China's Modern Economy 中国现代经济 meets TuTh 11:45-1:15 Huntley 230
Fall 2013 Class
This article talks about how some Chinese cities have attempted to decrease the risk of a housing bubble. Raising the second home down payment by 60-70% makes sure that investors in new houses can afford the house outright and if credit did become a problem less of an impact would occur. Even new first time… Continue reading Stopping the Bubble from Popping
“Shadow banking” in China is up 15.7% on-year in the first three quarters of 2013. “Shadow banks” perform similar functions to banks, but aren’t subject to the same oversight. In June, right before the first-half reporting period, the People’s Bank of China raised interest rates, startling those lenders who may have been a bit overextended.… Continue reading The Need for Liquidity
With the recent leadership change in China, foreign developers are rushing to invest in commercial real-estate in China. Historically, private equity firms had been the ones to invest in the options such as shopping malls and warehouses. So far in 2013 foreign developers have raised $3.5 billion, surpassing the $2.2 billion raised in all of… Continue reading Foreign Developers Look to Commercial Real-Estate
China’s cost of borrowing has increased substantially over the past year. With many local governments using debt to pay for large projects and listed companies, excluding financial firms, debt has doubled since 2009. The People’s Bank of China promised to lessen debt leveraging by increasing borrowing costs. Currently in the US, interest rates are being held low… Continue reading Credit Crunch May Cut Off More Than China Can Chew
On October 1, 2013, the Chinese government attempted to implement a new set of regulations to curb corruption in domestic travel and ease the burden on tourists in China. The combination of rising incomes, a less restrictive passport regime, and softer spending limits has caused the number of Chinese traveling at leisure to grow tremendously… Continue reading New Regulations Implemented to Improve Chinese Tourist Behaviour
After the much-anticipated publication of China’s “Third Plenum” a few weeks ago, the document proved to be bolder than anticipated in the economic world. Xi Jinping is attempting to push through the changes that have stalled over the past 10 years or so. The document states, “We should let labor, knowledge, technology, management and capital… Continue reading Two Buried Proposals in Party Document Could Help Change Chinese Government
In the most recent forecasts from the OECD, China fared the best among emerging-market economies. This is in part due to China’s policy adjustments that confront a changing global outlook. GDP in China is predicted to rise 7.7% this year and 8.2% in 2014. Small fiscal stimulus should revive domestic demand. The report reads, “Growth… Continue reading OECD Gives China Top Rating Among Emerging Economies
China has many border disputes. However, Beijing’s recent decision to place an “Air Defense Zone” through part of the East China Sea which Japan and China both claim has been quite serious and a major source of conflict in the region. This zone covers the Senkaku/Daiyou islands, claimed by both nations and Taiwan, and the… Continue reading Air Defense Zone – Source of Asian Conflict?
“China’s policy makers are already focused on how to change the country’s growth strategy to respond to the new challenges that will come, and avoid the “middle-income trap.” That is clearly reflected in both the 11th and 12th Five Year Plans, with their focus on quality of growth, structural reforms to harness innovation and economic… Continue reading The Middle Income Trap
A large conference on lung cancer was held in Beijing over the weekend, focusing not on the popular topic of China’s heavy air pollution, but rather smoking. Over the past 30 years, deaths in China due to lung cancer has increased by 465 percent. The theme of this year’s conference, according to CCTV, was “Controlling… Continue reading Smoking Killing in China
An article from the October 26th Economist writes about the notion that China still feels uncomfortable not producing its own food as discussed in class. It cites that “old thinking dies hard”, and the connection of the not yet distant memories tens of thousands starving due to great famine in the early 1960s. While China’s… Continue reading Self Sufficiency Still Important to China When it Comes to Food
The unprecedented urbanization that China has been experiencing has caused a “spectacular property boom” over the past decade. Migrants moving to cities from the countryside are increasing demand for city housing as do the increasing middle class looking for an upgrade. Residential sales have shot up 35% in the last three quarters of this year… Continue reading Chinese Housing Bubble
China already possesses the largest and longest high-speed rail network in the world. Its total length is 6,200 miles, making it longer than that of all of Europe’s put together. Demand seems to be no issue, these high-speed trains transporting almost 2 million people a day (a third of total number of rail passengers). This… Continue reading China High-Speed Railways to Expand
The most recent third Plenum has proposed many bold, structural reforms that, if implemented correctly, can both enhance the effectiveness of the government and improve the standard of living. The 60-point document has outlined measures to enable local governments to sell bonds in order to fund construction, thus deepening financial markets. Moreover, there… Continue reading Plenum: Market, Hukuo, SOE, and One-Child Policy Reforms
Last week, China unveiled its largest reform agenda in nearly 30 years with the goal of transitioning China into a more free-market consumer economy. This would imply fewer social controls, reduced power for state-owned giant companies, the removal of price controls and caps on interest rates, and transitioning towards more yuan convertibility. The plan also… Continue reading China’s New Reforms: Bad News For Markets?