https://twitter.com/SofiaHCBBG/status/1512282055249260552
Sofia Horta e Costa
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Shanghai residents push back against a never-ending lockdown. Cases in China’s largest city exceed 21,000 as the government conducts its mass testing exercise. People are running out of food, medication and patience. 2/10
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More vows from Beijing to support the economy. Officials say they will use multiple monetary policy tools at an “appropriate time,” without specifying when that would be. An interest rate cut is expected on Good Friday (April 15). 3/10
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China publishes a draft outline for its recently announced stability fund. While the key mandate of this new fund is to rescue financial institutions, it could also indirectly help troubled property developers via bank lending. Watch this space. 4/10
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A turning point for property? Funds managed by BlackRock reduced their holdings of Chinese developer bonds in March. But PIMCO is bullish on stronger firms, while JPM stock analysts upgrade Vanke, Country Garden, China Jinmao and Greentown Service. 5/10
“Global funds slashed their holdings of Chinese bonds by the most on record last month amid the nation’s dwindling yield advantage over the U.S. and geopolitical uncertainties posed by the war in Ukraine.”
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China responds to Pelosi’s reported plans to visit Taiwan. Such a visit would be an “extremely dangerous political signal to the outside world,” says foreign minister Wang Yi. The last serving U.S. house speaker to visit was Newt Gingrich in 1997. 6/10
““If the speaker of the U.S. House of Representatives knowingly commits a sneaky visit to Taiwan, it will be a malicious provocation to China’s sovereignty, gross interference in its internal affairs and an extremely dangerous political signal to the outside world,” Chinese Foreign Minister Wang Yi said of a reported trip by Pelosi to Taipei, which would be the first by someone in her post in 25 years.”
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U.S. trade chief Katherine Tai says decoupling from China is not the plan. The goal is to create a fair and balanced relationship, she says. China’s March export/import data is due April 13. 7/10
“Asked in an interview whether U.S.-China tensions could lead to decoupling, Tai said the Biden administration’s policy was focused instead on “realignment in the global economy.” That includes addressing the lack of visibility, accountability and diversity in supply chains that has led to disruptions in recent years, she told Bloomberg Television’s Haslinda Amin in Singapore.”
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March outflows confirmed. PBOC data shows overseas investors sold Chinese government bonds for a second straight month. “Flows may remain soft in the next few months given the degree of geopolitical uncertainty,” says Goldman. 8/10
http://shanghai.pbc.gov.cn/fzhshanghai/113595/4526875/index…
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Cargoes of Russian coal and oil will arrive in China in April. These will be the first commodity shipments paid for in yuan since the U.S. and Europe sanctioned Russia for its invasion of Ukraine. 9/10
"Russian coal and oil paid for in yuan is about to start flowing into China as the two countries try to maintain their energy trade in the face of growing international outrage over the invasion of Ukraine.
Several Chinese firms used local currency to buy Russian coal in March, and the first cargoes will arrive this month, Chinese consultancy Fenwei Energy Information Service Co. said. These will be the first commodity shipments paid for in yuan since the U.S. and Europe penalized Russia and cut several of its banks off from the international financial system, according to traders."
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Hong Kong will have a new leader. John Lee - a former police officer - is emerging as the sole candidate for the May 8 vote. Lee was responsible for implementing the national security law and overseeing a clampdown on pro-democracy opposition. 10/10
"A veteran Hong Kong law enforcement official, John Lee, announced his plan to run for the city’s top job, in a sign Beijing is focused on deepening its crackdown on dissent in the Asian financial hub.
Hong Kong’s No. 2 official told a news briefing Wednesday that he had notified outgoing Chief Executive Carrie Lam in a letter that he would step down and seek her job. “Having been in the government for over 40 years, to serve the people of Hong Kong is a glory,” Lee said, adding that he would elaborate on his agenda once his candidacy had been formally approved by Beijing."