Posts tagged ‘Chinese yuan’

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07/03/2014

BBC News – Chaori Solar in landmark Chinese bond default

Solar panel maker Shanghai Chaori Solar Energy Science & Technology has defaulted on interest payments owed on its bond, say media reports quoting the firm.

Solar panels

It is the first Chinese firm ever to default on its onshore corporate bonds.

On Tuesday, the firm warned it would be unable to make a 89.8 million yuan ($14.6m; £8.7m) interest payment on a one billion yuan bond issued in 2012.

The default is seen as a test case for the Chinese government.

Investors have assumed in the past that the Chinese government would bail out any Chinese corporation in danger of defaulting.

The move to allow Chaori to default signals a new stance.

“There’s never been a corporate bond default, [so] investors have been conditioned that there is no such thing as risk in China,” Leland Miller, president of research firm China Beige Book, told the BBC.

“The Chinese leadership is trying to break down this misunderstanding that everything is backstopped.”

Chaori Solar said it planned to pay 4 million yuan ($654,000) of the interest payment due on the billion yuan bond, which was taken out two years ago.

via BBC News – Chaori Solar in landmark Chinese bond default.

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25/02/2014

Stocks scale peaks, yuan drops most in three years | Reuters

World shares were at a 6-year high on Tuesday following a record peak on Wall Street, while moves by China to stamp out easy betting on the yuan triggered the currency’s biggest drop in over three years.

An office worker walks past the board of the Australian Securities Exchange building displaying its logo in central Sydney April 5, 2013. REUTERS-Daniel Munoz

The upbeat mood among equity investors in the United States as well as Europe helped steady markets in China after the sharp plunge in the yuan and talk of credit tightening had seen stocks in Beijing suffer their biggest drop since September. .SSEC.

Spot yuan has entered a dramatic weakening cycle in recent weeks, guided by a series of moves by the central bank, with the unwinding of yuan positions by banks and funds adding downward momentum.

China allows the yuan to move 1 percent above or below a midpoint set daily but traders believe the recent depreciation is intended to set the stage for a widening of that band to 2 percent or more this year to make it more free moving.

via Stocks scale peaks, yuan drops most in three years | Reuters.

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20/02/2014

China, UK discuss setting up yuan clearing bank in London – Osborne | Reuters

The British and Chinese governments are in active discussions about setting up a clearing bank in London for China’s currency, a milestone that will put the city in a leading position to offer yuan trade business in Europe.

British Chancellor of the Exchequer George Osborne listens to a question after his speech during a breakfast meeting held by the British Chamber of Commerce in Hong Kong February 20, 2014. REUTERS/Bobby Yip

Taking a leaf out of Hong Kong’s blueprint in being the leading offshore yuan hub after the establishment of Bank of China (Hong Kong) as a clearing bank, the authorities are pressing ahead with having one for the city of London.

The move will help expand the Chinese currency‘s footprint beyond Hong Kong, where more than 80 percent of yuan trade settlement transactions are handled and foster greater confidence among European companies to adopt the yuan, also known as the renminbi, as a currency for trade.

“The UK and Chinese governments are in active discussions now about the appointment of a RMB clearing bank in London, recognising London’s role as the Western centre of offshore RMB

via China, UK discuss setting up yuan clearing bank in London – Osborne | Reuters.

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03/12/2013

China’s yuan surpasses euro as 2nd most-used currency in trade finance: SWIFT | Reuters

China\’s yuan currency overtook the euro in October, becoming the second-most used currency in trade finance, global transaction services organization SWIFT said on Tuesday.

100 Yuan notes are seen in this illustration picture in Beijing November 5, 2013. REUTERS/Jason Lee

The market share of yuan usage in trade finance, or Letters of Credit and Collection, grew to 8.66 percent in October 2013. That improved from 1.89 percent in January 2012.

The yuan, also known as the renminbi, now ranks behind the U.S. dollar, which remains the leading currency with a share of 81.08 percent.

