The Fall of Zhou Yongkang: How Graft Fight Can Inspire Other Countries

The Communist Party of China has placed former public security chief Zhou Yongkang under investigation for suspected “serious disciplinary violation”, a term that usually refers to corruption. But what does Zhou’s fall mean? Before his last post, Zhou had a long career in the oil industry. In 1996, he became the chief of petro-behemoth China […]

China’s Outward FDI

According to the United Nations Conference on Trade and Development’s latest World Investment Report Overview 2014, foreign direct investment (FDI) inflows to China reached $124 billion last year, while outflows rose to $101 billion. The Report anticipates that outflows will surpass inflows within the next few years, changing China from a net recipient of FDI to a net supplier. […]

Who’s the Big Spender? Military Spending from Beijing to the Pentagon

According to the Pentagon, the rapid growth of China’s military spending reflects its increasing assertiveness in the region. According to Beijing, US military spending is the real issue. What are the facts? It has become an annual ritual. Recently, the US Department of Defense (DoD) usually released its report to Congress on China’s “military and […]

How Sri Lanka Dodged Turmoil in EMs Between Washington’s Human Rights and China’s Free Trade

While several emerging and frontier markets have suffered from turmoil amid the Federal Reserve’s tapering, Sri Lanka has not. Why?  Today, many emerging markets continue to reel from the outflow of foreign capital. Sri Lanka is not among these countries – not because it listened to the International Monetary Fund (IMF), but because it did […]

China’s Trilemma Maneuvers

China’s exchange rate, which had been appreciating against the dollar since 2005, has fallen in value since February. U.S. officials, worried about the impact of the weaker renminbi upon U.S.-China trade flows, have expressed their concern. But the new exchange rate policy most likely reflects an attempt by the Chinese authorities to curb the inflows of short-run capital […]

Chinese Living Standards, International Perspective: The World Bank’s PPP Debate

Emerging economies are catching up with advanced economies, but differences of living standards remain far apart. A new report by the World Bank’s International Comparison Program (ICP) suggests that the purchasing power of China’s renminbi is significantly stronger than exchange rates indicate, based on 2011 prices. Measured by its currency’s purchasing power, the report concludes […]

The Growing Pains of the Chinese Yuan

The recent volatility of the yuan does not herald its weakening, but the increasing opening of the currency and still another milestone in its international ascent. After a sharp depreciation of the renminbi since the beginning of 2014, the US, in early April, warned Beijing not to manipulate its currency, ahead of IMF, World Bank and G20 […]

China’s Debt Endgames

Quick And Slow Deaths… Understandably, the major focus now is on the denouement of the crisis. Pessimists are concerned about a catastrophic crash. Optimists are more sanguine, expecting a soft landing with gradual reforms correcting the systemic issues. The crash scenario is predicated on continuing increases in debt levels and over-investment. Policy adjustments are fatally […]

China’s Shadow Banking System

Chinese debt concerns are complicated by two structural issues – the rise in borrowing by local governments and the increase in the role of the shadow banking system. Both sectors are testament to Chinese entrepreneurial spirit, but also point to deep problems in China’s financial system. Local But National… Outside of security matters or foreign […]