Tag: Banking and Financial Institutions

What Retail Sales and Other Data Say About China’s Economy

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China’s trains, planes, stores and beaches were a little fuller last month than a year ago, and the pace of activity picked up at factories, particularly those making mobile phones and semiconductors. A batch of numbers released on Friday by China’s National Bureau of Statistics showed a modest improvement in the country’s overall retail sales and industrial production during August. A series of small steps taken by the government over the summer, including two rounds of interest rate cuts, seems to be yielding a slightly better-than-expected improvement in the country’s…

People’s Bank of China Cuts Reserve Requirement to Spur Bank Lending

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China’s central bank announced a policy change on Thursday that will allow the country’s banks to lend more money, but a nationwide economic slowdown has left many companies and households wary of borrowing. The move is the latest in a series of economic stimulus measures by the Chinese government as growth has failed to rebound strongly this year as many expected after nearly three years of stringent pandemic-control regulations. Other measures taken to strengthen borrowing and spending have included government-guided interest rate cuts in June and a round of rate…

China’s Property Crisis: Why It’s So Hard for Beijing to Fix

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China’s stock market was plunging and its currency was teetering. The head of the central bank, fielding questions at a rare news conference, said that China would make it easier to get home mortgages. It was February 2016 and Zhou Xiaochuan, the central bank’s longtime governor at the time, announced what proved to be the start of an extraordinary blitz of lending by China’s immense banking system. Minimum down payments for buying apartments were reduced, triggering a surge in construction. Vast sums were also lent to local governments, allowing them…

China Central Bank Cuts Key Interest Rate on Bank Lending

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China’s central bank on Monday cut the main benchmark interest rate that the country’s commercial banks use in issuing one-year bank loans, the latest in a series of steps by the government to address falling apartment prices, weak consumer spending and broad debt troubles. But the reduction, the second time in two months that the government has pushed down commercial banks’ lending rates, was smaller than expected. The modest cut was the latest sign that the government’s usual tools for addressing an economic slowdown may have lost some of their…

China Faces a Crisis in Its Real Estate Sector

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A model Chinese property developer in a sector replete with risk takers is teetering on the edge of default. Short of cash, one of China’s biggest asset managers has missed payments to investors. And billions of dollars have flowed out of the country’s stock markets. In China, August has been a dizzying ride. What started three years ago as a crackdown on risky business behavior by home builders, and then an ensuing housing slowdown, has spiraled rapidly this month. The broader economy has been threatened, and the confidence of consumers,…

China and Hong Kong Stocks Slump as Economic Gloom Spreads

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About three weeks ago, at a meeting chaired by Xi Jinping, China’s leader, officials acknowledged that China’s economy was facing “new difficulties and challenges.” According to the official Xinhua News Agency’s summary of the Politburo meeting, officials promised to juice the economy, which had started to rebound at the start of the year after Covid restrictions were lifted but had been struggling. The economic troubles, they said, arose from flagging domestic demand and a “grim and complex” global economy, among other factors. Chinese stocks jumped at the time, even though…

Pan Gongsheng Named Head of Chinese Central Bank

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For nearly eight years Pan Gongsheng has overseen one of the world’s biggest pots of money: China’s $3 trillion in foreign currency reserves. Now he will run the country’s central bank, playing an even more powerful role in the Chinese economy. Mr. Pan, a prominent economist, was named on Tuesday as governor of the central bank, the People’s Bank of China. He had already been installed as the bank’s Communist Party secretary on July 1. It will be the first time in five years that one person will hold both…

China Hits Ant Group with $985 Million Fine

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Chinese authorities announced a fine of nearly $1 billion for financial technology firm Ant Group on Friday, nearly three years after regulators halted the company’s plan for a record-breaking public offering that ushered in a period of intense government scrutiny of technology firms. The fine announced by China’s top securities regulator is seen as a sign that the authorities are wrapping up investigations into technology firms, bringing to a close a period of tough regulation for the industry. Officials said earlier this year that they would start to relax oversight…

China’s Central Bank Cuts Loan Prime Rates

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China’s central bank cut key interest rates on Tuesday for loans issued by the state-controlled banking system, in the clearest sign yet of mounting concern in the Chinese government and corporate sector that the country’s economy is stalling. The interest rate cut was small — a tenth of a percentage point for the country’s benchmark one-year and five-year interest rates for loans. But because almost all of the country’s corporate lending and mortgages are linked to the two rates, the reductions could have some effect on the overall pace of…

China’s Biggest Banks Cut Deposit Rates to Spur Consumer Spending

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Why It Matters A reduction in the deposit rates is one lever that policymakers can use to stimulate spending. The hope is that the lower rates will give consumers an incentive to spend or invest money instead of parking their savings in the bank. The move is an indication that consumer spending, a key driver of economic growth, remains sluggish. After China scrapped its Covid restrictions late last year and reopened the economy, there were expectations that pent-up demand would push consumers to start spending freely — but that has…