BEIJING, Aug. 19 (Xinhua) — The Bank of China (BOC) Cross-border Renminbi (RMB) Index (CRI) increased 21 points month on month to 293 in June, according to the BOC on Wednesday.
The degree of activity in RMB cross-border transactions hit a record high in the month, and the degree of activity in RMB direct investment also witnessed year-on-year and month-on-month growth in June.
Meanwhile, the RMB under the current account saw a net inflow in June. Enditem
Category Archives: China
Wang Jianlin named world’s richest Chinese
HANGZHOU, Aug. 19 (Greenpost) — Wang Jianlin, chairman of China’s property and entertainment giant Dalian Wanda Group, has overtaken Hong Kong’s Li Ka-shing to become the richest Chinese in the world, according to the new Hurun Rich List, reported Xinhua.
Wang’s wealth increased more than 50 percent year on year to 260 billion yuan (40.6 billion U.S. dollars) as of early June, Hurun Research Institute said in a press release on Wednesday.
Hong Kong tycoon Li Ka-shing, 87, was the second richest with a fortune of 200 billion yuan and Jack Ma, founder and chairman of Internet giant Alibaba, was named third richest with wealth of 165 billion yuan.
The list includes 1,577 tycoons from 18 countries and regions worth a minimum 2 billion yuan. Of those listed, 302 are from Kong Kong, Macao, Taiwan and foreign countries.
Their combined wealth was 12.7 trillion yuan, equalling the annual gross domestic product of Russia.
Rupert Hoogewerf, chair and chief Hurun Report researcher, said that Hurun had released this first rich for Chinese worldwide in response to global attention given to Chinese business people.
Hurun has released a China Rich List since 1999.
Wang Jianlin started with real estate. In 2001, at a real estate yearly meeting, he was there together with Feng Lun, Alex Xu and Liu Yonghao as keynote speaker. 14 years later, he became the first richest Chinese while the others still very rich, but mostly focusing on real estate.
Wang has been transforming his real estate into cinemas and entertainment site. He also collected a lot of world famous art works.
He thinks internet is just a tool while Jack Ma is using internet to make numerous shops. Let’s see what will happen in the next 14 or 15 years.
Wang was born in Oct. 24, 1954. He joined the Chinese army in 1970 and graduated from Liaoning University in 1986.
Wang’s success benefitted from China’s opening up policy and the support of governments at various levels. It was also his own and his team’s wisdom to understand the leader’s will and transform his group a couple of times according to the trend.
Source Xinhua
Editor Xuefei Chen Axelsson
Pressure remains on Chinese economy
BEIJING, Aug. 12 (Xinhua) — Newly released economic indicators fell short of market expectations, revealing that the Chinese economy still lacks momentum and downward pressure remains.
China’s value-added industrial output, which measures the final value of industrial production, expanded 6 percent year on year in July, down from 6.8 percent for June, the National Bureau of Statistics (NBS) said Wednesday.
The decline in output growth ended a steady recovery trend recorded in the second quarter of this year.
NBS statistician Jiang Yuan attributed the drop mainly to flagging external demand, a weak property sector and lowered production of some consumer goods, including automobiles and cigarettes.
Year-on-year growth in the first seven months stood at 6.3 percent, the same level as the growth for the first half of the year.
The NBS data only tracks the output of large Chinese companies with annual primary business revenues of more than 20 million yuan (3.16 million U.S. dollars).
Industrial output in China’s western regions increased by 7.9 percent in July, trailed by 7.4 percent in central areas and 6 percent in eastern regions.
Manufacturing output rose 6.6 percent, mining output added 5.6 percent, while that of the electricity, heating, gas and water sectors dropped 0.2 percent, the bureau said.
China’s fixed-asset investment, a major driver of growth, also witnessed slightly slower growth, with no sign of improvement for investment in property and infrastructure.
Retail sales held steady in July, as the growth rate was just 0.1 percentage point lower than a month ago.
Qu Hongbin, chief China economist at HSBC, said the data fell below general market expectations.
The declining output and investment growth showed the rebound in June was just temporary and pressure for growth was again on the rise, Qu said.
