When the IMF said late last month it would review to consider adding China's RMB into its Special Drawing Rights basket it became pretty clear we have reached another inflexion point in China's currency story.
China’s strategic currency goals are no secret – and other ASEAN nations stand to benefit.
Barely had anxieties over a collapse on Chinese share markets began to ease and stress levels were heightened again with the formal intervention to lower the RMB, followed by a market sell-off.
Delivering his opening remarks to the second Australia-Hong Kong RMB Trade and Investment Dialogue, Hong Kong Monetary Authority chief executive Norman Chan outlined the enormous growth in usage of the Chinese currency internationally since the first tentative openings just three years ago.
The International Monetary Fund is now conducting a review to consider including the RMB in the basket of Special Drawing Right (SDR) currencies and will make a final decision at the end of the year.
In an upcoming special report The Renminbi Takes Centre Stage, ANZ will provide insights on the evolution of the RMB into an international trading currency. In a special preview, exclusively on BlueNotes, the infographic below demonstrates the RMB journey so far.
I have many conversations about the renminbi (RMB) yet I almost never walk away without some new insight, perspective or appreciation of the opportunity emerging as China liberalises its currency and financial markets.
We run through the key themes to emerge from the RMB Global Cities Dialogue event.
China’s central bank, the People’s Bank of China (PBoC) surprised market by announcing it would use a daily fixing rate method to devalue the Yuan (the Renminbi or RMB). This was an historic decision as it signals a possible shift in short-term economic and financial dynamics across the world economy.
Unsettling economic data, an equities meltdown, now intervention in the Chinese currency market by the central bank. Signs China is stepping back from financial liberalisation?
It now appears inevitable China's currency the renminbi (RMB) will be included in the International Monetary Fund's (IMF) Special Drawing Rights (SDR) basket when the IMF Executive Board meets next week.
The ructions in China have inevitably shifted thinking around the role of China's currency, the renminbi (RMB). While China's stated long term aim is opening up its economy and internationalising the RMB, market turmoil and growth concerns have created new uncertainty.
The Chinese central bank's recent actions have sent a strong message to those looking to short sell the Chinese currency: don't.
The Chinese central bank's surprise decision to fix the Renminbi (RMB) below its last closing price serves as a statement on softening monetary policy which will place more pressure on the country's already heavily sold equity market.
China's decision to devalue the renminbi (RMB) in late 2015 has led to a significant change in the way the country views itself economically and the broader outlook for the direction of its currency. Having just returned from China and a series of meetings with investors, corporates, regulators and commentators, I noted a stark shift in attitudes compared with my last visit six months ago.
China's below forecast (but still impressive) gross domestic product figures are unlikely to still beating hearts in China which will continue to see heightened levels of market anxiety caused by RMB depreciation, capital flight and equity volatility.
China’s renminbi (RMB) has become increasingly important to the world’s trade flows as country’s economy grows in global influence. That importance will only expand, especially in the wake of the decision out of China’s State Administration of Foreign Exchange (SAFE) to allow foreign investors to trade onshore cash bonds without limitation.
Move over dollar, euro, pound and yen, there is a new player in town flexing its muscle and keen to dominate global currency flows. That at least was the plan of the Chinese authorities when it comes to internationalising its currency, the renminbi (RMB), for the best part of the last decade.
Escalating RMB volatility, mismanaged equity market reforms causing gyrations in local and global asset prices - 2016 began with Chinese governance squarely in the spotlight.
As global interest rates crater and COVID-19 recessions metastasise, central banks are being forced to re-evaluate their role in currency and money creation.
China's economic landscape is changing as traditionally frantic sectors lose pace while others speed into a 'new normal' era. The cyclical decline of property investment continues to drag on overall growth but our forecasts suggest a V-shaped rebound is on the way.
Japan's startling move to negative interest rates over the weekend again focusses attention on the limitations of monetary policy in combating an economic downturn.
There is a saying that good things come to those that wait. The free trade agreement between Australia and China, ten years in the making, has been well worth the wait.
ANZ CEO Mike Smith has welcomed the signing of a free trade agreement between Australia and China, saying the deal will provide a boost to economic growth in both countries.
Australia’s first renminbi trading hub will be the country’s ticket to increased global network connectivity and go beyond improving our trading relationship with China.
In a bold move, the PBoC has today extended a pilot program on foreign currency deposit rates from Shanghai's Free Trade Zone (FTZ) to the whole of Shanghai.
