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SWIFT: 2016 RMB Global Settlement Volume Declined Significantly

Well-known Chinese news site Sina recently reported that SWIFT (Society for Worldwide Interbank Financial Telecommunication) released its official 2016 report which showed global settlements in the Chinese currency RMB declined by 29.5 percent. In 2015, the RMB held a 2.31 percent share in the global settlement volume. In 2016, the Chinese currency saw only a 1.67 percentage share in global settlements. SWIFT especially mentioned that the RMB suffered a sharp decline of 15.08 percent from November 2016 to December 2016, while all other currencies saw a growth of 0.67 percent at the same time. SWIFT Asia Pacific Regional Director Michael Moon suggested that the main cause of the sharp year-end decline was the decline in the Chinese economy, RMB exchange rate fluctuations, and China’s restrictions on capital outflow. In 2016, China just became one of the official currencies that form the IMF (International Monetary Fund) SDR (Special Drawing Rights), which was expected to improve the internationalization of the Chinese currency.

Source: Sina, January 26, 2017

Xinhua: Liaoning Province Admitted Forging Economic Statistics

Xinhua recently reported that Liaoning Province officially admitted faking its official GDP data from 2011 to 2014. The governor of the province, Chen Qiufa, reported the government’s wrong-doing in his formal speech to the provincial congress. The Communist Party’s central inspection team in Liaoning pointed out some related issues in 2014. The Chinese National Audit Office also found similar problems in its 2013 audit report. However, experts expressed the belief that the root cause of the data-forging issue across the nation was the direct and tight association between the GDP numbers and the government officials’ promotion opportunities. The public is looking forward to the follow-up steps of identifying the individuals who performed these illegal activities.

Source: Xinhua, January 18, 2017

Level of China-Owned U.S. Bonds Continues to Drop

Well-known Chinese news site Sina recently reported that China has relinquished the title of the largest U.S. bond owner to Japan for two consecutive months now. China just revealed the official numbers showing that the total capital outflow in 2016 reached US$305.3 billion, which was a record high. Chinese held U.S. bonds are on the decline. As of the end of November 2016, China’s U.S. bond level was US$1.0493 trillion, which was US$66.4 billion less than the end of October. This was the lowest level in six years. Analysts expressed the belief that the cause of China selling U.S. bonds was to defend the Chinese currency, the RMB, which has been suffering rapid depreciation. Since the Chinese government was worried about the potential market disorder resulting from capital outflow as well as currency depreciation, the Chinese authorities have been applying capital outflow controls on the investment level.

Source: Sina, January 20, 2017

People’s Daily: Bringing Manufacturing Back to U.S.? Dream On.

People’s Daily recently published an analysis article evaluating whether there is a chance that manufacturers in China can be attracted to the United States, which is a critical cornerstone of Trump’s strategy. However, capital always seeks low-cost, high-profit destinations. The most profitable industry for the U.S. is the financial industry instead of manufacturing. The last three projects Trump had before he won the presidency resulted in U.S. manufacturers losing at least US$350 million to low-cost Chinese products. Trump’s campaign T-Shirts were made in China and Honduras. Robots can help, but that won’t add more jobs. The U.S. may be able to improve on the high-end manufacturing as a high-tech power, but that won’t significantly improve employment. The article also identified the lack of blue collar labor resources in the U.S. population as a major problem to re-establish manufacturing on a large scale. Manufactures are more likely to move to India, Vietnam, Myanmar, or Cambodia instead of the U.S. Another immediate obstacle the U.S. will face is that the United States no longer has the full supply chain from the natural resource to supporting parts suppliers. The author concluded that Trump was just bragging – the best case is that he could move manufacturers out of China, but not into the U.S.

Source: People’s Daily, December 31, 2016

BBC Chinese: China Will Ban Ivory Trade before the End of 2017

BBC Chinese recently reported that the Chinese government announced it will ban ivory trading before the end of the year 2017. Animal protection organizations recognized this decision as “historic.” The Chinese State Council put in place the regulations for a phased approach to the discontinuation of the sales of ivory-based products as well as the business of manufacturing them. Currently China is the largest ivory market in the world. Seventy percent of the world’s ivory products have China as the intended final destination. The price of ivory In China is US$1,100 per kilogram. In China today 34 companies are authorized ivory manufacturers and 143 are authorized retail stations. A recent study on African elephants showed that, in the last seven years, the elephant population there shrank by one third. Both the World Wildlife Fund (WWF) and the Natural Resources Defense Council (NRDC) indicated that the Chinese decision will make a major contribution to saving elephants, which are an endangered species.

Source: BBC Chinese, December 30, 2016

Mainland Movie Market Sees Sharp Decline in Box Office

Well-known Chinese news site Sina recently reported that the Mainland movie market is suffering a dramatic free-fall. According to the latest statistics, the total box office from April to September saw a ten percent decline year-over-year. The Chinese Mainland commercial movie market has been on a path of rapid growth for many years. It has been one of the fastest growing industries in China. The year-over-year growth rate in 2015 was 50 percent. Many experts expressed the belief earlier that China will beat the United Sates to become the largest movie market in the world and will reach a US$10 billion domestic box office level in 2016. However, the movie industry is now seeing a negative growth rate at the point of only three weeks from the end of the year end. Analysts suggested that the primary reasons for the decline are the significant reduction in discounted tickets, as well as the government’s crack-down on cinemas that forge box office statistics.

Source: Sina, December 14, 2016

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