“With gloomy prospects for external demand, China will still need to rely on domestic demand to maintain steady growth, indicating that future monetary and fiscal policies should continue to be relaxed,” he said.
China’s exports dropped 0.9 percent from a year earlier in the first seven months, according to new customs data.
A research note from Minsheng Securities also said China’s growth is still facing huge pressure and the country needs to make more efforts to realize its goal of annual economic growth of around 7 percent.
China should take more pragmatic measures to stabilize growth, including further cuts in the reserve requirement ratio (RRR) and more targeted measures to reduce long-term interest rates, Minsheng said.
Qu added that the disappointing figures will also reinforce the market’s expectations for further depreciation of China’s currency, the yuan, posing risks of overcorrection in the exchange rate, which may lead to retaliation from other countries.
On Tuesday, China’s central bank changed the exchange rate formation system to take into consideration the closing rate of the inter-bank foreign exchange market on the previous day, as well as supply and demand in the market and price movements of major currencies.
The central parity rate of the yuan weakened by about 1.6 percent against the U.S. dollar Wednesday, following a 2-percent depreciation on Tuesday.
HSBC forecast an additional 25-basis-point interest rate cut and a 200-basis-point cut to the RRR in the second half to sustain growth.
The central bank has cut both interest rates and the RRR three times since the beginning of this year. Enditem
Source Xinhua
China Headlines: All you need to know about China’s new FX policy
BEIJING, Aug. 12 (Greenpost) — When China’s central bank unexpectedly adjusted its yuan central parity system, it triggered the currency’s biggest decline for decades.
So, what exactly happened?
On Tuesday, the People’s Bank of China (PBOC) changed the way it calculated the yuan central parity rate, to close the gap between the rate and the actual trading rate on the money markets.
From Tuesday, the central parity rate has taken into account the previous day’s inter-bank market closing rate, supply and demand in the market and price movements of other major currencies.
Ma Jun, a central bank economist, described the change to the way the central parity rate is calculated as a “one-off” technical correction that should not be seen as the beginning of a devaluation trend.
Just what is the central parity rate?
Each trading day at 9:15 a.m. Beijing time, the central parity rates of the yuan are announced against 11 major currencies including the euro, sterling, U.S. dollar and yen. The rates are determined by a weighted average of pre-opening prices offered by market makers. When the inter-bank FX market opens 15 minutes later, trading may only take place within 2 percent of the rate.
Why now?
The U.S. dollar is strong and a sharp appreciation in the real yuan rate has hit China’s exports hard. The figures for July slumped by 8 percent. Furthermore, the central parity rate has gradually deviated from the market rate “by a large amount and for a long duration,” according to the PBOC, which has undermined “the authority and the benchmark status” of the central parity system.
How did markets react?
On Wednesday, the yuan declined sharply for the second day in a row, leading to a heavy sell-off in regional currencies and raising concern worldwide that volatility will become a drag on global economic growth.
Asian stocks fell.
The yuan is expected to remain weak and volatile in the near term.
Is this a deliberate move to stimulate exports?
Tuesday’s move is regarded as another step towards allowing market forces to determine the value of the yuan, but is probably not enough to make much difference to either exporters or China’s trade partners.
HSBC say the move does not mean that China has begun to purposely devalue the yuan.
“In an environment of soft global recovery, the benefits of beggar-thy-neighbor competitive devaluation are neither clear nor easy to reap,” was the bank’s analysis of the situation.
How will this affect the Chinese people?
A weaker yuan makes imported products more expensive and foreign travel more costly.
The Chinese are just getting used to their new prosperity. Shopping has become very important to them, especially shopping for imported goods. Foreign travel for its own sake, but more specifically for shopping, is central to the aspirations of China’s new wealthy classes. Those who plan to study abroad, particularly at American schools, will also feel the pinch.
Is all this good or bad for the yuan’s chances of a quick inclusion in SDR?
The International Monetary Fund (IMF) has welcomed the reform, which will certainly raise the prospects for the yuan becoming part of the IMF special drawing rights (SDR) currency basket sooner rather than later.