Chinese officials in Shanghai, the largest city in the world’s rising financial behemoth, have made no secret their desire for the region to become a global trading hub. Shanghai has a stated goal of becoming a major global centre for finance, commodity trading and shipping by 2020. A key part of its answer to this has been the Shanghai Free Trade Zone.
Regulation seems to have become the panacea of all financial ills. Banks, insurance companies and financial markets are grappling with the huge financial and operational costs of complying with rules designed to prevent or mitigate the impact of another global financial crisis.
Growth in wealth in Asia will outstrip all other regions. In fact Asia (excluding Japan) will experience the highest growth in global individual wealth, which is expected to grow by between $45 and $50 trillion by 2017 - that is 11 per cent compound growth on 2011.
Disney's "Star Wars: The Force Awakens" premieres in China, the world's second-largest movie market, this weekend and I'll be keeping a close eye on ticket sales.
Not all risks are obvious. Some genuinely cannot be foreseen but others are missed because of outdated information, the wrong source of data, poor judgement or inconsistent processes.
ANZ’s Chinatown branch in Sydney’s George St is one of its busiest with a very high proportion of Chinese and Chinese-speaking customers. They love Alibaba’s e-commerce app Taobao and branch manager Peter Cai spent time speaking with customers – and staff – about just why Taobao has become the world’s most popular mobile shopping site.
Just on a year ago, China made a historic move towards a (theoretically) more market-determined exchange rate by changing the way its daily midpoint fixing of the yuan was calculated.
Does China have a bad debt problem? Well, corporate debt levels in the country have risen and are higher than the global average. But it’s not quite as simple as that, with some factors unique to China which should be considered.
Internet finance may be a new development in China but its impact is now everywhere.
China’s bad and doubtful debts are growing and it is a concern.
Many multinational corporations look to set up their regional treasuries – the nerve centre of where they manage their finances – in one of Asia’s financial centres. But which one best suits the needs of business?
As China’s economy transitions towards a focus on consumption, credit risk remains a problem – and one that is only getting bigger.
The boom times are over for corporate treasurers in Australia. After a decade of relative ease, there is now a heavy focus on cost management and efficiency as the economy shifts. Meanwhile, the global nature of business is increasing the importance of an international perspective, especially when it comes to Asia.
ANZ chief executive Shayne Elliott is in Beijing for the Australia-China CEO Roundtable and Australia Week in China. He believes reform of the financial system is essential for China’s continued development and this is an edited transcript of a speech he gave on the subject.
Similar to many of my peers – if I haven’t been dragged to the shopping malls - I buy almost everything online. Thanks to China’s rapid development in the internet age, this is now really a breeze.
It's a growing view Australian businesses aren't doing all they could be doing in China. In the last few years countries such as Germany and the US have capitalised on China's growth. Why not Australia?
Investors, long term supporters of bank stocks because of their relative stability and dividend yields, are showing signs of wariness. Bank shares in Australia are off their peak by around a third. And underlying the anxiety are two main factors: concerns about the credit cycle and the ongoing demand for more regulatory capital.
The Asian Infrastructure Investment Bank passed another milestone in late June when 50 of its 57 founding members signed articles of agreement (AOA) for the institution. So now it is in operational mode, what can we expect from the AIIB?
In a further positiive development for market liberalisation in China, the country's State Council has formally unveiled its plans to launch three more Free Trade Zones (FTZs) within the Asian giant's borders.
The Shanghai-Hong Kong Stock Connect scheme was launched in November last year and although it was highly anticipated by global investors, it has seen a lukewarm start. There are several reasons for this and I don’t think any of them are fundamental problems.
Scanning the vibrant Lunar New Year celebrations planned around the globe, in Federation Square in Melbourne or China Town in Birmingham or Hamad International Airport, Qatar, it is obvious the world continues to admire China’s cultural offerings and heritage.
Many questions remain about the state of China's economy amid shifting internal attitudes and ambitious strategic initiatives. Below are four burning (and illustrated) questions about the China's new normal.
China's One Belt One Road (OBOR) is an ambitious strategic, political and economic initiative with the potential to create a new model of growth from Asia to the Middle East and Europe. Combined, the land and maritime belt and road will involve more than 65 countries, 60 per cent of the world's population and nearly half of global GDP.
