Demystifying China's macroeconomic policy. Sign up for free updates read by the World Bank and J.P. Morgan: https://xitter.cf/t.co/sZ5LRckG8j
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Joined March 2017
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China Banking News retweeted
Literally a physical fight over which Chinese local government could claim a semiconductor joint-venture company.
A semiconductor company located in Wuhan was suddenly relocated to a city in Zhejiang that was also a joint investor. But the official relocation document seemed to have a fake corporate seal. There was some physical altercation over the real corporate seal. Police in both local governments got involved. Now the whole thing is under investigation.
The bigger takeaway is that Chinese local governments really want to get the downstream benefits of these high-tech firms and investment. They're literally willing to get into a fight and bring in the police to settle a dispute.
The Paper: thepaper.cn/newsDetail_forwa…
China Banking News retweeted
Chinese state-owned funds made up 42% of large-scale financing deals for embodied AI, according to this fascinating 36kr piece.
Chinese local governments are desperate to attract leading embodied AI firms that can upgrade their local industries.
These embodied AI firms know this and are savvy about spreading their R&D, production lines, and data centers across different locations to take advantage of resources from different local governments.
Local governments are all rushing into embodied AI because, unlike other tech like quantum or fusion, local governments of different sizes can participate at the level of robots or robotic components. And so they can still fulfill their mandate of building up capacity in "hard tech."
Local governments don't care about short-term valuations. They want "industrial value" from these embodied AI firms.
Full piece: 36kr.com/p/4036882782573449
China Banking News retweeted
a̶n̶ ̶i̶d̶e̶a̶ the cross-currency basis is like a virus. resilient. highly contagious. and even the smallest basis i̶d̶e̶a̶ can grow to define or destroy you
i̶n̶c̶e̶p̶t̶i̶o̶n̶ ̶ cross currency basis primer i̶n̶ ̶c̶i̶n̶e̶m̶a̶s̶ on Conk's Substack, October 31st
China Banking News retweeted
I recently completed a trip to four central banks in Europe and learned a lot from them. Here is my write up of this amazing opportunity I had to learn from others. (1/2) macroeconomicpolicynexus.sub… @RobinWigg @robin_j_brooks @ChrisGiles_ @MaryDalyEcon @Austan_Goolsbee @paulwinfree @annap_2013
Such cases are not unheard of in the fields of esoteric Sinology.
There was a chap at Oxford who came up in the 80s to research the 4 year tenure of a Yorkshire bishop. He spent 40 years on it, draining an inheritance left on condition it was spent on his education. Daily Mass (sometimes several times a day), lobster every day at Brown's next to the Oratory (hence the gout), magnificent dinner parties for miscreants, oddballs and grad students, and generous to charity. His fingers were so fat that his signet rings appeared stuck to them. Having spent every last penny, he was evicted from his apartment and became a monk some 3 years ago. No wife, no kids, and I don't think the DPhil ever got finished.
Top 5 most eccentric human beings I’ve met in my life. Bless him.
China Banking News retweeted
There was a chap at Oxford who came up in the 80s to research the 4 year tenure of a Yorkshire bishop. He spent 40 years on it, draining an inheritance left on condition it was spent on his education. Daily Mass (sometimes several times a day), lobster every day at Brown's next to the Oratory (hence the gout), magnificent dinner parties for miscreants, oddballs and grad students, and generous to charity. His fingers were so fat that his signet rings appeared stuck to them. Having spent every last penny, he was evicted from his apartment and became a monk some 3 years ago. No wife, no kids, and I don't think the DPhil ever got finished.
Top 5 most eccentric human beings I’ve met in my life. Bless him.
China Banking News retweeted
Highly relevant!
"Lighting the shadows: central bank policy transmission through banks and non-banks" by Nicolò Bandera, Kristina Bluwstein, Michael Kumhof, Mauricio Salgado-Moreno, and Jacob Stevens.
"Non-bank financial institutions (NBFIs) account for an increasingly large share of credit provision and play a central role in quantitative easing (QE). We develop a DSGE model with banks, NBFIs and a central bank interacting through wholesale deposits, bonds and reserve markets to study how monetary transmission changes as the size of NBFIs expands. We estimate the model on UK data to evaluate key parameters in the financial sector. We find that the transmission of conventional interest rate policy to output and inflation is essentially unaffected by the size of the NBFI sector. Conversely, the transmission of QE is strongly altered by the size of the NBFI sector and the source of its expansion. When the NBFI sector expands due to firm funding preferences, this amplifies QE. When it expands due to an increased cost of obtaining bank finance, transmission is largely unchanged. The results underscore that monetary policymakers retain rate control regardless of financial structure, but that the effectiveness of balance sheet policies depends on the composition and behaviour of the non-bank sector."
bankofengland.co.uk/working-…
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Important👇
A wave of fund withdrawals can force bond sales, which can trigger yet more withdrawals. Beijing is preparing a new central-bank backstop to break that cycle.
