What does the Canton Fair tell about Chinese economy?

I'd like to do an advertisement at the beginning of this post. Our Shadow PBOC seminar has set up a website: shadowpboc.com. It will not only include long analysis on certain topics of Chinese economy as I have been posting on this blog, but also have shorter but more frequent pieces on interbank market and some smaller events. We are also thinking about filming part of the seminar and the videos will be uploaded on the website as well when we finish doing that. Thank all readers for following this blog and please keep following us at shadowpboc.com in the future. 


Last week I attended the first session of the 114th Canton fair. For a long time, the Fair held twice a year in spring and fall in Guangzhou is recognized as one of the most important trade fairs in the world. It is still the largest trade fair in China and China is still the world’s largest exporter with 13% of global exports, despite the increasing difficulties of selling goods abroad.

When talking to Chinese exporters, there are three things that they complain all the time: rising wages, rising Renminbi exchange rate and weaker demand.

Wage is growing quite fast and on average it has increased 10-15% from previous year. In Guangdong, wage level for a junior worker is 2500 yuan (400 USD) per month. For senior and skilled workers, it reaches 5000 to 6000 yuan (800-1000 USD) per month. In Jiangsu and Zhejiang (both are neighbours of Shanghai), monthly salary for a junior worker has reached 3000-3500 yuan (500-600 USD). In inland China, wage level is still low. A Chongqing-based motor manufacturer says monthly wage is about 1800 yuan (300 USD) for a junior worker.  Besides rising wages, exporters also express concerns that compared with the elder generation 15-20 years ago, fewer young people want to work in factories now.  

It is nature that no exporter likes currency appreciation and the profitability of the exporters has been hurt, especially when the currencies of other emerging economies have depreciated again the US dollar.  but it seems that everyone has become accommodated to a moderate 3-5% appreciation every year.  

Despite the rising trend of RMB Cross-Border Trade Settlement, only one out of two dozen exporters  I interviewed has used it and it is probably because most of his customers are based in Southeast Asia and Renminbi is better recognized in that region. For those who trade with Europe, Middle-East or Africa, RMB settlement is still not an option. What's more, RMB settled imports are 30% more than exports according to the PBOC's monetary policy report, as RMB appreciation expectation makes foreign companies prefer to hold RMB than sell it and the RMB pool outside China is also very small so that foreign companies do not have access to the Chinese currency even if they want to purchase Chinese goods in RMB. Sometimes exporters can avoid exchange rate risk by selling products to trading companies first and this transaction is settled in RMB.

Despite the concerns on rising wages and RMB appreciation,  in the conversations I had last week most people, especially those who trade with Europe, Russia and the Middle East, say the biggest problem now is weaker demand as they receive fewer business cards this year compared with previous Fairs.  

The New York Times has noticed that the Canton Fair has become less attractive.

For the first time in recent record-keeping, the number of companies with exhibits has declined in both the spring and autumn sessions of the 56-year-old Canton Fair compared with a year earlier. Even during the global financial crisis in 2009, the number of exhibitors dropped in the spring but rebounded in the autumn.

Buyers from all over the world still milled through the cavernous exhibition halls on Tuesday, but they appeared less numerous than during previous fairs.

We can also find evidences from the number of visitors. 92,149 visitors attended the 114thCanton Fair in the past week and the exhibition hall looks extremely crowded, especially during lunch time. However, 92,149 is 8% less than the number in spring and 1.5% less than the number last autumn.As visitors in the first week account for half of total visitors, it is likely that total number of visitors would drop this autumn and it would be the second time in Canton Fair’s history after 1978 that number of visitors in the autumn fair declines for two consecutive years. The first time was autumn 2007 and 2008.

Here is the key question: Does it mean China’s export is having another hard time, or the Fair is no longer a good indicator?

In history, the Canton Fair tracked China’s export quite well. The number of visitors first started to drop in October 2007 and had two negative growths in both spring and autumn 2008, before China’s export actually started to fall in November 2008. In October 2009 the number of visitors to the Fair rebounded before export started to recover in December 2009. Thus, the current situation suggests that we should not be surprised to see very weak export growth next year.

Canton Fair visitor number growth and China's export growth


While the number of visitors is falling, some exhibitors also told me that few of their businesses are made during the Fair and their long-term customers also rely less on the Fair to purchase products. Only new customers would make orders at the Fair. A company selling ladders to Europe told me that they spent 300,000 yuan (50,000 USD) for the exhibition in order to keep good relationship with their customers, as they would feel odd if someone does not present at the Fair. Although the importance of the Fair is declining, it would still be extremely difficult to get the space back if they give it up. A buyer from Lain America told me that the main purpose he came to Guangzhou is not to buy goods. Instead, he came here to visit his suppliers and their factories in person.

