China Has an Online Lending Crisis and People Are Furious about It

Matt Rivers and Jethro Mullen
CNN
The outcry shines a light on a murky corner of China's financial industry that authorities allowed to grow rapidly with little oversight. Promises of double-digit returns attracted people looking for more lucrative places to put their money...

China's Ant Financial Raises $10 Billion at $150 Billion Valuation: Sources

Kane Wu
Reuters
The capital-raising comes ahead of a widely expected initial public offering.

Conversation

10.06.17

Is China the Future of Bitcoin, or Its Past?

Andrew Collier, Isaac Mao & more
China often dominates the market for Bitcoin, a virtual currency managed by a decentralized network of computers: at points over the last few years, China may have accounted for more than 75 percent of Bitcoin trading. Energy subsidies there make it...

Books

08.21.17

China’s Banking Transformation

James Stent
In this timely and provocative book, James Stent, a banker with decades of experience in Asian banking and fluency in Chinese language, explains how Chinese banks work, analyzes their strengths and weaknesses, and sets forth the challenges they face in a slowing economy. Without minimizing the real issues Chinese banks face, China’s Banking Transformation challenges negative media accounts and reports of “China bears.” Based on his 13 years of service on the boards of China Minsheng Bank, a privately owned listed bank, and China Everbright Bank, a state-controlled listed bank, the author brings the informed view of an insider to the reality of Chinese banking.China’s Banking Transformation demonstrates that Chinese banks have transformed into modern, well-run commercial banks, playing a vital role supporting the country’s extraordinary economic growth. Acknowledging that China’s banks are different from Western banks, the author explains that they are hybrid banks, borrowing extensively from Western models, but at the same time operating within a traditional Chinese cultural framework and in line with China’s governance model.From his personal experience working at board level, Stent describes the governance and management of China’s banks, including the role of the Communist Party. He sees China’s banks as embedded in ancient concepts of how government and society work in China, and also as actors within a market socialist political economy. The Chinese banking system today bears similarities with banking in Northeast Asian “developmental states” of recent past, and also pre-1949 Chinese banking.As the first account of Chinese banking by a Westerner who has worked in China’s banks, China’s Banking Transformation should be read by anyone interested in the political economy of contemporary China, in Asian development issues, and in banking issues generally. The book dispels misconceptions and provides insight into the financial aspects of China’s economic growth story. —Oxford University Press{chop}

Conversation

08.03.17

As China Reins in Capital, What Next for Global Trade?

Yu Zhou & Peter Knaack
China’s Communist Party and its leader, Xi Jinping, are tightening controls on overseas spending by the country’s biggest companies and their highly visible billionaire CEOs. The Wall Street Journal reported recently that Xi personally signed off on...

China’s Banks Are Now Stable as ‘Shadow’ Banking Looks Less Threatening, Moody’s Says

CNBC
Moody’s Investors Service no longer takes a negative view on China’s banking system, raising its outlook to stable on Thursday as concerns over so-called shadow banking eased.

Environment

06.30.17

Can the AIIB Support Asia’s Energy Revolution?

from chinadialogue
The Asian Infrastructure Investment Bank (AIIB), headquartered in Beijing, held its second annual meeting on the Korean island of Jeju last week. Korea is currently positioning Jeju as a zero-carbon tourist destination, so the choice of location...

Books

06.20.17

Shadow Banking and the Rise of Capitalism in China

Andrew Collier
This book is about the growth of shadow banking in China and the rise of China’s free markets. Shadow Banking refers to capital that is distributed outside the formal banking system, including everything from Mom and Pop lending shops to online credit to giant state owned banks called Trusts. They have grown from a fraction of the economy 10 years ago to nearly half of all China’s annual 25 trillion renminbi (U.S.$4.1 trillion) in lending in the economy today.Shadow Banks are a new aspect of capitalism in China—barely regulated, highly risky, yet tolerated by Beijing. They have been permitted to flourish because many companies cannot get access to formal bank loans. It is the Wild West of banking in China. If we define capitalism as economic activity controlled by the private sector, then Shadow Banking is still in a hybrid stage, a halfway house between the state and the private economic. But it is precisely this divide that makes Shadow Banking important to the rise of capitalism. How Beijing handles this large free market will say a lot about how the country’s economy will grow—will free markets be granted greater leeway? —Palgrave Macmillan{chop}

Caixin Media

06.05.17

China to Boost Checks on Overseas Spending

China is stepping up supervision of the use of bank cards overseas, a move the foreign-exchange regulator says is needed to fight money laundering, terrorist financing, and tax evasion.Starting September 1, banks will be required to report on a...

