Chinese Bank Offered Clients Chance to Dine With Trump for $150,000

Bloomberg News
Bloomberg
China’s second-largest state-owned bank offered wealthy clients the opportunity to have dinner with the American president for $150,000 a ticket, spurring a complaint from Donald Trump’s re-election campaign to the U.S. Department of Justice.

U.S. Considered Blacklisting Two Chinese Banks over North Korea Ties

Christian Berthelsen
Bloomberg
U.S. officials alarmed by public displays of Pyongyang’s nuclear and missile technology last summer considered taking the provocative step of blacklisting two of China’s biggest banks from the U.S. financial system for doing business with North...

Books

04.12.18

China’s Great Wall of Debt

Dinny McMahon
Houghton Mifflin Harcourt: Over the course of a decade spent reporting on the ground in China as a financial journalist, Dinny McMahon gradually came to the conclusion that the widely held belief in China’s inevitable economic ascent is dangerously wrong.In this unprecedented deep dive, McMahon shows how, lurking behind the illusion of prosperity, China’s economic growth has been built on a staggering mountain of debt. While stories of newly built but empty cities, white elephant state projects, and a byzantine shadow banking system have all become a regular fixture in the press in recent years, McMahon goes beyond the headlines to explain how such waste has been allowed to flourish, and why one of the most powerful governments in the world has been at a loss to stop it.Through the stories of ordinary Chinese citizens, McMahon tries to make sense of the unique—and often bizarre—mechanics of the Chinese economy, whether it be the state’s addiction to appropriating land from poor farmers, why a Chinese entrepreneur decided it was cheaper to move his yarn factory to South Carolina, why ambitious Chinese mayors build ghost cities, or why the Chinese bureaucracy was able to stare down Beijing’s attempts to break up the state’s pointless monopoly over the distribution of table salt.Debt, entrenched vested interests, a frenzy of speculation, and an aging population are all pushing China toward an economic reckoning. China’s Great Wall of Debt unravels an incredibly complex and opaque economy, one whose fortunes—for better or worse—will shape the globe like never before.{chop}

China’s Financial Opening Isn't Quite What It Seems

Andrew Polk
Bloomberg
Although trade tensions between the U.S. and China show no signs of abating, there are some reasons for cautious optimism.

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}

Chinese Billionaire Battles Talk of Trouble at Real Estate Empire

CNN
Last week Dalian Wanda sold several theme parks and dozens of hotels for $9.3 billion, marking the end of Wang Jianlin’s dream to defeat Disney (DIS) in China. The billionaire said the deal would reduce his company’s debt burden. It followed several...

China Cracks down on Dalian Wanda’s Overseas Deals: WSJ

Reuters
China’s regulators have told banks to stop providing funding for several of Dalian Wanda Group’s overseas acquisitions as Beijing looks to curb the conglomerate’s offshore buying spree, sources familiar with the matter said on Monday.

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...

China Banks Extend Record 12.65 Trillion Yuan in Loans in 2016 as Debt Worries Mount

Sue-Lin Wong and Lusha Zhang
Reuters
China’s banks extended a record 12.56 trillion yuan ($1.82 trillion) of loans in 2016 as the government encouraged more credit-fueled stimulus to meet its economic growth target

China Adds Curbs on Pulling Money Out of the Country

Bloomberg
New restrictions added as authorities seek to prevent a flood of capital outflows from destabilizing the financial system

JPMorgan Chase Paying $264 Million to Settle Allegations of Nepotism in China

Jim Zarroli
NPR
The bank isn't being formally charged, but by agreeing to pay the fines, it brings a three-year investigation by the U.S. government to a close...

Surge in Offshore Yuan Borrowing Rate Suggests China Intervention

Saumya Vaishampayan and Lingling Wei
Wall Street Journal
Move by banks in Hong Kong market, likely at behest of PBOC, seems aimed at bets against yuan.

Environment

08.11.16

China-Led Development Bank Careful to Cooperate with Critics

from chinadialogue
The Asian Infrastructure Development Bank (AIIB) unveiled its initial batch of projects at its first annual meeting in Beijing in June, giving the go-ahead to investments totaling U.S.$509 million (3.4 billion yuan) and providing an important...

Trainer Seen on Video Spanking Bankers For Poor Performance

CBS News
Bad press for corporate motivational coach who is wacking employees for not reaching full potential....

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

02.19.16

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,...

