In Today’s Talking Points: China to Raise Foreign Ownership Limit in Financial Services by Year-End;US hints at China truce as finance chiefs warn on trade war; Reserve Bank of Australia worried about China’s debt bomb; China’s transitioning economy
China to Raise Foreign Ownership Limit in Financial Services by Year-End
China ‘s financial sector is opening its doors to more foreign investment with the People’s Bank of China Governor Yi Yang announcing that foreign firms will be able to compete with local companies on an equal level. Some measures will be implemented as early as June, such as allowing foreign firms to invest in trust companies, financial leasing, consumer finance and auto finance.
Read more at: Insurance Journal
US hints at China truce as finance chiefs warn on trade war
Steven Mnuchin, US Treasury Secretary is considering a trip to China during a trade dispute with Beijing due to concerns it could jeopardise the global economic upswing. He claimed he was ‘cautiously optimistic’ of reaching an agreement with China with regards to differences in trade. Whilst no time has been set or anything has been confirmed, China’s Ministry of Commerce said it had received a request from the US for a visit and welcomes such a move. A visit from the US Treasury secretary to China could very well signal a breakthrough in trade relations between US and China.
Read more at: AFR
Reserve Bank of Australia worried about China’s debt bomb
The RBA has stepped up monitoring of China’s economic situations especially with regards to its decade-long credit binge. The RBA is particularly concerned China’s corporate relative to GDP which exceeds that of most advanced economies. In the latest bulletin, The RBA released an article on the shadow banking sector in China which currently stands at $US 7 Trillion, about 60 percent of GDP. Whilst they offer more flexible and innovative finances and households, lack of transparency, increased borrowing to risky borrowers, liquidity and maturity mismatches are also on the rise.
Read more at: AFR
China’s transitioning economy
China is ambitiously seeking to transform its manufacturing lead economy to one that is services and consumer driven. China’s economy has aggressively grown by exporting cheaply made goods around the world, however, such a strategy is unsustainable and has poorly impacted the environment. Quality, sustainability and efficiency will now be the focus of the government to promoting growth and ultimately push the next phase of development.
Read more at: World Finance