Viewpoint

04.03.17

What Does the Future Hold for Business between the U.S. and China under Trump?

Ker Gibbs
We are now well into the first 100 days of the Trump administration. His supporters expect major changes in the China relationship. They voted for a man who promised to impose a 45 percent tariff on Chinese goods and slap China with the currency...

People’s Bank of China Raises Borrowing Costs in Step with Fed

Bloomberg
China’s central bank raised borrowing costs as a stable economy and factory reflation give it scope to follow the Federal Reserve in tightening policy.

Corporate China Hits Global Debt Market Milestone

Jennifer Hughes and Don Weinland
Financial Times
Banks and other corporate borrowers quietly encouraged to raise money offshore

China Bankruptcy Cases Surge as Economy Slows

Tom Hancock
Financial Times
Rise in liquidations reflects growing role for courts in tackling ‘zombie’ companies

How China’s Dumping of Treasurys Will Affect U.S. Borrowing Costs

Jon Sindreu
Wall Street Journal
Foreign buyers are holding a smaller share of the debt of the some of the world’s top nations

China Tightens Monetary Policy by Raising Money Market Rates

Bloomberg
China’s central bank tightened monetary policy by raising the interest rates it charges in open-market operations and on funds lent via its Standing Lending Facility as it shifts to reining in asset prices and inflation.

China Is Facing a Catch-22 Dilemma

Jacob Shapiro
Business Insider
A subsidiary of the Industrial and Commercial Bank of China (ICBC) has recently reached deals with seven Chinese state-owned enterprises to convert about 60 billion yuan ($8.7 billion) of unpaid loans into equity shares.

Caixin Media

10.12.16

Government Should Kick Land Sale Addiction to Cure Overheated Property Market

Chinese cities have rolled out new measures over the past week to cool a home-buying frenzy that has seen prices skyrocket, marking a new round of tightening since policies were eased two years ago. More than a dozen of China's largest cities,...

Tens of Thousands of Jobs Go as China’s Biggest Banks Cut Costs

Bloomberg
The cuts suggest that employment has peaked at the firms that are the world’s biggest providers of banking jobs.

Caixin Media

08.09.16

China's New 'Bad Loan' Managers: Savvy Saviors or Riskier than Ever?

As China's economy slows and defaults rise, 'bad loan' managers say they spot an opportunity to pick up bargains, because lenders are eager to shed toxic debt that might otherwise poison the broader financial system. Yet questions...

Likely Hack of U.S. Banking Regulator by China Covered Up

Jason Lange and Dustin Volz
Reuters
The report was released amid growing concern about the vulnerability of the international banking system.

Media

04.05.16

Chinese Censors Rush to Make ‘Panama Papers’ Disappear

David Wertime
On April 3, the Washington, D.C.-based non-profit International Committee of Investigative Journalists dropped what struck many as a bombshell: news that a leaked trove of 11.5 million previously secret files from Panama-based law firm Mossack...

China Banks Face Credit Risks from Ties to Wealth Management Products

Leslie Shaffer
CNBC
While WMPs offer high interest rates, it isn't always clear what assets the funds are buying to finance those payouts...

China Banks Face Credit Risks from Ties to Wealth Management Products

Leslie Shaffer
CNBC
Chinese banks are creating a web of risk through their WMPs, raising concerns about the health of the financial system.

Caixin Media

02.24.16

Regulators Leave Wealth Management Industry Unplugged

Financial market supervisors admit that gaping holes pockmark the regulatory fences they’ve built in recent years to control the wealth management industry and protect its investors.By occasionally introducing new rules and regulations, supervisors...