According to ratings agency Fitch, the global pool of negative-yielding sovereign debt stood at a staggering $US11.4 trillion in August 2016. Around $US7.4 trillion of this debt was issued by Japan with the balance in Europe.
The global financial crisis is still with us. Its onset was unpredicted, its ramifications unpredictable. But at its heart was what otherwise discredited former American Secretary of Defense Donald Rumsfeld termed “unknown unknowns”.
“For last year's words belong to last year's language
And next year's words await another voice".
- “Little Gidding", TS ELIOT
The economic world is a different place today than it was just a few weeks ago. Fundamentals remain steady but ructions on Chinese markets, Wall St and a New Year's offering of bleak news has a lot of people on edge.
The complexities of the GBA project are huge; the benefits could be even greater.
Facebook’s digital currency holds as founder Mark Zuckerberg faces Congress. However, one party is yet to show its hand.
The evolution of the Chongqing municipality will serve as an effective blueprint for future trade in China.
Trade conflict between the US and China is inevitable, according to ANZ Research.
China's paramount policy setting confab, the National People's Congress, is in progress and has already delivered some key insights into the shape of the economy. The NPC will carry on into next week and official communications will be closely monitored by the market.
Too much China commentary focusses on the magnitude or rate of change of growth in the country (or rather the lack of it), the risks in the economy and the implications for global growth.
China's financial system is radically different to when Huang Xiaoguang returned to Shanghai with an MBA won through an UN-sponsored scholarship in Europe in 1988. The native-born Shanghainese Huang tells not to discount the capacity for China to innovate but not to expect any reform to come without thorough testing of the waters.
Gold, for centuries the object of fascination and desire, a store of wealth and bedazzling jewellery, has had a wild ride in the last decade and particularly recent years. In the long term though, according to a new report by ANZ Research 'East to El Dorado: Asia and the future of gold', it will continue to glitter.
Financial market turmoil has dominated economic news from China over the last month but has the volatility stalled the crucial move towards freer financial markets? BlueNotes put the key questions to ANZ China economist Li-Gang Liu and head of global financial markets research Richard Yetsenga
Ratings agency Moody’s Investors Service noted investment-grade 10 year corporate bond yields had, on hitting 4.42 per cent last week, reached their lowest level since 1957. Yields on the global benchmark US 30 year Treasury bonds are also at historic lows.
Positive signs for China’s onshore financial market should incentivise Chinese regulators to further improve its regulatory transparency and oversight.
China’s price-driven recovery which came on the back of the commodity super cycle is starting to lose steam.
13 Dec 2017
Trends which have driven record-breaking growth in $US bonds in the region are set to continue into 2018.
As we come to the end of 2017, we look at ANZ’s future strategy in China.
We attempt to break down some common misconceptions related to China’s initiative.
In early April reports suggested Chinese regulatory authorities were looking to tighten their surveillance of entrusted investments among different financial institutions.
Don’t get fixated on China. Australia’s issues are more home grown.
China takes another significant step toward liberalising its financial system.
China’s asset-management sector expanded sixfold from 2012 to end 2016. The opportunity is massive and growing fast.
The fall in China’s forex reserves below the $US3 trillion mark in January – its lowest level in six years - in itself is not an issue for the Asian giant. China still has adequate levels of reserves.
China’s JD.com sold 160 tonnes of cherries in one day in 2017. The size of the opportunity is mind boggling.
Try paying for small items with cash or cards in China and expect an eye roll in response.
China’s greater bay area opens huge opportunities for faster growth in the world’s second-largest economy.
New Governor of People’s Bank of China lays out timelines for country’s economic reforms.
Asian nations are adopting new technologies and platforms as they push to expand their digital economies.
It’s not in China’s best interests to devalue the yuan as it would go against two key priorities of its own government.
The Guangdong-Hong Kong-Macao Greater Bay Area is a recipe for China’s global integration plan.
The Hong Kong Monetary Authority (HKMA) has announced seven initiatives to prepare Hong Kong for smarter banking systems.
The search is on for the appropriate trade-off between growth and stability in Asia.
Globalisation and changing demographics are fundamentally transforming the structure of trade.
Singapore’s move to cool property activity should help hold back growth in calendar 2018.
ANZ awarded more than a dozen times by KangaNews, including in the growing sustainable finance space.
Market wisdom has it banks profit when interest rates rise. Is there more to this story than simply margin inflation?