China's "Hot Money"

Why is this chart important? Well, China may now be sitting on a inflationary macro cycle about to get out of control.

The Financial Times has reported that China’s central bank reported that companies and individuals sold Rmb 684 billion ($109 billion) worth of foreign exchange and bought an equivalent amount of Chinese currency in January 2013 --- a record for a single month.

China warns over currency wars

via Financial Times:

China warns over fresh currency tensions 

Competitive devaluations will hurt emerging nations, says Beijing

China backs away from the Euro poker table

From Reuters:

"China would be interested in buying into a Eurobond backed by core euro zone countries and considers investment in bonds issued by heavily indebted European countries unrealistic, a senior official with China's $480 billion sovereign wealth fund said. Jin Liqun, chairman of the supervisory board of the China Investment Corporation (CIC), said until fundamental problems of fiscal, social and monetary policies in euro zone countries burdened by debt are solved, there could be no investment."

Chinese yuan appreciates in the currency markets

The Chinese yuan climbed to a 19-year high this week on currency speculation in the FX markets.

The financial market bet is that China will step up and come to the aid of slumping domestic macroeconomic growth with a new stimulus program.

China's economy contracts, expands

The HSBC's China Flash Manufacturing PMI reported a ninth month of contraction; yet at the same time the Manufacturing Output index generated a nine-month high in reported macroeconomic data.

China will not relax property control policies

BEIJING -- China will continue to maintain a firm grip of its real estate market and consolidate previous achievements in bringing down home prices so as to prevent them from rebounding, according to an urgent government notice released Thursday.

"Local authorities must strictly implement the nation's property control policies. They should not relax the control and relevant requirements unauthorized," according to the notice.

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China's railroad macroeconomic model

China’s railway infrastructure investment may double in the second half of this year from the first six months, aiding efforts to reverse a slowdown in the world’s second-biggest economy.

Full-year spending will be 448.3 billion yuan ($70.3 billion), according to a statement dated July 6 on the website of the National Development and Reform Commission’s Anhui branch. The document indicates a 9 percent increase from a previous plan of 411.3 billion yuan. Spending was 148.7 billion yuan in the first half.

Bloomberg

China's economic growth is slowing

(Reuters) - China's annual economic growth could fall below 7 percent in the second quarter if weak activity persists in June, an influential government adviser was quoted on Wednesday as saying.


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China surprises with an interest rate cut

The People's Bank of China (the central bank in China) cut the official one-year borrowing rate by 25 basis points to 6.31 percent and the one-year deposit rate to 3.25 percent.

Concern about slowing growth in China and other global macroeconomic events promoted the surprise announcement. This was the first cut since 2008.

WSJ: China Freezes Lending to Curb Investing Frenzy

China Freezes Lending to Curb Investing Frenzy
WSJ | JAMES T. AREDDY

Chinese authorities are slamming the brakes on bank lending, in their latest attempt to curb the runaway investment threatening to overheat what is soon to be the world's third-largest economy.

In recent weeks, regulators have quietly ordered China's commercial banks to freeze lending through the end of the year, according to bankers in several cities. The bankers say that to comply, they are canceling loans and credit lines with businesses and individuals.

A China Banking Regulatory Commission official here confirmed that local and Chinese subsidiaries of foreign banks have been asked to ensure that loans at the end of the year don't exceed the total outstanding on Oct. 31. The official described the request as "guidance aimed at supporting the macro-control measures being implemented."