What's more, the breakdown of visitors by country shows that the proportion of visitors from advanced economies to the Fair is much lower than the proportion of Chinese export to advanced economies. For instance, the United States and Japan account for 17% and 7.4% of China’s total export in 2012 respectively, but American and Japanese visiting the Fair only account for 4% and 2% of total visitors respectively. Thus the Fair perhaps does a good job tracking China’s export to Europe and emerging economies, but it may not represent the overall picture.

Number of visitors in the first week































Hong Kong




































In addition, for those who sell products mainly to the Middle East, they have a specific reason for fewer visitors. The Eid al-Adha 2-day holiday starts on October 14 this year, which is the day that the Canton Fair opens.

It is extremely difficult to answer the question I raised above and the both explanations are possible. It does not necessarily mean that export growth would be low next year, but at least it tells us that the trade environment is not very encouraging. 


Shadow PBOC seminar

Chen Long


Financial liberalization, reform and urbanization in INET Shenzhen

This week, Chen Long and I were honored to be invited to the INET-Tsinghua conference in Shenzhen. Sharpest minds gathered at the conference to discuss the most concerned economic issues on China. Titled “The Good Life: The Challenge of Progress in China Today”, the conference addressed topics on China’s institution, shadow banking, financial liberalization and urbanization. Several speeches sparked inspiration in my minds, and I want to share the opinions in the post.

First, institutional reform on capital allocation was strongly favored by the panelist. Mr. William Janeway pointed out that China was transforming from “catch-up” innovation to frontier innovation, which required the cooperation of the government, the capital market, and the capital owner. According to his opinion, it was the time for Chinese government to sacrifice part of economic growth to sponsor the innovation, which means to allocate less resources to low-risk investment and fund more of high-risk innovation.

Adair Lord Turner supported Mr. Janeway’s view from another angle. He also said that China should change the way of credit allocation, and rely more on free market rather than interest rate management to adjust the investment. He recognized that under the current circumstances, extremely low interest rates stimulate more investment over consumption, which leads to more imbalance in the economy. Total social financing has been rising at a much faster pace than GDP and China is facing a rising debt problem.

We completely agree. Some argue that there won’t be a debt problem in China because it is the state-owned banks lending to government and state-owned enterprises. Since both sides are state-owned, the government can tell them to write the debts off. This claim might look plausible at the first glance but it is fundamentally wrong, because banks owe debts to the depositors and if bad assets are written off from the banks’ balance sheets the depositors will either withdraw their deposits from banks or they will have to take the losses, and both scenarios will lead to crisis.

That said, interest rate liberalization should be the pill to cure the disease. However Lord Turner also said that the steps towards interest rate liberalization have to be cautious given the large amount of debts at the current moment. What’s more he also argued that financial liberalization is not the magic stick to solve everything and China has to be careful dealing with issues like capital account liberalization. In a later speech, Mr. Frank Veneroso also expressed similar views that China has to be cautious moving towards financial liberalization.

In another panel, Nobel laureate, Prof. Robert Engle introduced the idea of systemic risk in his speech. Systemic risk means that if every firm has a high leverage, a small disturbance in financial market will lead to spiral down and finally, collapse. According to his calculation, the systemic risk of Chinese banks was catching up with Japanese banks, which is very alarming.  Prof. Engle also raised the concerns about the inefficiency and the implicit guarantee of China's state-owned enterprises. This is a very important issue but unfortunately Prof. Engle did not go into details due to time constraints. The SOE problem is widely noted, but it is important to find out the fundamental reason so that the right reform would be made. If we assume that Chinese SOEs are less efficient than the private-owned companies, we have to identify whether it is because of its ownership structure or other reasons. If the SOEs are inefficient simply because they are owned by the government, the solution would be very easy - just privatize them. However, if their inefficiency is not due to the ownership structure but their monopoly status, the government should introduce more competitions. If the SOEs are inefficient simply because their sizes are too big, the solution would be much more difficult as too-big-to-fail has become a universal problem. There is no easy answer. Many argue that the ownership of SOEs led to the implicit guarantee by the government which caused the moral hazard and inefficiency, but apparently a company does not have to be state-owned to be implicitly guaranteed. The most recent financial crisis suggest that as long as a company, especially a financial institution, is large enough, it would be guaranteed by the government no matter whether it is owned by the state or by private entities.

Moreover, it is also unclear that whether privatization can reduce risks. Some people argue that large US banks tend to take more risks than small US banks because they are too-big-to-fail, but it seems that small and medium sized banks are doing more risky businesses than large banks in China, because the state regulator has better controls over large state-owned banks and it does not allow large banks to get risky. If China privatize the large state-owned banks, it would probably increase financial risks because large banks are still too-big-to-fail and they might take more risks as the state regulators have weaker control over the large banks.