Caixin Media

02.19.16

Central Bank Governor on Reforming the Exchange Rate, Adopting a Digital Currency

Recently Zhou Xiaochuan, Governor of the People’s Bank of China (PBOC), China’s central bank, had an interview with Caixin and talked about the yuan exchange rate regime reform, macro-prudential policy framework, digital currency, and other topics...

Viewpoint

01.15.16

China’s New Development Bank Needs Better Human Rights Protections

Nicholas Bequelin
On January 16, the Board of Governors of the Asian Infrastructure Investment Bank (AIIB) will meet in Beijing to formally launch its operations.A symbol of China’s growing clout on the international scene, the AIIB attracted 57 founding members,...

China Seeks to Calm Markets as It Devalues Currency for 3rd Consecutive Day

Neil Gough
New York Times
Since Tuesday, the currency, the renminbi, has fallen 4.4 percent, the biggest drop in decades.

China Parliament Ratifies BRICS Bank Agreement

Ben Blanchard
Reuters
The BRICS Bank, is one of two international development banks that China is promoting as an alternative to western institutions such as the World Bank.

Chinese Stocks Surge Most Since 2008 for World’s Biggest Rally

Kyoungwha Kim
Bloomberg
Rally buoyed by optimism around government plans to boost foreign access to the nation’s markets.

This American VC Thinks He’s Getting Out of China Just in Time

Bloomberg
The 52-year-old began venture investing in China in 2009 and ended up putting money into 50 startups.

China Economy Loses More Steam in April, Further Stimulus on the Cards

Kevin Yao
Reuters
China's money supply grew at its slowest pace on record in April and investment growth sank to its lowest in 15 years...

China Rethinks Safety Net for Its Banking System

Neil Gough
New York Times
New deposit insurance could shake the public’s faith in the long-held belief in failsafe government bailouts.

China Airs Pilot Free-Trade Zone National Security Rules for Foreign Investment

Lawrence Chung
South China Morning Post
Investments in defence, the economy, social order, culture, and the Internet, will be reviewed.

China is Still Rising, Just More Slowly

Hu Angang
Foreign Affairs
Embracing China's "new normal" or why the economy Is still 
on track...

Media

04.02.15

‘Obama Is Sitting Alone at a Bar Drinking a Consolation Beer’

Bethany Allen-Ebrahimian
Danish and Chinese netizens have just shared in a collective guffaw at America’s expense. The online lampoonery came after Denmark announced on March 28 its intent to join the Asian Investment Infrastructure Bank (AIIB), a China-led initiative...

Taiwan’s Rash Decision to Join AIIB

Ricky Yeh
Diplomat
Taiwan’s legislative branch was never able to approve the application or review the evaluation reports and proposals.

Petrobras Deepens China Tie With $3.5 Billion Loan Deal

Juan Pablo Spinetto
Bloomberg
The world’s most indebted oil producer bolsters ties to China as corruption scandal shuts it out of international bond markets.

How China Plans to Shape New Asian Order

Charles Hutzler
Wall Street Journal
At the center of these efforts is the new Asian Infrastructure Investment Bank and plans for pan-Asian infrastructure .

China’s Zhou Says PBOC Has Room to Act on Growth Slowdown

Malcolm Scott
Bloomberg
The central bank chief's remarks follow China's weakest expansion since 1990...

U.S. About-Face on AIIB Would be Welcomed

China Daily
US leaders have for years said Asia-Pacific nations do not have to choose between China and the US.

South Korea Says It Will Join China-Led Asia Infrastructure Investment Bank

Wall Street Journal
Seoul makes assurances about AIIB’s governance, which U.S. has been wary about.

US Risks Epic Blunder by Treating China as an Economic Enemy

Ambrose Evans-Pritchard
Telegraph
The United States has handled its economic diplomacy with shocking myopia.

China on the World Stage: A Bridge Not Far Enough

Economist
China plans a new bank to help match Asia’s vast savings with its even vaster need for infrastructure.

China Gloats as Europeans Rush to Join Asian Bank

Simon Denyer
Washington Post
Xinhua described the U.S. as “petulant and cynical” for declining to join the Asian Infrastructure Investment Bank.

