Briefing: China’s Central Bank Gets Some Breathing Room After Fed Rate Cut
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A run-down of key developments in China over the past 24 hours:
Rate cut: The U.S. Federal Reserve’s decision Wednesday to lower the country’s policy rate range by half a percentage point will give Chinese policymakers more leeway to adjust their own monetary policy, analysts said. With lower U.S. interest rates, analysts said that the People’s Bank of China can cut rates to support economic growth with less concern about further depreciation of the yuan or capital flight. Pressure on the Chinese currency has only recently eased due to growing expectations for a Fed rate cut this month. The yuan appreciated sharply against the U.S. dollar Thursday. China’s stock markets rallied, with benchmark indexes closing up for the day, including a 2% rise in Hong Kong’s Hang Seng Index. The yield on China’s 10-year treasury bond increased 0.59%.
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- The U.S. Fed rate cut gives China more flexibility to lower its rates; the yuan appreciated and stock markets rallied.
- China’s environment regulator is easing rules for private businesses, which contribute over 80% of urban employment and 60% of GDP.
- A merger between China State Shipbuilding Corp. (CSSC) and China Shipbuilding Industry Corp. (CSIC) aims to create a giant with 30% of the global market.
- China State Shipbuilding Corp. Ltd.
- China State Shipbuilding Corp. Ltd. (CSSC) is one of China's largest state-owned shipbuilders. It is set to merge with China Shipbuilding Industry Corp. (CSIC) to create an industry colossus with about 30% of the global market. The merger aims to reduce competition and enhance pricing power. Currently, CSSC is utilizing 72% of its production capacity. The merged entity will be worth an estimated 270 billion yuan, bolstered by rising demand for new ships.
- China Shipbuilding Industry Corp.
- China Shipbuilding Industry Corp. (CSIC) is one of China's largest state-owned shipbuilders. It is set to be absorbed by China State Shipbuilding Corp. Ltd. (CSSC) in a stock swap merger, creating an industry leader with about 30% of the global market. The merger aims to reduce competition and enhance the pricing power of Chinese shipbuilders amid rising demand and prices for new ships, though CSIC is currently utilizing only 53% of its production capacity.
- 2024-09-15：
- The Ministry of Environment and Ecology released a document outlining policies aimed at promoting the development of the private economy.
- 2024-09-18：
- The U.S. Federal Reserve decided to lower the country’s policy rate range by half a percentage point.
- 2024-09-18：
- At an executive meeting chaired by Premier Li Qiang, the State Council called for the removal of bottlenecks in raising funds and cashing out investments in the venture capital industry.
- 2024-09-19：
- The yuan appreciated sharply against the U.S. dollar.
- 2024-09-19：
- China’s stock markets rallied with benchmark indexes closing up for the day, including a 2% rise in Hong Kong’s Hang Seng Index.
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