The change does not directly affect the push for SDR inclusion, but an IMF spokesman said on Wednesday that “a more market-determined exchange rate would facilitate SDR operations in case the yuan was included in the currency basket.”
What’s the risk?
The depreciation might trigger capital flight, dealing a blow to the stability of China’s financial system. Bloomberg economists Fielding Chen and Tom Orlik reckon that a 1-percent depreciation against the dollar will suck 40 billion U.S. dollars out of China. While 40 billion U.S. dollars is certainly not chicken feed, with massive foreign exchange reserves, substantial bank deposits and a controlled capital account, China is well set to deal with such an eventuality.
So, what next?
The PBOC has promised more FX reform along the lines of “market- orientation” and opening up the FX market. More foreign entities are being allowed to participate in China’s financial markets, and the onshore-offshore yuan exchange rate will gradually be unified. Enditem
China Focus: Chinese exporters see limited impact from weakening yuan
SHANGHAI, Aug. 12 (Greenpost) — China’s renminbi extended its sharp drop against the U.S. dollar on Wednesday from the previous day, but exporters say a weakened yuan has a limited effect on their business.
The official guidance rate of the Chinese currency shed 1.6 percent, or 1,008 basis points, on Wednesday, following Tuesday’s sharp fall of 1.9 percent.
Such a sharp decline against the greenback is unusual for the Chinese currency, which has been moving within a narrow range this year despite a firming dollar on expectations of the U.S. Federal Reserve’s rate hikes.
Analysts have largely attributed the correction in the exchange rate to China’s response to the IMF’s call for the currency to better reflect market forces, but the yuan’s weakening came on the heels of weak July export data. Yet exporters have shown a mixed response to the yuan’s drop in value.
“The depreciation does benefit Chinese exports, but to a limited effect.” said Liang Hong, chief economist at China International Capital Corporation.
Liang said that the depreciation that came as a result of tweaking the formation of the renminbi’s central parity rate will only marginally relieve the pressure on growth brought by slowing exports.
China’s July exports slid 8.3 percent from a year ago, far below the street consensus of -1.5 percent.
“The depreciation will boost confidence among exporters after the sluggish July export data,” said Lu Dong, deputy manager at the Shanghai branch of China Export & Credit Insurance Corp. “But that is not the purpose for the yuan’s slide and it won’t be the start of massive depreciation against the dollar.”
According to Julian Evans-Pritchard, China economist at Capital Economics, the change in how the reference rate is set is primarily intended as a move toward greater liberalization of the foreign exchange market ahead of the IMF’s decision about whether or not to include the renminbi in the SDR basket.
Though the yuan has depreciated significantly against the dollar, the drop in value is not as pronounced compared to other currencies.
Still, the yuan’s largest single day drop in almost two decades has some exporters cheering.
“Nothing makes me happier than seeing the yuan weaken against the dollar,” said Jiang Zhencheng, general manager of Shanghai Tianmao Stationary Co. Ltd.
“A strong yuan has blunted our competitiveness in the international market. The correction is such a relief for us as the United States is our key market,” Jiang said.
“The depreciation will benefit textiles and light industry as the two sectors in China are very export-oriented,” said CITIC analyst Ju Xinghai.
However, the actual positive impact of the depreciation is not as much as in theory because change in the exchange rate will lead to price adjustment, Ju added.
“The devaluation of the renminbi does work to our advantage. However, as a weaker yuan pushes up trade volume, our export price will also have to readjust,” said Li Qi, director of production at Licheng Clothing Group.
“Even if we don’t, our overseas clients will demand it anyway,” Li said. Enditem
2022 Olympics effect emerging in China
Stockholm, Aug. 16(Greenpost) — Still roughly seven years to go before the 2022 Winter Olympics open in Beijing, the “Olympic Effect” has begun to emerge.
For co-bidder Zhangjiakou, the successful bid not only means holding snow events, but also a catalyst for social and economic development.
Changes have already taken place in Chongli, a county in Zhangjiakou where cross country, freestyle and other skiing events would be held. Polluting mines are being closed, a specific measure to clear smog.
