China | Understanding the recent hot topics on Chinese economy and financial markets

Summary

The report is trying to help to understand the recent important hot topics on Chinese economy and financial markets, including the ongoing regulatory storms, the crucial transformation of China’s industrial policy, the monetary policy independency and the ultimate goal of China’s financial liberalization reform.

Key points

• Key points:
• Why Chinese authorities are pushing forward tightening regulations on several sectors at this post-pandemic time in a bit to advocate common prosperity and equality? Will it create systematic risks for economic growth?
• The PBoC wants to maintain the independence of China’s monetary policy in terms that China would still conduct some easing measures in the rest of the year when the US FED is in the process of QE Tapering. This is quite abnormal among the emerging markets’ central banks. How to solve the potential risks of capital outflows and sharp RMB depreciation?
• How to understand China’s recent industry policy transformation from consumption-oriented to industry-oriented and from following US growth model to Japanese and German model?
• What is the ultimate goal of the RMB exchange rate reform? And what is the ultimate goal of financial liberalization reform?

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