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Ahead of China's National Congress we have seen some teasers pop out of Bejing. Latest if from leading Chinese Think Tank, State Information Center saying PBOC should tighten and strengthen controls on property markets.  This comes after World Bank warnings on Shadow Banking and S&P cutting the soveriegn debt rating.
Yuan Printing
The State Information Center is affiliated with the National Development and Reform Commission (NDRC).  Recommendations are often released to guage reaction to monetary policy changes, particularly overseas influencers. Capital controls and state-owned enterprise reforms are other policy changes to watch for.
Economist Zhu Baoliang of the State Information Center was writing in 21st Century Business Herald ahead of the Congress


  • No room for monetary policy loosening next year
  • Monetary policy was "too loose" in the past
  • CPI growth will accelerate to the target around 3%
  • China should keep fiscal policy loose while preventing local debt risks
  • China should strengthen property controls

As you can see, as is common with these 'teasers' there is no firm conviction with what if outs.

The think tank view points come out after recent concerns by the World Bank on Shadow Banking and the S&P's downgrade of Chinese sovereign debt last Thursday from A+ to AA-. They did keep China's outlook on "stable. The following day China's Ministry of Finance said on that was a "wrong decision" and based on a "long-standing mode of thinking, and misreading of the Chinese economy."

S&P senior director of sovereign ratings, Kim Eng Tan, said in a conference call;

"Despite the fact that the government has shown greater resolve to implement the deleveraging policy, we continue to see overall credit in the corporate sector staying at a 9 percent point," . "We've now come to the conclusion that deleveraging is likely to be much more gradual than we thought could have been the case early this year."

Debt-fueled investment in infrastructure and real estate has underpinned China's growth for years. But Beijing has launched a crackdown amid fears of a potential financial crisis.

Source: Bloomberg
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