Professional Documents
Culture Documents
Recent Turbulence
Whitman Lecture
Yu Yongding
Presented at the
Peterson Institute for International Economics
Washington, DC
September 29, 2015
In 2012
In 2013
In 2014
In 2015
Corporate profitability
Inflation rate
growth target
Relatively high
2027
2024
2021
2018
2015
2012
2009
2006
2003
2000
1997
1994
1991
1988
1985
1982
1979
1976
1973
1970
1967
1964
1961
1958
1955
1952
K/L
Y/L
2012
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
1968
1966
1964
1962
1960
1958
1956
1954
1952
60
50
40
30
20
10
3.00
2.00
1.00
2015-05
2015-01
2014-09
2014-05
2014-01
2013-09
2013-05
2013-01
2012-09
2012-05
2012-01
2011-09
2011-05
2011-01
2010-09
2010-05
2010-01
2009-09
2009-05
2009-01
2008-09
0.00
Three stages
Stage 1 (Nov.24, 2014 Jan. 19, 2015)
On 15 Jun. SSECI fell to 5062.99, by 103 and 2% over the previous day.
This was the day when the bubble started to burst
Now the index fluctuated violently, threat to break the threshold of
3000 point
Measures taken
to boost share prices
margin trading was encouraged and
facilitated
Monetary loosening (lowering the RRR and
benchmark interest rates etc.)
Reform of IPO procedure: from the
examination and approval system to the
registration system
Shanghai-Hong Kong connection
Expand quotas of QFII
The crash
the China Securities Regulatory Commission
decided to restrict offline private fund
matching in the middle of June.
On 15 Jun. The SSECI fell to 5062.99, by 103
points and 2% over the previous day
Because the wide use of margin trading, the
fall in stock prices led to margin call, a
correction turned into a collapse
Closing
price
Daily
fix on
12 Aug
Unexpected fall?
12
11
1,500.00
1,000.00
500.00
2015-06
2014-09
2013-12
2013-03
2012-06
2011-09
2010-12
2010-03
2009-06
2008-09
2007-12
2007-03
2006-06
2005-09
2004-12
2004-03
2003-06
2002-09
2001-12
2001-03
2000-06
1999-09
1998-12
-500.00
1998-03
0.00
-1,000.00
-1,500.00
:()
Now one knows. But should not very large. 10%? 20%?
China is still running current account surplus
China still has capital control
245
For China
Corporate foreign debtAccording to BIS, 962 billion USD70 without hedging. Chinas
own figure is much smaller, less than 500 billion USD
Banks foreign debt: 300 billion USD, peanuts
International condemnation: currency war
What else?
Concluding remarks
There will more turbulences to come
Like in the past, China probably will muddle
through again