China Economic Watch

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Is the sky really falling for private firms in China?
Chinese authorities are carrying out a sweeping regulatory crackdown on private technology firms this past year, wiping off hundreds of billions of dollars from the market capitalization of some of the largest private companies in China. Some Chinese private entrepreneurs are reportedly avoiding...

Foreign investments into China are accelerating despite global economic tensions and restrictions
Global economic decoupling from China or, as some call it, reshoring, is not happening. Despite economic and financial tensions and a plethora of foreign restrictions on the transfer of technology to China, China continues to attract record amounts both of foreign direct investment and inflows of...

As China's population ages, age discrimination in China's workplace needs to end
China’s latest census data show that its population is aging fast. Nearly one-fifth of the population in 2020 was aged 60 and above, 5.4 percentage points higher than a decade earlier. At the same time, the working-age share of the population, those between 15 and 59, continues to shrink. To...

Rising SOE defaults alarm investors but could benefit the Chinese economy
China’s money-losing but politically powerful state-owned enterprises (SOEs) have long been identified as a drag on the Chinese economy. The latest signal of their troubles is the dramatic rise last year in the number of SOE defaults in China’s onshore bond market. The number of defaulted...

China plays the sanctions game, anticipating a bad US habit
President Donald Trump has been widely criticized by the trade community for using trade measures to achieve political ends. China, in fact, has been implementing such measures for years, even before Trump reached the White House. As the most recent example, on November 28, 2020, China announced...

To become a high-income economy, China needs to invest more on its rural youth
China’s economic growth has astonished the world and vaulted it to the status of an upper-middle-income country. Now the question is whether China can progress to becoming a high-income economy, as South Korea and Taiwan have, for example. Or will it remain stuck like Mexico or Brazil, failing to...

China goes from strength to strength in global trade
China's economy has recovered sharply since the second quarter of 2020, while the rest of the world is still deep in the Great Lockdown Recession. China's economic output grew 0.7 percent in real terms January through September 2020, and it is projected to be the only major economy that will expand...

Chinese SOEs need more female leaders
China has one of the highest rates in the world of women participating in the labor force, but they are competing with men on an unequal footing in the workplace. Chinese women face various forms of workplace discrimination across the board, as is clearly visible in China's state-owned enterprises...

As China recovers from the pandemic, will zombie firms return?
The Chinese economy is on track to achieve 2 to 3 percent growth in 2020, which makes China the only major country expected to expand in the wake of the COVID-19 pandemic. But the recovery comes with a price. The problem of zombie companies that China has been nibbling at for years has become...

Memo to the Biden administration on how to advance economic talks with China
Background: Economic negotiations with China must be a component of a consistent overall strategy to promote US interests, rather than one element of a menu of mutually inconsistent and constantly changing initiatives. The foundation of this strategy should be a comprehensive program of US economic...

Despite the rhetoric, US-China financial decoupling is not happening
The US-China economic confrontation of the last few years has prompted predictions that the world’s two largest economies are headed for a “decoupling.” The Trump administration’s recent threat to delist Chinese companies from US stock exchanges if they fail to comply with US accounting regulations...

Gender discrimination at work is dragging China's growth
A widening gender gap in labor force participation and earnings has accompanied China’s economic achievements since the beginning of Deng Xiaoping’s economic liberalization. A major factor driving this trend has been the loosening of state control over the marketplace, which has given private...

Trumpís latest move on Hong Kong is bluster
If President Trump follows through on his threat to eliminate Hong Kong’s status as a special customs territory with the United States, separate from China, the economic impact on Hong Kong would be minimal and on China even less. Under the terms of the 1992 United States–Hong Kong Policy Act,...

China thinks Macau can replace Hong Kong as an international financial hub
As China moves to impose a national security law on Hong Kong, which has long been China's gateway to international capital and doing business with the rest of the world, a parallel move has been unfolding in Beijing to build up nearby Macau as a replacement international financial center. Macau,...

China's fiscal stimulus is good news, but will it be enough?
The Chinese government unveiled a bigger stimulus package worth at least 4.5 percent of GDP at the outset of the National People’s Congress that began on May 22, after China experienced an unprecedented 6.8 percent year-over-year contraction in its GDP in the first quarter. Rather than repeating...