The top five countries using the yuan for trade finance in October were China, Hong Kong, Singapore, Germany and Australia, SWIFT said in a statement.

\”The RMB is clearly a top currency for trade finance globally and even more so in Asia,\” Franck de Praetere, SWIFT\’s Asia Pacific head of payments and trade markets said.

The RMB remained the 12th payments currency of the world, with a slightly decreased share of 0.84 percent compared with 0.86 percent in September.

RMB payments increased in value by 1.5 percent in October, while growth for all payments currencies was at 4.6 percent.

The world\’s second-largest economy is accelerating the pace of financial reform to promote its currency to international players beyond Hong Kong. China aims to lift the yuan\’s global clout and reduce its reliance on the U.S. dollar.

via China’s yuan surpasses euro as 2nd most-used currency in trade finance: SWIFT | Reuters.

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30/07/2013

China urbanization cost could top $106 billion a year: think-tank

Reuters: “The cost of settling China’s rural workers into city life in the government’s urbanization drive could be about 650 billion yuan ($106 billion) a year, the equivalent of 5.5 percent of fiscal revenue last year, a government think-tank said on Tuesday.

A man rides an escalator near Shanghai Tower (R, under construction), Jin Mao Tower (C) and the Shanghai World Financial Center (L) at the Pudong financial district in Shanghai July 4, 2013. REUTERS/Carlos Barria

The figure is based on the assumption that 25 million people a year settle in cities, with the government spending the money on making sure they enjoy the same benefits in healthcare, housing and schools that city residents have, the Chinese Academy of Social Sciences(CASS) said.

“I think the biggest obstacle for turning rural migrant workers into urban citizens is the cost issue,” Wei Houkai, a researcher at CASS, told a news conference, adding that to achieve equality of treatment could take until 2025.

Millions of migrant workers from the countryside and smaller towns work in China’s big cities, often in low-paid manual work, but lack access to education, health and other services tied to the country’s strict household registration – or hukou – system.

China sees the urbanization drive as pushing domestic consumption, which it wants to make the main engine of growth for the economy, replacing exports and manufacturing and investment.

Rural migrant laborers only earned an average 2,049 yuan a month in 2011, or 59 percent of average urban workers’ salary, CASS added.

But they need to pay about 18,000 yuan annually per capita to be able to live in cities and another 100,000 yuan on average for housing, it said.”

via China urbanization cost could top $106 billion a year: think-tank | Reuters.

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24/04/2013

* Australia’s central bank to invest in Chinese bonds

BBC: “Australia’s central bank is planning to invest around 5% of its foreign currency reserves in Chinese government bonds, its deputy governor has said.

China's President Xi Jinping shakes hands with Australia's Prime Minister Julia Gillard

It will be the first time the Reserve Bank of Australia (RBA) will invest in sovereign bonds of an Asian country other than Japan.

The RBA has foreign currency reserves of A$38.2bn ($39.2bn; £25.7bn).

Earlier this month, the Australian dollar became the third currency to trade directly with the Chinese yuan.

“This decision to invest in China is an important one,” Philip Lowe, deputy governor of the RBA said in a speech to the Australian Chamber of Commerce in Shanghai.

“It reflects the broader economic relationship between China and Australia and our increasing financial ties.

“It provides greater diversification of our investments and will help with our understanding of the Chinese financial markets,” he added.”

via BBC News – Australia’s central bank to invest in Chinese bonds.

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19/04/2013

* Govt vows to further curb public spending

China Daily: “China’s central government has pledged to slash 126 million yuan ($20.38 million) from its spending on public-funded vehicles, receptions and overseas trips this year, a move that experts said lives up to the new leadership’s promise to be frugal.

Departments under the central government and organizations that receive public funds are planning to spend 7.97 billion yuan this year to buy and use cars, travel overseas and host meetings — collectively known as “the three public expenses” — the Ministry of Finance said on Thursday.

Spending on public receptions, which decreased 64 million yuan, or 4.3 percent year-on-year, will drop the most among the three.