It is also weighing an overnight policy rate and opening onshore FX trading to more offshore RMB banks.
The 2026 Financial Street Forum put wider market access and safeguards against financial stress on the same agenda.
source: buff.ly/h3ObzuI
This does look good.
Thought-provoking, perhaps controversial, and certainly worth reading!
"The Fiscal Fed: How the US Central Bank Funds Government" by Will Bateman.
link.amazon/B0hxhFjYG
"Bateman combs Fed meeting transcripts, staff notes, financial accounts, and legal documents to trace loans and public-debt purchases since the central bank’s founding. The result is a milestone work that reveals how, for most of the Fed’s history, its transactions were aimed at government financing—either by providing cheap credit to close budget gaps or by manipulating yields on government debt. The Fed’s support for government finance is a feature, not a bug, of American economic institutions."
Éric Monnet: "A revelatory counter-history of the central bank and its independence. The Fiscal Fed is essential."
link.amazon/B0hxhFjYG
China Banking News retweeted
The National Data Group 国家数据集团 puts the state at the centre of the PRC’s data economy. Unlike US tech platforms, which hold vast private data stores, it could link data across provinces and industries, widening access for firms and AI. Can it make data pay?
Our earlier coverage: buff.ly/YWuMhXi
#PRC #ChinaPolicy #NationalDataGroup #DataEconomy #DataGovernance #StateOwnedEnterprises #DataInfrastructure #DataMarkets #ArtificialIntelligence #DigitalEconomy
China Banking News retweeted
Highly relevant!
"The heterogeneous bank lending channel of monetary policy" by Jorge Abad, Saki Bigio, Salomon Garcia-Villegas, Joël Marbet, and Galo Nuño.
"How does heterogeneity in banks’ interest-rate risk exposure shape monetary policy transmission? We develop a quantitative macroeconomic model of heterogeneous banks to answer this question. We establish an irrelevance result: differences in interest-rate risk exposure between fixed- and variable-rate banking systems matter for transmission only when bank solvency concerns become relevant. Calibrating the model to the euro area, we show that idiosyncratic default risk pushes a substantial share of banks toward the solvency threshold, making heterogeneity quantitatively important. When policy rates rise, fixed-rate banks suffer net interest margin compression—funding costs increase while legacy loan income stays unchanged—eroding capital and triggering sharper deleveraging. The lending elasticity to monetary policy is one-third larger in fixed-rate economies. The effects extend to financial stability: tightening raises bank failure rates in fixed-rate systems while lowering them in variable-rate systems. The results provide a rationale for macroprudential and monetary policy coordination and for monetary policy gradualism."
ecb.europa.eu/pub/pdf/scpwps…
China Banking News retweeted
Who answers when a car drives itself in the PRC? A draft law puts manufacturers and importers first in line when automated vehicles break traffic rules. National standards and local approvals shape what reaches the road. Our explainer maps the rules.
source: buff.ly/innrh2c
#PRC #AutonomousVehicles #AutomatedDriving #RoadSafety #TrafficLaw #VehicleRegulation #AutomotiveIndustry #SafetyStandards #ChinaPolicy
China Banking News retweeted
Nice article on Perry by @s1moncox @TheEconomist
The late Perry Mehrling explained the hierarchy of money
economist.com/finance-and-ec…
from The Economist
China Banking News retweeted
I just finished Yoichi Funabashi's very detailed history of the events and negotiations surrounding the Plaza Accord and the subsequent Louvre Accord. What is especially interesting is that this was published in 1988, at the peak of the Japanese economic boom and at a time when its economy was growing by well over 5%. There is no discussion of debt and no hint of what was to happen over the next two decades.
China Banking News retweeted
Thiel n'est rien de plus qu'un autre asset manager mis en place par les grandes fortunes anonymes de ce monde, celles qui par prudence et sagesse préfèrent l'anonymat au classement Fortune500, et laissent volontiers le titre de "génie" sorti de son garage à ces types qui sont le Hollywood 2.0, la nouvelle manufacture semi-automatisée du consentement.
J'ai écrit il y a quelques temps un article sur ce nouveau star-system pensé pour remplacer Hollywood :
open.substack.com/pub/lauren…
Peter Thiel n'est pas un clown médiatique.
C'est un homme qui lit Girard, Carl Schmitt et Tolkien. Après avoir acquis la conviction que la démocratie libérale s'effondrait, il a placé ses pions en conséquence : Palantir pour la surveillance, Founders Fund (17md$ d'actifs sous gestion) pour la guerre technologique, Vance pour le pouvoir politique.