And, Chongli has attracted more tourists and skiing fans since Beijing launched the joint bid with Zhangjiakou in November, 2013.
The 2022 Winter Games is expected to further bolster local tourism and the skiing industry. Zhangjiakou expects the 2022 event to generate 350 billion yuan of investment and create 200,000 jobs.
Preparations for the Winter Olympics will accelerate the economic integration of this area into Beijing and Tianjin, its two developed neighboring municipalities.
A high-speed railway under construction linking Beijing and Zhangjiakou will cut the travel time from the capital to Chongli to around 50 minutes.
In Beijing, the authorities have vowed to curb air pollution, cutting PM2.5 by 20 percent by 2017, and by 45 percent in 2022. The Olympics will push Beijing to clean its sky. In another word, more blue skies might be the most important legacy of the event.
Beijing beat Almaty by 44 votes to 40 to win the hosting rights of the 2022 Winter Olympics at the 128th IOC session on July 31. Enditem
Source Xinhua
Vice Minister Ren Qiliang visits Sweden
Ren Qiliang, Vice Minister of Overseas Chinese Affairs Office of the State Council visits Sweden
By Xuefei Chen Axelsson
STOCKHOLM, Aug. 16 (Greenpost)– Ren Qiliang, Vice Minister of Overseas Chinese Affairs Office of the State Council has led a delegation of five members to visit Sweden during Aug. 13-15.
During his visit in Stockholm, Ren had helped cut the ribbon for the new office building of Swedish Chinese Federation of Industry and Commerce.
Ren said he was happy to attend this opening, he believed that the building would create good conditions for overseas Chinese in Sweden and facilitate them to conduct various activities such as lectures, dancing and singing as well as tourism, Chinese cousin, Kongfu and green-tech.
President of Swedish Chinese Federation of Industry and Commerce, Gongshanglian, Wang Jianrong also briefed the delegation about their plans in the future.
After the grand ceremony, the delegation also visited Swedish Chinese National Federation or Huazong which held a brief lunch meeting with the company of Chinese Embassador Chen Yuming.
During the lunch meeting, Ye Peiqun, Execultive Chairman of Swedish Chinese National Federation said over the past five more years, Chinese in Sweden has made great efforts in protecting Chinese interest and serving as a bridge between Sweden and China.
Ren said he was glad to see the Chinese in Sweden are successful in their work and life.
In the afternoon, Ren and his delegation held a seminar with Chinese in Sweden organized by the Chinese Embassy.
Counselor Guo Yanhang presided over the seminar.
Ren said the main purpose for his visit to Sweden is to greet the Chinese and listen to Chinese voices about their difficulties and needs.
“In the past, over 60 million overseas Chinese have made great contribution to China’s development, now China has developed a lot and China likes to have more cooperation with the overseas Chinese,” Ren said.
Guo Yancai, Chairwoman of the Women’s Committee under the Swedish Chinese Federation or Hualian, said the summer camping in China this summer was very good. She hopes there will be more of this kind of activity.
The Chinese schools masters including Ruijing, Ruiqing, Xinxing and others also mentioned to unite to conduct activities under the leadership of the Overseas Chinese Affairs of the State Council.
They are grateful for the assistance from the State Council and the Chinese Embassy.
Other members of the delegation include, Zhou Hong, Lu Haitian, Liu Hongmei and Zou Chuanbiao.
Ye Kexiong, from Qingtian, Liu Fang from Lianghu, Shuang Yan from European China Cultural Education Center and Chen Xuefei from China-Europe Cultural Association and two scores of other representatives attended the seminar.
China determines responsibilities of ministries on “Made in China 2025”
Stockholm, Aug. 16 (Greenpost) — Chinese government has determined the division of responsibilities on implementing the “Made in China 2025” plan among the related departments under the State Council, the Xinhua-run Economy & Nation Weekly reported on Friday.
According to the division, the relevant ministries and commissions will undertake tasks in ten different aspects.
