The new China-led bank offer an alternative, US-style or China-style? I reckon most are frustrated by US-style, and opting for the China-style...
Japan is in a most embarrassing position now.
U.S. urges allies to think twice before joining China-led bank
BERLIN/WASHINGTON - The United States urged countries on Tuesday to think twice about signing up to a new China-led Asian development bank that Washington sees as a rival to the World Bank, after Germany, France and Italy followed Britain in saying they would join.
The concerted move by U.S. allies to participate in Beijing's flagship economic outreach project is a diplomatic blow to the United States and its efforts to counter the fast-growing economic and diplomatic influence of China.
Europe's participation reflects the eagerness to partner with China's economy, the world's second largest, and comes amid prickly trade negotiations between Brussels and Washington.
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http://www.todayonline.com/business/majo...nk-reports
China still has closed financial system with poor transparency, US may be right this time.
China has high chance end up like japan as well the way they have been booming.
sent from my Galaxy Tab S
China's education 'inadequate'
Economic survey Lisa Murray AFR Correspondent
550 words
21 Mar 2015
The Australian Financial Review
AFNR
English
Copyright 2015. Fairfax Media Management Pty Limited.
Shanghai | China must overhaul its "woefully inadequate" vocational education system, pay school teachers more and unwind an "excessive" focus on exams and rote learning if it wants to transform its economy, the Organisation for Economic Co-operation and Development says.
In its latest economic survey, the OECD singled out China's education system, warning it was not producing graduates and workers with the right skills for a services-based economy.
The OECD expects China's economy to grow at 7 per cent this year, in line with the government's target, dipping slightly in 2016 to 6.9 per cent from an expectation of 7 per cent. The risks to its forecasts were "mostly on the downside", it warned, because stimulus measures might fail to offset the effects of a sluggish property market, shrinking excess capacity and the anti-corruption campaign which has crimped consumer spending.
"Imbalances in the property and some heavy industry sectors have started to unwind and while risks remain, they appear to be manageable," the report said. "The property market price correction is likely to continue until the inventory overhang is worked off and more affordable prices broaden the group of home buyers."
The report came amid speculation the government will ease property purchase restrictions and even cut taxes to support the real estate sector. The state-owned China Securities Journal reported on Friday that the Ministry of Housing and Construction had been asked to prepare the policy changes.
But the OECD report was more focused on China's education system. While China compares favourably to other countries in terms of international test scores, particularly in maths, the OECD said its education system was failing to meet labour market needs. "Workplace training-based vocational education arrangements are woefully inadequate," it said.
It was crucial to improve education to transform China from "the world's factory to a leading innovator".
Among its recommendations, the OECD said more effort needed to be made to provide better education for the children of migrant workers and universal access to pre-school. Teachers should be paid more and focus more on creativity rather than rote learning and exams. This might require more central government funding.
The OECD noted the focus on exam results had spawned a profitable and rapidly expanding tutoring industry. More than 71 per cent of families spent money on after-school coaching in 2011. It also said college training needed to catch up with the rapid development of the country's services sector in recent years to provide enough professionals in areas such as sales and marketing.
Students needed to be better informed about labour market prospects because the country suffered from high job turnover. Forty-three per cent of vocational college graduates and 24 per cent of university graduates quit their job within six months because of a lack of development opportunities and low salaries.
"To meet market demand for vocational skills, professional education and training efforts need to be stepped up. More students should learn marketable skills and more government support should be directed to such training," the report said.
Key pointsOECD economic report says vocational education is failing to meet market needs.
It suggests paying teachers more and focusing on creativity not rote learning.
Fairfax Media Management Pty Limited
Document AFNR000020150320eb3l0001h
China retirement age set to rise over 5 years
Lisa Murray AFR correspondent
548 words
11 Mar 2015
The Australian Financial Review
AFNR
English
Copyright 2015. Fairfax Media Management Pty Limited.
Shanghai | China's pension system is facing "enormous pressures" as the country's population ages rapidly and its workforce shrinks, prompting policymakers to push forward with a plan to lift the retirement age.
Human resources minister Yin Weimin said on Tuesday the plan would be released later this year, and introduced gradually - over a period of five years - after receiving government approval. The compulsory retirement age is now 50 to 55 for women and 60 for most men. Economists expect those will be lifted by five years.
