Posted inBeijingChinaHong KongJapanMexicoNortheast AsiaWorld

The Daily Brief for Friday, 6 January 2017

Beijing has won at least a short-term reprieve from markets after it strengthened the yuan reference rate, which determines the range within which the currency can trade, by 0.9%, the most since Beijing abandoned its US dollar peg in favor of a crawling peg in July 2005. The recovery, writes Steve Wang, marks a victory for China’s policymakers, who have been pouring foreign exchange reserves into the market to prevent a destabilizing collapse.

Shares of Toyota Motor Corp fell more than 3% on Friday after US president-elect Donald Trump threatened to impose taxes on the carmaker if it builds its Corolla cars for the US at a plant in Mexico. On Thursday, Mr Trump tweeted: “Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for US NO WAY! Build plant in US or pay big border tax.”

What if George W. Bush had taken a tougher line with China over the EP-3 crisis in 2001? The incident, on April 1, 2001, resulted in the death of a Chinese pilot after his plane intercepted a US Navy intelligence aircraft in international airspace. The US plane then made an emergency landing on Hainan Island, where the crew were subsequently detained. Instead of the US accepting responsibility and apologizing, writes Harry J. Kazianas, a harder stance – as suggested by Donald Rumsfeld at the time — could have laid down a marker in subsequent years.

Ever feel nostalgic for the notorious Kowloon Walled City? Hong Kong’s renowned slum has been replicated inside a video-game warehouse in Kawasaki, Japan, offering a glimpse of what the haven of opium dens and triads looked and felt before its demolition in 1993. Said Karlsson went along with his camera for Asia Times.

Kenny Hodgart

Kenny Hodgart is an editor for Asia Times.

Posted inBeijingChinaHong KongShanghai

China Digest for Friday, 6 January 2017

Chairman of securities regulator vows to get tough on illegal activities

Liu Shiyu, chairman of the China Securities Regulatory Commission, vowed to “severely punish” those practising illicit activities in the financial markets, building on a crackdown instituted last year, reported Caixin. Liu aims to revamp the CSRC to “catch rats and wolves” after the regulator reported 218 penalties imposed on violators in 2016, an increase of 21% from 2015, according to the report.

Housing sales shifting to secondary market in main cities

Housing sales in Beijing, Shanghai and Shenzhen are shifting to second-hand properties as supply of new homes declines, pointing to a price adjustment in the markets this year, according to the Economic Information Daily. Secondary market transactions in Beijing are 4.8 times that of new homes, the report said, citing researcher China Index Academy. The ratio in Shanghai is 3.3 times and Shenzhen 2.4.

China’s IPO market set to grow in 2017

China Securities Regulatory Commission aims to help guide more capital to the Initial Public Offering Markets and the number of new listings will increase at a higher speed in 2017 than last year, China Financial Daily reported, citing industry experts. The watchdog will also monitor re-financing activities more closely, including back-door listings and mergers and acquisitions.

Joint bank between China Citic and Baidu receives regulatory nod

Baixin Bank, an initiative between China Citic Bank and search engine giant Baidu Inc, won approval Thursday to start online banking operations, reported Caixin. The license only allows for online banking, not the opening of physical outlets. Baixin has a registered capital of 2 billion yuan (US$290 million), with China Citic holding 70% and Baidu the remainder.

China to start IPv6 information technology project

China will start working on the Internet Protocol version 6 project to facilitate development of the Internet of Things, Internet of Vehicles, and artificial intelligence, Economic Information Daily reported. The Ministry of Finance will set a tax policy to speed up the industry’s growth.

Shenzhen attracts more funds in the first month of SZ-HK Stock Connect

Net capital flow into Shenzhen reached almost 17 billion yuan while that coming into Hong Kong totaled HK$7.49 billion (6.65 billion yuan) in the first month of the Shenzhen-Hong Kong Stock Connect linking both securities markets, China Securities Daily reported. The amounts are lower than what was seen in the first month of the Shanghai-Hong Kong Stock Connect. The bulk of the capital flowing into Shenzhen was chasing mainland blue-chips, the report added.