Mr. Xiao Geng of Fung Global Institute also acknowledged that financial repression caused the rapid investment growth in China, and he offered two interesting reasons explaining why China did not have financial crisis in the past 30 years. The first he said was that most of the investments made in the first 30 years were guided by the central planning so that there were pretty successful. The recent sharp increase in debt and debt-funded investments was because of a weaker central planning. The second reason was that China has gone through a catch-up period, during which the capital accumulation was low enough that every penny of investment generated high return. Mr.Xiao argued that the two driving force, however, were gradually losing its power, and the new investment in China could no longer cover the cost of capital.

We agree that the recent investments may not be enough economic viable to cover the cost, but his explanations about the 30-year growth sound a bit dubious. It is plausible that when a country is poor it usually needs a strong government to implement right policies to take off and in theory the investments at such stage tend to generate high returns. However, it is different from that central planning is key to success and less central planning causes troubles. History suggests that central planning usually failed to work. Steel is a sector that the government has strong controls, but it has experienced over-capacity problem for many years. After all the whole point of Chinese reform after the late 1970s is to get rid of central planning, not to highlight central planning. What’s more, it is also dubious to argue that since a country is poor any investment would be beneficial. If it is that easy, there would be no poor country in the world. In fact there is little evidence supporting that investments in poor areas must be more economic viable than investments in rich areas. Investments in poor areas can be very likely to be wasted simply because nobody can afford using it. A recent IMF paper suggests that investment in Chinese coastal areas are more economic viable than investments in the inland.

The conference closed with the discussion of urbanization. Mr. Tom Miller of China Economic Quarterly delivered an interesting speech on cities of China. He attributed the scrupulous expansion of cities to the low price of land. Not like most other opinions, he did not emphasize that local government rely on land grant to fund their expenses. Instead, he raised the point that local government was also hungry of business tax, as they can keep 75% of it to themselves while turning over most of other taxes to the central government. In order to attract profitable firms to settle on their territory, local governments often provide cheap land for those firms to build their offices or factories. This accelerated the uncontrolled expansion of cities. One solution to this problem, according to his speech, was to introduce property tax in cities. He argued that if the government had an alternative source of income, they would not be so eager to collect business tax from local firms. This argument, however, is based on an implicit assumption that a government has a fixed target of fiscal revenue. Tom acknowledged that it would be really challenging to push forward the property tax due to the political pressure, but my concern is that there is no upper limit of local governments’ desire of fiscal revenue. There is little evidence suggesting that Chinese local governments would be satisfied with property taxes so that they would sell less land or charge less business tax, and it is very possible that local governments would still try hard to increase their fiscal resources. If this is true, it would be completely against rebalancing since the government should cut tax, not raise it, to lift household consumption as a share of GDP.

The new semester has kicked off and our shadow PBOC seminar will resume this Saturday afternoon in Peking University. We will continue to discuss these issues and guest visits are very welcomed.

Duan Wan

The Debt Dragon

I wrote two pieces responding to FT's recent debt dragon series but they were on the Institute blog site instead of here. So I am pasting the links below so that our readers can find them:

China Economics Seminar: Understanding the Guizhou Paradox

China Economics Seminar: The Real Risk In China’s Local Government Debt



A Short History of China’s Doubtful GDP

It is no secret that the quality of Chinese statistics, especially GDP, is far from perfect. Chinese GDP’s lack of volatility often looks surreal.

Along with many other China analysts, I often feel frustrated by this. Perhaps I feel even more strongly because it is somehow embarrassing when foreign investors and scholars always ask me how authentic my country’s data is.

Recently I reread American-Chinese historian Ray Huang’s book in which he argues that China failed to industrialize before Europe because the old empire was functioning on the basis of philosophical principles instead of solid numbers. For instance, 50 years after the Bank of England was set up, the 18th century Chinese emperor still had no estimate of the exact number of people under his rule. Some government officials even argued that it was not necessary to collect population statistics and that it would only increase the fiscal burden to do a census.  

China paid huge costs for its inability to modernize and the old empire almost lost its sovereignty. Of course, things changed dramatically in the 20th century as China started to industrialize at a relatively fast pace. However, although GDP became the main tool measuring for an economy after the WWII, it was not until 1985 that mainland China started to calculate its GDP. Before that to calculate its economic output China was using Material Product System, which was a method adopted by the former Soviet Union and many other socialist countries before 1991 that is still used by North Korea and Cuba today.

One of MPS's main distinctions is that it does not include any services. It was not until 1993 that China completely abandoned MPS and GDP became the only main measurement of economic output. 

In other words, we actually have little idea about China’s actual GDP before 1985 because it was not even calculated back then.

