Chinese investors withdrew hundreds of billions of yuan from major banks in the first 10 days of December, state media said Friday, on falling expectations the currency will strengthen. Deposits fell 400 billion yuan ($62.8 billion) as the unit comes under the biggest selling pressure since the 2008 global downturn, with a slowing domestic economy and turmoil in Europe and the United States fuelling demand for the US dollar. Half of the withdrawals were from the Bank of China, which has the largest foreign exchange business, the 21st Century Business Herald said, citing unidentified sources. Other banks affected were the Industrial and Commercial Bank of China, China Construction Bank and Agricultural Bank of China, the report said. Depositors may be withdrawing funds because they no longer expect the yuan to appreciate strongly next year, it said. Export-dependent China tightly controls the value of the currency, which critics say gives the country's manufacturers an unfair … [Read more...] about China’s bank deposits fall as investors sell yuan
China industrial bank
Confronted with a plunge in its stock markets last year, China's central bank swiftly reached out to the U.S. Federal Reserve, asking it to share its play book for dealing with Wall Street's "Black Monday" crash of 1987. The request came in a July 27 email from a People's Bank of China official with a subject line: "Your urgent assistance is greatly appreciated!" In a message to a senior Fed staffer, the PBOC's New York-based chief representative for the Americas, Song Xiangyan, pointed to the day's 8.5 percent drop in Chinese stocks and said "my Governor would like to draw from your good experience." It is not known whether the PBOC had contacted the Fed to deal with previous incidents of market turmoil. The Chinese central bank and the Fed had no comment when reached by Reuters. In a Reuters analysis last year, Fed insiders, former Fed employees and economists said that there was no official hotline between the PBOC and the Fed and that the Chinese were often reluctant to engage at … [Read more...] about China central bank to Fed: A little help, please?
China’s industrial production and retail sales both slowed in the first two months of the year, highlighting the pressure leaders will face to meet this year’s annual growth target even as the central bank governor said major stimulus wasn’t needed. Industrial output rose 5.4 percent from a year earlier in January and February, the National Bureau of Statistics said Saturday, compared with the 5.6 percent median estimate of economists surveyed by Bloomberg. Retail sales climbed 10.2 percent from a year earlier, missing the 11 percent projected gain in the survey, while fixed-asset investment exceeded estimates with a 10.2 percent increase. The reports highlight the choice facing policy makers: step up monetary and fiscal stimulus and build up more debt, or let the nation’s industrial engines slow further while reducing overcapacity in the steel, cement and coal sectors. Steel output fell in the two-month period, while aluminum output tumbled 7.7 percent, … [Read more...] about China industrial output, retail sales slow as property gains
China's central bank said on Thursday there was no reason for the yuan to fall further given the country's strong economic fundamentals, in a bid to reassure jittery global markets after it devalued the currency earlier in the week. As the yuan slid for a third straight day, the People's Bank of China (PBOC) said the strong economic environment, sustained trade surplus, sound fiscal position and deep foreign exchange reserves provided "strong support" to the exchange rate . China's decision to devalue the currency on Tuesday by pushing its official guidance rate down 2 percent sparked fears of a "currency war" and roiled global financial markets, dragging other Asian currencies to multi-year lows. It also drew accusations from U.S. politicians that Beijing was unfairly supporting its exporters. The PBOC said at the time that the move was a one-off depreciation, but sources involved in the Chinese policy-making process told Reuters that some powerful voices within government were … [Read more...] about China c.bank tries to soothe global markets, says no reason for yuan to fall further
China’s central bank stepped up efforts to cushion its economic slowdown amid plunging stock prices and a weakening currency, cutting the amount of cash the nation’s lenders must lock away. The required reserve ratio will drop by 0.5 percentage points effective March 1, the People’s Bank of China said on its website Monday. That will take the level to 17 percent for the biggest banks, still one of the highest such ratios in the world. The move marks a return to more traditional easing after the central bank indicated in recent weeks it would spur growth by guiding interbank markets lower and injecting liquidity through open-market operations. Governor Zhou Xiaochuan highlighted scope for further action ahead of a Group of 20 meeting in Shanghai last week, saying China had “multiple policy instruments” to address growth risks. Finance Minister Lou Jiwei said at the event that China will expand its fiscal deficit to support structural reforms to the economy, … [Read more...] about China cuts banks’ reserve requirement ratio