A recent report published by New York-based research company China Beige Book (CBB) revealed that China's economic growth is faltering, despite the government's 'mini-stimulus' strategies launched in May, which included a more relaxed approach to lending and a wave of infrastructure investment projects. The CBB report, which is compiled from surveys of more than 2,100 firms around China, noted that less than 20 percent of the firms surveyed borrowed in the third quarter, whether it be from the bond market, banks or shadow finance firms, which is a drop of 29 percent when compared to the third quarter of 2013. The report also shows that capital expenditures have dipped to the lowest level since the CBB survey began in 2012.
Analysts suggest that the increase in the mean bank loan interest rate from 6.95 percent to 7.47 percent may be a factor behind this trend, as well as the lackluster performance of the retail sector, which reflects consumer confidence. While up to half of the bankers surveyed by CBB reported an increase in loans to business, only one percent confirmed that 30 percent or more of their business was conducted with new borrowers, the balance being debt rollovers or increases to existing customers, indicating a lack of expansion.
So called 'shadow lending', the providing of loans through non-bank financial intermediaries, rose to 31 percent in the last quarter and is likely to keep growing. While bank lending retains the highest market share of loans business, alternative financiers, including trusts, credit-guarantee firms, leasing companies and money-market funds, are gaining ground. Many of these lenders are respectable businesses offering an above-board service, but are included in the term 'shadow lending' because they are not banks. It should be noted that trusts are regulated by the China Banking Regulatory Commission (CBRC) which also supervises China’s banks. However, some shadow lenders bend the rules on how much they can lend, what rates to charge and who to lend to. Shadow lenders raise money from businesses by offering higher returns than those offered by banks, then charge lenders even higher rates. Many of these lenders are unable to borrow from banks because of being in industries subject to overinvestment restrictions imposed by authorities.
Earnings Reaction History: China Finance Online Co. Limited, 40.0% Follow ...NASDAQChina Finance Online Co. Limited ( JRJC ) is due to issue its quarterly earnings report in the upcoming extended-hours session. Given its history, traders can expect light trading in the issue immediately following its quarterly earnings announcement.China Finance Online Reports Second Quarter and First Half 2014 Ended June ...MarketWatchall 11 news articles »
ABN Amro Unmoved by Qingdao Boosting China Commodity FinanceBusinessweekABN Amro Group NV's confidence in China is unshaken by the probe into loan fraud at the port of Qingdao and the Dutch lender plans to expand its commodity financing, according to its global commodities head. The Amsterdam-based bank found nothing ...and more »
China Finance Online Q2 FY2014 Results (JRJC)Seeking Alpha (registration)China Finance Online (NASDAQ:JRJC) released Q2 FY2014 results, which included revenue of 20.6 million USD and a net loss of -12.4 million USD. The company's stock has been grabbing some headlines recently, after skyrocketing nearly 150%, following ...
China's Financial Repression And Alibaba's Finance PlansForbesThere's an interesting little clash looming between Alibaba's plans to develop their financial offerings in China and the Chinese state's policy of financial repression. It would undoubtedly be true that the average Chinese person would be better off ...and more »
Hollywood ReporterBusan, China's Youku to Finance Rookie FilmmakersHollywood ReporterThe Busan International Film Festival is partnering with YoukuTudou's Youku, China's largest online video site, to support up-and-coming Asian filmmakers. The talent incubator initiative, dubbed "Asia's Masters and Newcomers Project," is designed to ...BUSAN: Festival launches Talent Incubator With China's YoukuVarietyBusan, Youku to sign MOUScreen Internationalall 17 news articles »
Wall Street JournalChina Finance Minister: Government to Keep Policy SteadyWall Street JournalBEIJING?China Finance Minister Lou Jiwei said the government won't change its economic policies drastically because of weakness in one economic indicator, in the latest official remarks that could damp hopes for an aggressive easing of policies. Mr ...Comprehensive growth target the focus: China finance ministerWantChinaTimesUS Stocks retreat from record highs on China jittersYahoo News UKStocks Move Lower on China Economic WorriesFox BusinessThe Star Onlineall 156 news articles »
- China's e-Commerce Market Booming - Editor, Wednesday 10 September 2014
- Upgrade of ASEAN-China FTA to be Negotiated - Editor, Wednesday 27 August 2014
- Foreign Automakers Gain Market Share in China - Editor, Wednesday 13 August 2014
- China and Cuba Discuss Trade and Investment - Editor, Wednesday 23 July 2014
- Swiss-China FTA Set to Increase Trade - Editor, Wednesday 9 July 2014
- China Aims For AIIB Founding By Year-End - Editor, Wednesday 25 June 2014
- New Texas-China Air Travel Routes Likely to Boost Trade - Editor, Wednesday 11 June 2014
As Chinese e-commerce company Alibaba prepares for its IPO through the New York Stock Exchange, the Dalian Wanda group in China announced on Friday that it would be entering into an e-commerce joint venture with Baidu and Tencent Holdings to be registered in Hong Kong. Wanda will own 70 percent of the new venture with Baidu and Tencent each holding 15 percent. The aim is to tap into China's e-commerce market, which is reportedly the largest in the world and currently dominated by Alibaba. The collaboration between the three companies will create the world's biggest online-to-offline (O2O) e-commerce platform, where people use their mobile devises to locate and buy goods and services, often while they are in or nearby the physical store.
More In Features
- China to Lift IPO Moratorium
- Editor, 4 December 2013
- China-EU Summit: Green Growth in a Safer World
- Editor, 20 November 2013
- Focus Shifts to Economic Growth as China’s Inflation Rate Eases
- Editor, 9 November 2011
- Exploring Opportunities at the World Chinese Entrepreneurs Convention
- Editor, 7 October 2011
At the 13th AEM-MOFCOM conference held earlier this week in Naypyidaw, Myanmar, it was agreed to upgrade the ASEAN-China Free Trade Area (ACTFA) in order to ensure that it remains relevant in today's economic climate. The AEM-MOFCOM (ASEAN Economic Ministers-Ministry of Commerce People's Republic of China) meetings formed part of the broader 46th ASEAN Economic Minister Meeting. The topic of Custom Procedures and Trade Facilitation (CPTF) negotiations was also raised, as well as the need to review the Sensitive Track and Rules of Origin, with a progress report to be made at the next AEM-MOFCOM consultation.
More In Trade
- New Texas-China Air Travel Routes Likely to Boost Trade
- Editor, 11 June 2014
- China Invests in Cleaning Up Pollution
- Editor, 19 February 2014
- China's Job Market Faces 'Mismatch' in Skills
- Editor, 6 November 2013
- Rare Earth Element Exports and Stocks Increase
- Editor, 11 September 2013
A recent report revealed that domestic automakers in China are losing market share to foreign automakers at a steady rate that appears set to continue as multinational corporations set up manufacturing plants in China. With an increasing number of China's citizens gaining wealth, new car sales are soaring, and more affluent consumers are choosing global brands which are seen as being safer, more reliable and more luxurious than locally produced vehicles. Moreover, restrictions on the number of license plates issued each year in Shanghai, Beijing and Guangzhou has made choosing a car an important decision, and buyers appear to be prepared to spend more on a car when they receive their much sought-after, and often long-awaited, license plates.
More In News
- China and Cuba Discuss Trade and Investment
- Editor, 23 July 2014
- Swiss-China FTA Set to Increase Trade
- Editor, 9 July 2014
- China Aims For AIIB Founding By Year-End
- Editor, 25 June 2014
- CIFTIS: Promoting Trade in Services in China
- Editor, 28 May 2014