Mr Yin said the government would also increase welfare spending and expand the pension system nationwide to cope with the demographic changes.
As the government pondered a resolution to one of the biggest long-term challenges facing the economy, the National Bureau of Statistics released its latest report, highlighting the key short-term risk of disinflation.
The report was mixed as consumer prices rose by a more than expected 1.4 per cent in February, pushed up by higher food, transport and accommodation charges over the Chinese New Year holiday period. However, when averaged over the first two months of the year, to adjust for the holiday, the increase was 1.1 per cent, well below the government's target this year of about 3 per cent.
Producer prices, meanwhile, have now been falling for three straight years, dropping 4.8 per cent in February, driven by lower oil and metals prices.
"We continue to expect inflation to remain relatively low and still see disinflationary pressures in the economy," Nomura economists said in a research note. "To offset headwinds to economic growth, we expect monetary policy to be loosened further."
Still, after two interest rate cuts in less than four months, the bigger than expected jump in consumer prices in February, up from a five-year low inflation rate in January, will relieve some of the immediate pressure on the government to do more to stimulate the economy.
Last week, Premier Li Keqiang lowered the economic growth target for this year to about 7 per cent, as the country battles a slowing property market and the government reduces its reliance on the supercharged investment spending of the past few decades.
Mr Yin said during his press conference on Tuesday on the sidelines of China's annual parliamentary meeting in Beijing, the slowing economy was making it harder to create enough jobs for China's millions of graduates every year. An estimated 7.5 million graduates will enter the workforce this year.
Mr Yin said in January and February, employment had slowed down compared with the first two months of 2014 but he was still "confident" the government would reach its target of creating 10 million new jobs in 2015.
According to the human resources ministry, people aged over 60 in China now account for 14.9 per cent of the population, a number that is expected to jump to 38.6 per cent by 2050.
Just over three people support one retiree but that ratio will be reduced to 1.3 people by 2050.
China's average retirement age is only 54 years old, Mr Yin said, which compares to between 65 and 67 in developed countries.
Fairfax Media Management Pty Limited
Document AFNR000020150310eb3b00020
China financial reform is speed-up...
China Said to Weigh Easing Curbs on Foreign Securities Firms
(Bloomberg) -- China is considering sweeping changes to its securities industry that would allow foreign banks to control their local joint ventures and broaden their offerings, said people with knowledge of the matter.
Overseas firms could be allowed to own majority stakes in local ventures as soon as this year, and they may ultimately be able to take full control, said the people. Regulators also plan to give foreign-owned joint ventures permission to expand into areas beyond stock and bond underwriting, they said, asking not to be named as the deliberations are private.
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http://www.bloomberg.com/news/articles/2...s-i7lg5frw
A timely relaxing of regulation...
China loosens home-buying rules to counter economic slowdown
BEIJING (March 31): China has announced steps to make buying and selling a home cheaper, intervening to revive a slumping property market that’s weighed on economic growth and cut demand for commodities from copper to steel.
The required down payment for some second homes was lowered to 40 percent from 60 percent, the People’s Bank of China said on its website.
The finance ministry later said select homeowners will be exempted from a sales tax if they sell after holding a property for two years or more. The previous minimum to avoid the 5.5 percent tax was five years.
The moves add to the government’s efforts to arrest a slide in home prices and spur growth that the government targets to expand at its slowest pace in 15 years.
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http://www.theedgemarkets.com/sg/article...c-slowdown
With all legitimate avenue of corruption being hit including Macau casino, financial markets appear to be a legal alternative for some well connected folks it seems... of course the messes need to be mobilised to feed the whales and the sharks...
Source: China Spectator - The Australian
China's high-risk plan to revive its economy
JULIAN SNELDER 7 HOURS AGO 1
ECONOMY CHINA GLOBAL NEWS ASIAN ECONOMY MARKETS
Beijing needs to untangle its debt knot and begin the recapitalisation of the banks and the entire economy, this post argued last June. In hindsight, it looks like the mandarins did have a plan, as Bloomberg reports:
"In August, a fascinating campaign unfolded in China's state-run media, prodding citizens to pile into stocks. In one week alone that month, the official Xinhua News Agency ran at least eight articles touting the wonders and patriotic virtue of owning equities. The People’s Daily and local television channels joined in what analysts agreed was a Party-sponsored drive to bolster a sagging market."