Global Push Aims to Change China’s Mind on Bank Rules: U.S. Official

Krista Hughes
Reuters
Lobby wants China to stop rules that would force tech vendors to Chinese banks to hand over source code. 

Defying U.S., European Allies Say They’ll Join China-Led Bank

Yann Le Guernigou and Ben Blanchard
Reuters
Germany, France and Italy have agreed to join a new China-led Asian investment bank.

Stiffer Bank-Technology Rules Loom in China

Eva Dou and Gillian Wong
Wall Street Journal
Beijing presses for secure and controllable systems; suppliers fear intrusive measures. 

US Anger at Britain Joining Chinese-led Investment Bank AIIB

Nicholas Watt, Paul Lewis and Tania...
Guardian
U.S. statement says of U.K. membership that it is ‘worried about a trend of constant accommodation’ of China. 

Caixin Media

02.25.15

Apple Pay Stalled, Frustrated in China

The central bank, UnionPay bank card service, and e-commerce giant Alibaba Group Holding Ltd. are standing up to Apple Inc.'s effort to bring the Apple Pay no-card, no-cash payment system to iPhone users in China."Apple is seeking to...

Is China Preparing for Currency War?

William Pesek
Bloomberg
As China grapples with its slowest growth in 24 years, President Xi Jinping is under pressure to stimulate the economy.

Caixin Media

02.03.15

Minsheng Bank President Resigns Amid Corruption Investigation

China Minsheng Banking Corp. said on January 31 that its president has resigned, shortly after people close to the matter said the Communist Party is investigating him for corruption.Minsheng said in a statement that Mao Xiaofeng had quit as...

Caixin Media

01.27.15

China Boots Up an Internet Banking Industry

Premier Li Keqiang recently launched a new era for banking in China by ceremonially pressing the "confirm" button for a 35,000 yuan loan issued to a Shenzhen truck driver.Li's gesture on January 4 on behalf of Shenzhen Qianhai WeBank...

Tencent Launches China’s First Online-only Bank

Gabriel Wildau
Financial Times
WeBank, a joint venture led by Chinese gaming and social network group Tencent Holdings, became the first private bank to start operations under a pilot, after the banking regulator granted licences to six such institutions last year. Its name comes...

Caixin Media

11.17.14

Visa and MasterCard Confront China’s Stacked Deck

Visa and MasterCard executives eager to expand in China were thrilled recently when Premier Li Keqiang seemed to suggest that a door would open to them for bank card yuan business in the country.But they had read Li wrong: The premier's...

Conversation

10.14.14

Will Asia Bank on China?

Zha Daojiong, Damien Ma & more
Last week The New York Times reported U.S. opposition to China's plans to launch a regional development bank to rival the World Bank and the Asian Development Bank. If, as some say, the the launch is a fait accompli, should Washington focus...

China’s Central Bank Said to Inject $81bn Into System

BBC
The move may be the first of several stimulus measures, analysts say. It is aimed at lifting business confidence and investment following a string of weak economic data.

China Eases Credit Rules for Some Property Developers

Esther Fung
Wall Street Journal
The biggest of China's some 85,000 property developers are the only ones likely to benefit from this credit loosening. Authorities have been trying to streamline the number of companies as part of economic overhauls...

China Says Consensus Reached on $100 Billion BRICS Bank

Reuters
The five BRICS nations have reached a broad consensus on their $100 billion development bank though some differences remain, a senior Chinese diplomat said ahead of a summit in Brazil next week.

Caixin Media

07.01.14

China Pulling the Plug on Foreign Mainframes

E-commerce companies and banks in China are scrapping hardware and uninstalling software for mainframe servers made by American suppliers in favor of homegrown brands said to be safe, advanced, and a lot less expensive.The movement has taken special...

China Now Has More Millionaires Than Any Country but the U.S.

Jason Chow
Wall Street Journal
China had 2,378,000 millionaire households in 2013, a rise of 82% from the previous year and almost double the 1,240,000 millionaire households in Japan, according to the Boston Consulting Group Global Wealth 2014 report unveiled on Tuesday.