PIIE Blog | China Economic Watch
The Peterson Institute for International Economics is a private, nonprofit, nonpartisan
research institution devoted to the study of international economic policy. More › ›
Subscribe to China Economic Watch Search
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’ Reserves: Parsing the Recent Data and Rhetoric

by | April 17th, 2014 | 03:29 pm

As China’s policy regarding continued intervention in its currency market increasingly appears to be reaching an inflection point, we have been closely following the data over the past months in order to ascertain whether there has been a change in this policy. The initial conclusions from the first few months of this year were that […]

Read full post

Flying Blind: Monitoring Shadow Banking in Emerging Markets

by | April 4th, 2014 | 02:35 pm

In the wake of the global financial crisis, financial regulators worldwide have struggled to adequately address the risks inherent in shadow banking. In the advanced economies, post-crisis regulatory efforts have tamed some of the previous excesses and slowed the growth of shadow banking. Despite these efforts, the shadow banking systems in Europe and the United […]

Read full post

Internet Finance: Barbarians in the House

by | April 1st, 2014 | 03:06 pm

Yuebao is now the hottest online “piggy bank” in China. It is essentially an online money market fund at Alibaba managed by Tianhong Asset Management Corporation that offers daily settlement of interest returns up to 6.76% annualized rates, 27 times higher than that at the transaction account in banks. The fund’s rising yield since last […]

Read full post

Reforms, Fast and Slow: The Near-term Outlook for Reforms to China’s Exchange Rate Policy

by | March 24th, 2014 | 01:17 pm

THERE is the sweet scent of reform in the air these days in Beijing, but not all reforms are equally sweet for China’s leadership. Many analysts are optimistic about the prospects for reform following Premier Li Keqiang’s speech to the National People’s Congress on March 5th, and also with the recent announcement that by the […]

Read full post

Don’t Get Fooled by China’s Tricky FDI Numbers, It is Still Number One

by | March 13th, 2014 | 04:04 pm

Growth in foreign direct investment in the five leading ASEAN economies (Singapore, Indonesia, Thailand, Malaysia, Philippines) led to speculation these countries have now displaced China as the leading destination for multinationals. However, closer examination shows China likely remains the world leader. China publishes two series on foreign direct investment. The first, produced by the Ministry […]

Read full post

Injecting a Little Risk into the Chinese Financial System

by | March 11th, 2014 | 04:54 pm

Moral hazard is a large and ongoing problem in the Chinese financial system. The past few years are full of examples of investors seeking government intervention on their behalf when a financial product goes bad. We have seen this type of behavior for bonds, trust products, wealth management products, real estate investments, and even individual […]

Read full post

Finally! Good High Frequency Data on China’s Purchase of Treasuries

by | March 11th, 2014 | 02:52 pm

On February 28th, the US Treasury released the preliminary data for the annual TIC survey. While this data is subject to minor revision when the final data is released in April, this data provides a more detailed and accurate depiction of foreign ownership of US assets than the monthly surveys – or so it is commonly believed. […]

Read full post

From “We Should” to “We Will”: A More Disciplined Approach to Reform in China

by | March 6th, 2014 | 02:47 pm

Every March, the Chinese Premier delivers a government work report to the National People’s Congress which includes a section outlining the State Council’s agenda for the following year. If political rhetoric is worth anything in China, the first work agenda delivered by Premier Li Keqiang is cause for optimism in 2014. Based on the language of […]

Read full post

The Renminbi will Remain Stable Despite Recent Fluctuations

by | March 4th, 2014 | 10:13 am

The  renminbi depreciated significantly in February. It fell a further 0.41% on February 28 following a 0.92% drop since February 17, making this the largest daily and monthly loss since the exchange rate reform in 2005. The renminbi depreciation was triggered by sell-offs caused by recent concerns on China’s gloomy macro data, US QE tapering, […]

Read full post

China Has Property Taxes, Just Not The Right Ones

by | February 26th, 2014 | 10:12 am

Property taxes are considered a silver bullet for improving local government finances and cooling down China’s property market. This is only partially true. China does not need more property taxes it mostly needs to change the nature of existing property taxes. The task is difficult but could have some momentum in 2014. Property tax revenues […]

Read full post