These tasks include the construction of national technology innovation demonstration enterprises and enterprise technology centers, the demonstration of innovative designing in key areas, and the formulation of guidance on industrialization of scientific and technological achievements.
An official with the Ministry of Industry and Information Technology (MIIT) said some divided tasks that need to be implemented recently are especially important.
They include strengthening core technology research and development, which is led by the MIIT, the National Development and Reform Commission (NDRC) and the Ministry of Science and Technology (MOST); improving innovative design capability, which is led by the MIIT and the NDRC and supported by the Ministry of Education, the MOST, the Ministry of Human Resources and Social Security and the State Intellectual Property Office (SIPO); industrialization of scientific and technological achievements, which is led by the MIIT, the MOST and the NDRC and supported by the Ministry of Finance (MOF), the SIPO and the State Administration of Science, technology and Industry for National Defence; and strengthening innovation system construction for the manufacturing industry from an angle of conceptual design, which is led by the MIIT, the MOST and the NDRC and supported by the MOF.
Besides, China will use government fund as seed money to introduce social capital in the construction of innovation capability, the construction of innovation system and the industrialization of scientific and technological achievements. Enditem
Source Xinhua
China to regulate online equity financing platforms
Stockholm, Aug. 16 (Greenpost) — China’s securities regulator will soon begin inspecting online equity financing platforms to address risks brought by illegal activities and help the platforms better serve the real economy, according to Xinhua.
The China Securities Regulatory Commission (CSRC) will oversee several kinds of online platform, including equity-based crowdfunding, which allows investors to receive a stake in a company funded by pooling money from many people via the Internet, said Deng Ge, spokesman for the CSRC, at a press conference Friday.
The inspection aims to discover and correct illegal activities, minimize risks and lead platforms to perform better in serving the real economy, Deng said.
The inspection will focus on several aspects, including whether the online fund raisers have promoted themselves publicly, whether the accumulated number of equity holders has exceeded 200, and whether the raisers have collected private equity funds in the name of equity-based crowdfunding, Deng said.
Some institutions are operating in the name of “equity-based crowdfunding,” which are actually non-public equity financing or private equity funds raising, hence do not fall within the scope of equity-based crowdfunding activities allowed by the guidelines on promoting the healthy development of Internet finance unveiled easier in July, Deng said.
The CSRC has recently told governments at the provincial level to forbid institutions and individuals from illegally issue stocks under the guise of equity-based crowdfunding.
To support innovation and the healthy development of Internet finance, new policies were rolled out in July in guidelines by ten central government departments and industry regulators, including the People’s Bank of China (PBOC).
More regulation is needed to deal with Internet finance crime, and self-discipline is also required if the industry is to build a sound and honest environment for finance players.
“Internet finance could help small and micro enterprises with investment and fund raising, and also upgrade the quality and efficiency of financial services,” an official with the PBOC said during a press conference. Enditem
Source Xinhua
Top story: China,Belt & Road partners more cooperation on new energy
BEIJING, Aug. 13 (Greenpost) — The Sixth China (Gansu) International New Energy Expo held in China’s wind power base Jiuquan city of Gansu on August 8-9 drew 36 counties around the world to seek opportunities to cooperate with China on new energy development.
With energy self-sufficiency rate being at only 55 percent, Belarus hopes to bring in Chinese technology and investment to develop wind power, solar power and biomass energy to raise ratio of renewable energy in the energy structure, according to Belarusian First Deputy Energy Minister Leonid Shenets, reported China Securities Journal.
Pakistan is actively developing solar energy and plans to launch 3 GW solar PV power projects in 2016 for which Pakistan hopes to utilize Chinese new energy technology, according to State Minister for Water and Power Abid Sher Ali.
Several other countries of Central Asia, West Asia, South Asia, Africa, Oceania, as well as European Union have also expressed intent on cooperation with China on new energy development.
China’s new energy had stepped on fast development since 2005 and has topped the world in terms of wind power installed capacity, according to Liang Zhipeng, deputy director with department of new energy and renewable energy under the National Energy Administration (NEA), noting that China has ranked the second globally in terms of solar PV installed capacity. Chinese-made solar PV panels took up about 67 percent of the world’s total as of the end of 2014, Liang said.
