]

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Taking Stock of the Strategic and Economic Dialogue

by | July 14th, 2014 | 05:01 pm

Last week’s high-level bilateral meeting between the United States and China came during a time of increasingly tense relations between the two great powers. A mix of competition and cooperation has always characterized the relationship, but the balance of these two elements has shifted in recent months. Territorial disputes with American allies and an ongoing […]

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