Although laws require central government departments to release their budgets in 20 working days after authorities approve them, it is the first time that these departments included the three public expenses in the disclosure. Previously, the amount of public spending was usually withheld until July, when departments released their final figures from the previous year.

Experts said the budget cuts have echoed the pledge of the central leadership, which has made cutting red tape and reducing the number of ceremonies one of its priorities since its election.

China’s new premier, Li Keqiang, has promised that public spending in the Cabinet will only go down — one of the three commitments he made in his first news conference as premier in March.

Before that, the new leadership of the Communist Party of China called upon officials in December to adhere to the “eight disciplines”, which asks the governments to cut pomp, ceremonies, and bureaucratic visits and meetings.

Ye Qing, deputy director of the Hunan provincial Statistics Bureau, said the central government has made progress in slashing the three public expenses, although spending is still high and needs further reduction.

Specifically, the authorities have earmarked nearly 4.4 billion yuan — about 55.2 percent of the budget — for buying and maintaining vehicles, while the amount for overseas trips is 2.1 billion yuan, and about 1.4 billion yuan for public receptions.

“It is astonishing that officials spend nearly 4.4 billion yuan on using cars each year. Reform of car use is imminent,” Ye said.”

via Govt vows to further curb public spending |Politics |chinadaily.com.cn.

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11/03/2013

* Yuan Flows a More Freely as China Relaxes Controls

WSJ: “The use of China’s yuan abroad is rising as Beijing slowly loosens its grip and allows a wider group of investors to buy the nation’s currency, stocks and bonds.

The offshore yuan in Hong Kong, where the currency is freely traded, is near the highest in a month partly because investors are taking advantage of a slight relaxation in rules on its capital markets. Last week, Beijing allowed Hong Kong units of Chinese banks and insurers, as well as Hong Kong-registered financial institutions, to invest in China’s stocks and bonds for the first time with yuan raised offshore.”

via Yuan Flows a More Freely as China Relaxes Controls – WSJ.com.

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13/11/2012

* Yuan to surpass Dollar

Inevitably the US dollar will gradually be on a par with the Chinese yuan. And then several decades down the line, it will be relegated to second place.

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15/06/2012

* Deutsche Bank Makes Cross-Border Yuan Payment Under New China Central Bank Scheme

WSJ: “A pilot scheme intended to make it easier for companies to settle trade in the Chinese yuan officially kicked off Friday, with Deutsche Bank AG completing the first cross-border yuan payment transaction under the program.

The new program, launched by the Shanghai branch of the People’s Bank of China on a trial basis, aims to streamline the process for settling cross-border trade in the yuan by exempting qualified companies from submitting original trade documentation to support each payment. Information on the program has recently been circulated among banks in Shanghai, bankers said, though the central bank hasn’t yet made a public announcement on the initiative.

Deutsche Bank, one of the largest providers of liquidity to currency markets, executed the transaction on behalf of the China subsidiary of Huettenes-Albertus, a German manufacturer of foundry chemical products, under which the company paid a foreign supplier in yuan.

“In the past, settling trade in yuan has been both time-consuming and labor intensive,” said Beng-Hong Lee, Deutsche Bank’s head of foreign-exchange trading in China. “This is a big leap forward.”

The new scheme currently is limited to companies and banks operating in Shanghai. It follows the PBOC’s move in March, when the central bank expanded the use of yuan in trade settlement to exporters and importers across the country.

As China pushes ahead with its drive to spread global use of its currency, many analysts expect the yuan to account for a bigger share of international trade settlement. Beijing started to allow cross-border trade to be invoiced and paid for in its currency about three years ago, and since then, yuan-settled trade has grown to about 10% of China’s total trade. Some analysts have predicted that figure to grow to 3.7 trillion yuan ($587 billion) this year, or 15% of China’s total trade.”

via Deutsche Bank Makes Cross-Border Yuan Payment Under New China Central Bank Scheme – WSJ.com.

Another step in freeing the world economy from US $ domination.

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