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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

Is China Unwinding its Foreign Exchange Reserves? Not Just Yet

by | October 20th, 2014 | 12:22 pm

Last week, the PBoC released data on its third quarter foreign exchange reserve accumulation. The headline data showed a decline of $105 billion, the first decline in headline reserves since the second quarter of 2012. This has led many to question whether China is experiencing a large capital outflow, or whether China is starting to […]

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China Chart of the Week: Fishing in the South China Sea

by | October 17th, 2014 | 03:06 pm

While the most recent clashes between China and its Southeast Asian neighbors in the South China Sea have been over oil rigs and alleged construction of artificial islands among the Spratley island chain, an additional aspect of this ongoing territorial dispute has been fishing rights.  Already considered overfished by the UN Food and Agriculture Organization […]

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Is China’s Rebalancing for “Real”?

by | October 14th, 2014 | 04:34 pm

For the past three years the rapid growth of China’s service sector has been one of the most positive indicators that internal rebalancing – while slow – is moving in a positive direction. In nominal terms the tertiary industry (i.e. services) exceeded secondary industry (i.e. industry and construction) for the first time last year reaching […]

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China Chart of the Week: Headwinds to Further Residential Investment

by | October 10th, 2014 | 05:17 pm

Earlier this week the Governor of the Australian central bank, Glenn Stevens, remarked in the opening of his monetary policy statement that the slowing property market in China would present a “near-term challenge”. This sentiment is being shared across many economies dependent on China’s heretofore healthy appetite for commodity imports. Embedded in that statement was […]

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China’s New GDP Measurement: Impact on Growth, Income, and Productivity

by | October 7th, 2014 | 02:59 pm

In an interview in November of 2013, the Vice Director of China’s National Bureau of Statistics, Xu Xianchun, announced that China would soon be converting their method of national accounting to the 2008 SNA standard, from the old SNA 1993 standards. The new standards (which have largely already been implemented in US, Australia, Korea, Nigeria […]

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China Chart of the Week: Services Imports Reach New Highs

by | October 3rd, 2014 | 11:27 am

This week China’s State Administration of Foreign Exchange (SAFE) released the final balance of payment data for the second quarter of 2014. It is worth noting that China’s trade deficit in services of -$30 billion in the second quarter – when added to the -$33 billion deficit in the first quarter – means China’s trade […]

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Part One of Private Finance in China: Private Banking

by | October 1st, 2014 | 05:20 pm

As Nicholas Lardy discussed in Markets Over Mao demonopolization among other reforms can help drive productivity growth in China’s service sector. Banking in China has long been monopolized by the state. However, this is beginning to change. In July 2013, the State Council called for allowing private capital to enter the banking sector. Fast forward just […]

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China Chart of the Week: Foreign Investors Flock to Services

by | September 26th, 2014 | 02:11 pm

Last week, China’s Ministry of Commerce (MOFCOM) reported that foreign direct investment inflows slowed to $78 billion in the first eight months of this year compared with $80 billion in the same period last year as inflows in August fell to their lowest level in four years. The decline has created the perception that foreign […]

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China Chart of the Week: Services Lead Growth as Industry Slows

by | September 19th, 2014 | 03:04 pm

Earlier this week China’s National Bureau of Statistics released monthly economic data for August, and at first blush it looked pretty scary. Year-over-year growth in value added industrial output slowed to 6.9 percent in August, the slowest pace since 2008. Now accumulated value added industrial output growth for the first eight months has only grown […]

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Taking Stock of the Shanghai FTZ after One Year

by | September 15th, 2014 | 02:31 pm

The Shanghai Free Trade Zone is fast approaching its one-year anniversary. Much of the recent commentary about the FTZ has been negative. It is obvious that the FTZ has not lived up to the extraordinarily high expectations many had when it was first announced.  However, as is typical with the Chinese pattern of reform, things […]

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