The Belt and Road initiative has brought new cooperation opportunities for China and other countries worldwide on renewable energy development, said Wang Sicheng a researcher with the Energy Research Institute of the National Development and Reform Commission (NDRC), noting that more and more domestic new energy companies such as wind power enterprises will “go out” and explore international opportunities.
China had five wind turbine manufacturers export 189 wind turbines totally 368.75MW overseas in 2014, bringing total export capacity to 1.76125GW by the end of 2014, according to statistics by the Chinese Wind Energy Association. Enditem
Top story: Consumers prefer plug-in hybrid electric vehicles to BEVs
BEIJING, Aug. 11 (Xinhua) — Chinese consumers prefer plug-in hybrid electric vehicles (PHEV) to blade electric vehicles (BEV), according to a report released by the country’s automobile guild and a leading global marketing research firm on Tuesday.
About 14 percent of respondents would prefer to buy a PHEV for its longer run time and lower reliance on charging facilities, while only 8 percent prefer BEVs, despite the fact that sales of BEVs almost doubled those of PHEVs in the first half of 2015, according to a report released by the China Association of Automobile Manufacturers (CAAM) and Nielsen.
Sales of new energy vehicles in H1 more than doubled those in the first half of last year, and China is likely to become the world’s largest electric vehicle market, according to CAAM.
The report also said short run times, long charging times and too few maintenance stations are major barriers to growth of China’s electric vehicle market and revealed that consumers expect more preferential policies for buying and using new energy cars. Enditem
Rise of China benefits German export : EU think-tank
BRUSSELS, Aug. 11 (Xinhua) — The emergence of China is one of the leading contributors for the superb export performance of Germany in the 2000s compared to other European countries, a recent report by the Brussels-based think tank Bruegel said.
Germany is Europe’s export superstars, with an increase of 154 percent in exports between 2000 and 2013 compared to 127 percent in Spain, 98 percent in Britain, 79 percent in France and 72 percent in Italy, according to the report.
In addition, Germany is seen as a leading role model of successful adjustment from the “sick man of Europe” in the 2000s to an economic powerhouse today, because of a quick rebound in export growth after the financial crisis in 2009.
According to the European Union (EU) trade monitors, Germany contributes one third of the total trade volume between China and Europe. In the five years after the financial crisis, German exports to China almost doubled, a stronger increase than in any other European country.
To explain Germany’s exceptional export performance relative to other European countries, the Bruegel economists found that Germany has benefited more from the opening up of China compared to other European countries.
First, China has become an important sourcing region lowering the production costs of European exporters, the report said.
According to the indicators of the sourcing pattern of European exporters, the biggest gainers from sourcing in China were Britain and Austria. UK exporters, who offshored to China, almost doubled their export market share to the world, while Austria’s exporters increased their export market share by 70 percent compared to exporters which did not offshore to China.
Germany, as the largest European importer of Chinese goods, its imports accounted for 21 percent of all the 28 members of EU.
However, for the export market share of German exporters, sourcing from China was only marginally important. The most important benefit comes from the rapid modernization of China.
The modernization of China exhibited a growing demand for German products with its comparative advantage in machinery, transport equipment and other manufactured goods, the report said.
China has favored particularly Germany’s exports, the economists said, as Germany is the world’s top exporter of cars, vehicle parts, machinery, and engine parts.
Meanwhile, German products has won a global reputation on quality. About 40 percent of German exporters offer top quality goods relative to the market average, the report said.
The most essential reason for Germany’s exceptional export performance is that German export business model builds on quality.
“The focus on quality may explain why export growth in Germany rebounded quickly after 2009 in spite of rapid rising nominal wages,” the report said.
The economists said high quality comes from the effective management. German exports business operate with a decentralized and less hierarchical organization which empowers workers at lower levels of the firm hierarchy.