The last few months have seen an explosive growth in domestic share prices and volumes. The market, now valued at $US7 trillion, has doubled, drawing in excited investors. Last week, on a single day, $US250 billion was bought and sold on the Shanghai and Shenzhen exchanges together (NYSE plus Nasdaq turn a fairly steady $US45bn daily). Valuations in glamorous sectors are at 220 times annual earnings, well above the Nasdaq's peak in 2000.
Retail investors are 90 per cent of this turnover, and margin debt is financing at least 15 per cent of trading. A million new brokerage accounts are being opened every two days. The ‘float’ of tradeable shares is churned every three weeks on average; Warren Buffett-style investing this ain’t. An academic study warns, with not a little condescension, that "more than two-thirds of new investors have never attended or graduated from high school". Their euphoria is approaching "frenzy" levels.
The state media continues to approve the market surge that it, apparently, orchestrated. What is curious -- and significant -- is that this bull market is happening while the economy worsens. Normally equities might be expected to go up when the earnings outlook is improving. But industrial profits actually are shrinking. Physical indicators like iron ore and coal prices suggest business is still slowing. Xinhua insists that the rally is justified, while also warning that a strong stockmarket "is crucial for sustaining an economy under downward pressure". The influential news agency is arguing that the market rally is warranted both because of and despite the slowing economy. In other words, the rally is good because things are bad and China needs the rally.
That paradox is no puzzle. China is following the interventionist playbook adopted by many authorities since 2009, engineering a rally to alter the economy the market should supposedly reflect. Ben Bernanke in 2010 explicitly targeted higher stock prices to induce a self-fulfilling "wealth effect" to revive a still-struggling US economy.
Japan and Europe copied his QE strategy, to push down interest rates seeking to spur economic recovery. China sees the equity market as a key catalyst to bolster confidence and to bootstrap its reform and deleveraging plan.
MORE FROM JULIAN SNELDER
26 MarThe truth about development banks
24 MarChina's ruling party is not afraid of the middle class
11 MarChinese SOE reform: one step forward and two steps back
23 FebKeeping watch on China's mounting debt
18 FebIs education the next Hong Kong battleground?
Here's how elevated share prices could help it: The banks need more capital, but as I mentioned last June they can only raise new capital at over 1 times book value. The recent surge in prices has moved this multiple from under this threshold to 1.2-1.3 times. In theory, today's bank multiples thus allow new shares and new capital to be raised, and this can kick-start a virtuous cycle of debt reduction through the entire economy. It has been noted that fully 80 per cent of China's IPO backlog is in financials. While the big banks appear to be in decent shape, there are dozens of weaker ones that badly need to raise funding. Reforms like the local government debt swaps and gradual financial liberalisation should lower interest rates over time, allowing the banks ‘cheap time’ to recapitalise.
Well that's the idea. Whether the equity market fever today, driven by retail money, can be sustained long enough to obligingly absorb trillions of yuan of new deals will be crucial. A cynic might note that most of the money raised for the financial sector so far has been not in banks but in securities brokerages, which happen to be the direct beneficiaries of the recent share trading boom, Not surprisingly, they too are cheering their own party. Now, Hong Kong is starting to participate in Shanghai's spectacular action, as southbound flows on the cross-exchange connection spill over from mainland investors, seeking to arbitrage cheaper prices. Their exuberance has been amplified by announcements of a further relaxation on Chinese mutual funds investing over the border. The chairman of the Hong Stock exchange has proclaimed that "the party is here to stay... there is much more to come".
With the media, brokers and regulators all egging on this remarkable rally from nowhere, what could possibly go wrong? Alas, the history of the Shanghai market is a tragic one. The more violent the upward action, the greater the risk of a crash. Policymakers will not wish to repeat the 2007 bubble-bust, which cost many investors 70 per cent of their funds. That the stockmarket's renaissance has coincided precisely with the halving in Macau's gaming revenues suggests it has become a vehicle for speculation. What Beijing should desire is not a casino but a market sufficiently robust to fund new issuance.
Actually, what it really needs is an environment in which companies are improving profitability. An expensive and fragile 'paper' asset market won't help them much unless they can actually raise fresh money or accumulate equity organically through retained earnings. But the market may itself revive animal spirits in the economy, another tool in the hands of the central authorities to shape consumer confidence. Their plan just may work.