“If we can stabilise growth, yuan depreciation expectations could be changed”, said an influential economist who advises the government.
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The National Development and Reform Commission will remove a quota system for companies to issue certain worldwide bonds and loans and require only registration rather than applications for such borrowing, it said Wednesday.
The Federal Reserve’s “pending policy normalisation” and the dollar’s strength mean there may not be “many silver linings left for China to count on”, according to the Daiwa report.
Government spending jumped 26 percent in August from a year earlier as Beijing tries to re-energise flagging growth.
“China could be one of the reasons to influence the Fed’s decision, but it is not the most important one”, said Shi in an exclusive interview with China Daily.
Treasury savings by various levels of government hit 4.44 trillion yuan by the end of August, and savings of other government-affiliated institutions (such as universities, hospitals and research institutes) exceeded 20 trillion yuan by the end of June, according to People’s Bank of China. “The administrative measures could ease some capital outflows in the short run”. “After all, companies may be concerned about the rising costs after yuan depreciation”.
China will conduct checks on firms’ foreign exchange buying to prevent speculation and step up a crackdown on illegal cross-border money transactions, an official at the country’s foreign exchange regulator said on Thursday.
The large amount of unspent allocations is linked to the reluctance of officials to splash out large ticket projects during a time when authorities crack down on widespread corruption, supports an argument by some economists that state investment in China has grown too slowly during the first half of this year.
The credibility of Beijing’s economic forecasting could be critical to stemming the outflows, especially as top leaders meet in October to determine the next five-year plan for 2016-2020.
Unsteady global demand and a wobbly Chinese housing market are expected to drag full-year growth to 7 percent in 2015, though many analysts suspect the true figure to be much lower.
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“So is the difficulty”, he added.