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...

China Pushes Cleanup of Banks

Daniel Inman and Fiona Law
Wall Street Journal
Top four lenders are raising capital and 'Bad Banks' are being created to absorb soured loans...

Anson Chan on Beijing’s Pressure Tactics in Hong Kong

Michael Forsythe
New York Times
In an interview, Anson Chan talked about what she sees as increasing control from Beijing, which had guaranteed Hong Kong a high degree of autonomy until 2047 under the “One Country, Two Systems” formula.

Hong Kong Media Worries Over China’s Reach as Ads Disappear

Michael Forsythe and Neil Gough
New York Times
In what may be a major escalation of pressure by mainland China on Hong Kong’s independent-minded news media, two major British banks have stopped advertising with one of the city’s biggest newspapers, a top media executive said.

China’s New Diplomatic Strategy in Africa: Humility

Eric Olander & Cobus van Staden
Just a few weeks after Chinese premier Li Keqiang admitted that China was going through “growing pains” in its engagement with Africa, Beijing’s central bank chief, Zhou Xiaochuan, acknowledged some of the 2,500 PRC companies operating in Africa are...

Media

05.13.14

Why Are There No Credit Scores in China?

Few would dispute that Chinese society suffers from a serious trust problem. After surviving crafty scams and shoddy products for years, Chinese people have become guarded with strangers and cautious in business dealings. Given all that, it would be...

Investigative Stories Delve Into the Use of Offshore Companies by Chinese

Edward Wong
New York Times
This year's first big China investigative story has come from the International Consortium of Investigative Journalists...

Report Says China’s Elite Use Offshore Companies

Andrew Jacobs, David Barboza
New York Times
The report names many of China's wealthiest citizens, as well as relatives of Xi Jinping, Wen Jiabao, and descendants of the CCP's founders...

China Cannot Relax War on Corruption

Financial Times
(Editorial) “We should not dismiss the way Mr. Xi is trying to deal with the problem.”

China’s Scandal-Torn Oil Industry Embraces Tax Havens

Alexa Olesen, Michael Hudson
International Consortium of Investigative Journalists
“If there’s a problem you can just close the company, walk away and deny you ever had anything to do with it.”

Report Links Chinese Elite to Offshore Tax Havens

Joe McDonald
Associated Press
Attention is on President Xi Jinping's family and its wealth at a time when Xi has emphasized fighting corruption...

More Than Half of China’s Most Powerful Officials Have Links to Tax Havens. Now What?

Heather Timmons
Quartz
Relatively loose cencorship of the recent offshore tax reports has some thinking that the CCP is ready to talk. 

ICIJ Offshore Records Reveal Tax Haven Clients in China, Hong Kong

Marina Walker Guevara, Gerard Ryle,...
International Consortium of Investigative Journalists
More than 50 reporting partners in Europe, North America, Asia and other regions investigated 2.5 million leaked files.

How We Did Offshore Leaks China

Marina Walker Guevara
International Consortium of Investigative Journalists
Chinese, European and Western journalists worked together to successfully leak a highly sensitive and secretive story.

China's Princelings Storing Riches in Caribbean Offshore Haven

James Ball, Guardian US Interactive Team
Guardian
The documents also disclose the central role of major Western banks and accountancy firms who acted as middlemen. 

Secrecy for Sale: Inside the Global Offshore Money Maze

Marina Walker Guevara, Gerard Ryle,...
International Consortium of Investigative Journalists
The data illustrates the outsized dependency of China's economy on tiny islands thousands of miles away. ...

China Inflation at Seven-Month High, Limits Room for Easing Despite Export Tumble

Kevin Yao and Xiaoyi Shao
Reuters
China's annual consumer inflation rate rose to a seven-month high of 3.1 percent in September as poor weather drove up food prices, limiting the scope for the central bank to maneuver to support the economy even as exports...

China Locks Foreign Investors Out of Another Bad-Debt Cleanup

Stephen Aldred
Reuters
Foreign investors that specialise in buying up distressed debt are queuing outside the industry's door, but bankers say China's reluctance to pay the price of a privately funded clean-up means that door probably won't open. ...

China’s Coal Supply Will Soon Weigh 40 Percent More Than Earth’s Population

Gwynn Guilford
Atlantic
The country's excessive past investments in coal have produced a surplus, and today, lowered prices mean mining barons are struggling to pay off loans. ...