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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

Renminbi Inclusion in SDR—More about Financial Reform

by and Nicholas R. Lardy | November 24th, 2015 | 04:20 pm

The International Monetary Fund (IMF) will decide soon whether or not to add the renminbi to its Special Drawing Rights (SDR) basket. The Fund’s review of this issue last summer focused on two issues. The first, referred to as the gateway criterion, was a simple matter. China met this criterion as early as 2010 by […]

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Christine Lagarde and the SDR Basket

by | November 17th, 2015 | 10:47 am

International Monetary Fund (IMF) managing director Christine Lagarde has thrown her personal support behind China’s long-time campaign for the inclusion of its currency, the yuan or renminbi, among the small basket of currencies that are used to value the IMF’s special drawing rights (SDR).[1]   On November 13, the IMF issued a statement in which Lagarde […]

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Chart of the Week: Industries’ Contribution to Emissions in China

by | November 13th, 2015 | 04:05 pm

Most cell phones and computers (70 and 90 percent of the world total in 2011, respectively) are produced in China. But does China’s emphasis on manufacturing mean that factories, “the production side of the economy,” contribute more to pollution than other sources of emissions? Industrial production and construction account for 31% of China’s 8.2 gigatonnes […]

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China and the IMF: The IMF Blinks

by and Edwin M. Truman | November 5th, 2015 | 04:24 pm

After a decade of export-led growth producing global imbalances and the hoarding of foreign exchange reserves, China now aspires to a position of responsibility and respect for the renminbi.  Symbolic of those aspirations is China’s campaign to include the renminbi among the currencies of the basket that is used to value special drawing rights (SDR) […]

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Corporate Debt in China: Above Cruising Altitude

by | November 3rd, 2015 | 12:40 pm

By far the most worrying debt in China is held by the corporate sector.  Total borrowing by the nonfinancial sector shows that the total debt-to-GDP ratio has reached 240 percent of GDP as of the first quarter of 2015.  The corporate debt-to-GDP ratio was 160 percent of GDP, or $16.7 trillion as of the first […]

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Should US Tech Companies Share Their “Source Code” with China?

by | October 28th, 2015 | 09:41 am

(This has been cross-posted from the PIIE RealTime Economic Issues blog.) IBM and Microsoft have agreed to let the Chinese government review some of their proprietary source code in a secure setting, provoking criticism from the Obama administration and some technology companies that doing so will reopen the door to the Chinese campaign to force […]

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China’s Third Quarter Growth: Transition on a Steady Pace

by | October 19th, 2015 | 04:42 pm

China’s third quarter GDP growth of 6.9 percent is the slowest since the height of the global financial crisis.  It is not, however, the harbinger of a coming economic meltdown.  Rather, the third quarter continues trends evident since the beginning of 2010.  First, a massive deceleration in investment in housing has led to a marked […]

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PIIE Chart: Moving Away from Banks: China and the EU

by | October 14th, 2015 | 03:40 pm

The funding structure of the corporate sector varies significantly across jurisdictions.  This chart suggests China and Europe are more mutually comparable in terms of financial system structure than with the United States. Indeed, both China and Europe aim to reduce the dominant role of banks in their respective systems – an effort labelled “capital markets union” in the […]

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PIIE Chart: Who will hold the power in AIIB?

by | October 1st, 2015 | 03:20 pm

China holds 30 percent of the shares in the Asian Infrastructure and Investment Bank (AIIB), which translates to about 26.1 percent of the votes.  According to the Articles of Agreement published by the Chinese Ministry of Finance, 16 European countries will join China’s new addition to the global financial system, meaning just over one-quarter of […]

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PIIE Chart: Is the Size of China’s Government Growing?

by | September 30th, 2015 | 03:01 pm

The size of government in China, when measured by general government revenue, is actually smaller than in the United States. However, the supporters of smaller government in China have been in retreat since China’s last large fiscal reform implemented by Premier Zhu Rongji in 1993-94, which has seen the size of China’s general government rise […]

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