Il construit des villes autonomes au Honduras, cherche des terrains en Patagonie, et théorise le katechon, ce qui contient l'antéchrist, comme cadre pour penser la régulation de l'IA.
C'est sans doute terrifiant, mais bien moins que le VIDE axiologique que la Vieille Europe, irrespectueusment assise sur son propre héritage, se montre capable de lui opposer.
elpais.com/ideas/2026-10-18/…
Reading through a hundred page outline of the ongoing evolution of the China's monetary policy system under PBOC governor Pan Gongsheng, published by state-owned investment bank Guosen Securities.
About a tenth of it is dedicated to Modern Monetary Theory, and its relevance to the coordination of monetary and fiscal policy in both China and the rest of the world in the wake of the Covid pandemic.
@StephanieKelton
@billy_blog
@wbmosler
@mikenorman
@MMTpodcast
China Banking News retweeted
Food for thought!
"Liquidity, Government Bonds, and Sovereign Debt Crises" by Francesco Molteni.
"This paper studies the Eurozone sovereign debt crisis through the lens of funding liquidity in government bonds. Using newly collected data on repo haircuts from LCH Clearnet Ltd, the paper identifies liquidity shocks with a high-frequency structural VAR, separately from sovereign risk shocks, and shows that reductions in funding liquidity substantially increased yields on peripheral government bonds. To explain these effects, a general equilibrium model with financial frictions reproduces the empirical dynamics of a liquidity shock, capturing the rise in bond returns, the flight-to-liquidity, and the contraction in aggregate activity during the crisis. The model further highlights how liquidity and sovereign risk interact, generating a feedback loop that amplifies market stress. Evidence from the COVID-19 pandemic, including ECB haircut reductions, corroborates the role of this funding liquidity channel."
papers.ssrn.com/sol3/papers.…
China Banking News retweeted
Investing in securities requires extraordinary trust that complete strangers will use your money in your interest with integrity and the obligations stated in the issuing prospectus will be performed.
Securities are not physical goods or tangible wealth but insubstantial legal claims—pieces of paper or digital entries that merely entitle their holders to streams of interest, principal repayments, or dividends from an issuer. Their entire value depends on the credible promise that these claims will be honored, which in turn requires trust in the rule of law, independent courts, and the consistent protection of property rights. Absent a political and legal order that reliably enforces contracts and prevents fraud and arbitrary expropriation, such claims collapse into worthless abstractions, revealing that modern capital markets are sustained less by the securities themselves than by the legal and institutional framework that makes them enforceable.
A century of globalising securities markets is at risk if legal protections and assurances no longer hold because managers would rather defraud and politicians would rather steal than uphold basic principles of securities law.
Markets fail when return OF your money becomes a bigger worry than the return ON your money.
I used to supervise Euroclear and Clearstream so this @FT story caught my attention. @MESandbu suggests Euroclear is too big to destabilise and Belgium is to small to bear the risks of $360 billion restoration costs if ever the Central Bank of the Russian Federation succeeds in regaining rights to frozen or expropriated assets - which it will regain in any settlement of the Ukraine war.
What he fails to address entirely is Rule of Law and Private Property Rights. Sure these are inconvenient to thieves, but they are essential to global securities markets. Securities are called securities because they convey secure property interests and claims to their owners at law.
What will destabilise Euroclear is global perception that $44 TRILLION in securities assets under custody are now UNSAFE because the EU can decide to steal them.
Also, it’s irritating to see him suggest ECB can force Euroclear ‘to split off the risky part of its balance sheet into a separate entity’. That is just another form of theft.
Euroclear is licensed as a bank, but its core business in its charter and under specific Belgian legislation is as a fiduciary or trustee of OTHER PEOPLES’ ASSETS. Because it is so central to European and global markets, it is forbidden to take normal commercial risks. Fiduciary, custodian, and trust assets under Euroclear custody are NOT on Euroclear’s balance sheet because 100% ownership remains with the depositors. Even if Euroclear goes bust, customer assets will NOT form any part of the insolvency estate and can be reclaimed by depositors.
I designed and modernised the laws protecting Euroclear and Clearstream depositors. I pray they withstand these lawless attacks by would-be thieves.
Break Rule of Law and Property Rights and you break global securities markets.
China Banking News retweeted
Wide income gaps constrain demand, argues Jiang Xiaojuan 江小涓. Local tax breaks for high earners pull against common prosperity. Her case for inclusive reform is worth reading. A veteran policymaker and economist, she is a voice we track closely.
Read our context note and summary: buff.ly/JbRxXDT
original article: buff.ly/zptAcOD
#JiangXiaojuan #PRCEconomy #EconomicReform #CommonProsperity #IncomeDistribution #Consumption