“Germany is a world champion in exporting because it is a world champion in organizing,” the report noted. Enditem
Top Story: China to become world’s largest NEV market: report
BEIJING, Aug. 12 (Xinhua) — China’s new energy vehicle (NEV) market is stepping into the growth stage from the demonstration stage and will become the largest NEV market in the world, according to a report released by the country’s automobile guild and a leading global marketing research firm on Tuesday.
The report, which was released by the China Association of Automobile Manufacturers (CAAM) and Nielsen, attributes the NEV sales surge in the first half of 2015 to China’s policy supports.
It said Chinese government released and implemented more than ten NEV-related supportive policies and standards in the first six months of this year and the number of NEV demonstrative cities increased to 89.
However, only 53.9 percent respondents participated in a survey know about the NEV subsidy policies, and only Beijing, Shanghai and Shenzhen have higher proportion rates.
The report also said short run times, long charging times and too few maintenance stations are major barriers to China’s NEV industry development.
NEV sales in China in July surged 3.3-fold year on year to total 16,884 units, according to a CAAM press release on Tuesday. In the first half of 2015, NEV sales jumped 2.4-fold year on year. In a breakdown, the sales of pure electric cars and plug-in hybrid power cars hiked 2.9-fold and 1.9-fold year on year, respectively. Enditem
IMF welcomes China’s move to improve forex formation system
WASHINGTON, Aug. 11 (Greenpost) — The International Monetary Fund (IMF) on Tuesday welcomed China’s move to improve its foreign exchange formation system and said a more market-oriented exchange rate would facilitate the Special Drawing Right (SDR) operation if RMB was included in the basket.
“The new mechanism for determining the central parity of the RMB announced by the People’s Bank of China (PBC) appears a welcome step as it should allow market forces to have a greater role in determining the exchange rate,” an IMF spokesperson said in a statement on Tuesday.
The spokesperson said that greater exchange rate flexibility is important for China as it strives to give market forces a decisive role in the economy and is rapidly integrating into global financial markets. The IMF also said China has the ability to achieve an effectively floating exchange rate system within two or three years.
In regard to the IMF’s ongoing review on whether RMB will be included in the SDR basket or not, the spokesperson said China’s move has no direct implications for the criteria used in determining the composition of the basket.
But the spokesperson added that a more market-oriented exchange rate would facilitate SDR operation in case the RMB were included in the basket.
The People’s Bank of China on Tuesday announced the decision to improve its central parity system to better reflect market development in the exchange rate between the Chinese yuan against the U.S. dollar. Enditem
Source Xinhua
Switzerland begins public consultations on joining China-led AIIB
GENEVA, Aug. 12 (Greenpost) — Switzerland’s Federal Council launched on Wednesday public consultations to cement the country’s membership with China’s Asian Infrastructure Investment Bank (AIIB), a financial institution seeking to foster sustainable development in Asia.
This follows the June signing of the Articles of Agreement by Swiss Federal Councillor Johann Schneider-Ammann in Beijing.
Switzerland is one of 57 prospective founding members, and has demonstrated great interest from the onset as it was amongst the first European countries to enter the AIIB’s founding process.
According to the Swiss State Secretariat for Economic Affairs (SECO), the confederation’s stake in the bank’s 100 billion U.S. dollars capital stock will be a total of 706,4 million U.S. dollars, to be paid in five annual instalments.
Switzerland’s voting power (0.8745 percent) will yield more clout than its financial input through the country’s basic and founding member votes.
SECO also indicated that the confederation will continue to actively take part in the bank’s foundation while vying for a seat on the AIIB’s Board of Directors.
Both Switzerland’s development policy and its foreign economic policy are in tune with AIIB plans to finance infrastructure projects in Asia by using its own resources and through public funds and private investment.
Particular emphasis will be placed on the areas of transport, energy and water supply, ports, the environment, urban development and logistics, information technologies and telecommunication, as well as rural and agricultural development.
SECO mentioned that Switzerland’s participation will also enhance economic relations with both China and Asia, with new opportunities expected to arise for Swiss businesses in the region.
With the deadline shortened by three weeks to accelerate the launching of the ratification process, the consultations are expected to run until Sept. 2. Enditem
Source Xinhua