The pre-1985 GDP numbers we find in the economic databases today were rebuilt after 1985, so it is reasonable to argue that the data quality is not very high. Moreover, China's GDP numbers in late the 1980s and early 1990s were still not trusted by the World Bank, who published every country’s GDP in US dollars, because the official Renminbi exchange rate was very far from the market rate. The World Bank only started to use the official Chinese data after China’s first exchange rate reform in 1993.

If the skepticism about GDP focused largely on methodology or the exchange rate before 1993, the concern later became whether the number was cooked because it had a lot to do with the “growth target”.

China's growth target is very Soviet-style, but in the 1980s it was not as important as it later became in the 90s. There could be two reasons. First, China only started to calculate GDP in 1985, so it took time to become a widely accepted number. Second, the political events in the late 80s heightened the importance of economic growth.

The 8th Five-Year-Plan released in 1990 only set the growth target at 6%, but two years at the 14th Party Congress the party decided to lift the growth target from 6% to 8%. The congress report says, “it is not only a major economic issue, but also a major political issue whether our economy can grow even faster”.

The more well-known fact is that during the Asian crisis former Premier Zhu Rongji stressed that GDP growth had to reach 8%. But in reality 8% was mentioned 6 years earlier than that.  Why 8%? Many believed that only by growing at 8% would China avoid massive unemployment. But if that’s the case it would be hard to explain why the party set the growth target at 6% in 1990. Clearly in 1990 the party did not think that growth had to reach 8%, but later they figured that more political assets were needed and higher growth would help.

To some extent it is fantastic to have a GDP growth target, as long as the target is considered to be reasonable, because the government can finally function on the basis of numbers instead of philosophy, moral standards, or relationships.

The new GDP targets were also a big adjustment from Mao's chaotic era when economic output targets were largely based on his personal belief. In fact, China was not a Soviet-style planned economy before 1980s because it never had planning on a mathematical basis like the former Soviet Union. It was a one-man command economy that was different from both the Soviet Union, which used sophisticated mathematical equations to calculate general supply and demand, and the United States, which let the market decide most of the issues. Therefore, having a serious target is big progress in Chinese history and it helped a lot in achieving high growth.

However GDP targeting also has a dark side, as it gives local leaders incentives to inflate their data. Data manipulation is natural in such a regime and becomes more severe during bad times.

We saw ridiculous number cooking when Mao launched the “Great Leap Forward” movement in late 1950s and early 1960s and the cost was the lives of millions. The 90s were much better than Mao’s era, but when Zhu Rongji announced an 8% growth target during the Asian crisis, local governments started to cook numbers again simply because 8% was mission impossible.

The numbers reported by local governments were so surreal that even the National Bureau of Statistics would not believe it. National GDP growth of 7.8% announced by the NBS was much lower than the sum of local GDP. Since then, it has become a common phenomenon that every year national GDP is lower than the sum of local GDP. Although the NBS data seemed closer to reality than the local governments’ figures, there were still many people challenging its quality. Their argument was that since the work of the NBS had to be based on the reports from the local level, it seemed impossible that NBS could make an accurate calculation if all the local data was inflated. Thomas Rawski’s 2002 paper largely summarised the debate on China’s data quality circa 2000, and he believed that China’ 7.8% growth in 1998 was overstated greatly.

To counter the criticisms on quality of statistics, the NBS made another reform in calculating the national account in 2003. China Daily said:

China will reform gross domestic product (GDP) calculation and statistics release based on international standards, so that the statistics objectively reflect the performance of the economy.

Li Deshui, director of China's National Bureau of Statistics (NBS), said here Thursday that the reform plan had been approved by the State Council, and will be implemented by NBS. He pointed out China's GDP calculation method, initiated in 1985, had been improved gradually. However, the calculations still had some problems due to the lack of a regular adjusting and revising mechanism. Some traditional methods did not comply with international norms, arousing some criticism from the international community.

The NBS’s efforts should get some credit. But the reform did not reduce skepticism about China’s statistics, though this time the doubts went in the opposite direction. After late 2003, economists started to argue that the official data understated real growth. The People’s Daily said:

Official Chinese economic data has been viewed skeptically for decades, but one prominent Chinese economist is making a charge rarely heard before.

…Wu Jinglian says the country's economy actually grew faster during the first half of the year than the official 8.2 percent announced by the government.

Wu, who works for the States Council's Development Research Center, bases his statements on numbers from the country's statistics bureau.

Wu’s argument for China's GDP being understated is very similar to some of the arguments we see nowadays. He pointed out that power generation and IP growth were much higher than GDP growth, which was exactly the same (but in opposite direction) as the arguments last year when analysts said that GDP growth was overstated because power generation growth was a lot lower.  

Wu said an economy growing at 8.5 percent a year does not produce data such as the 16.5 percent industrial output growth recorded in the first three quarters of this year.

He also said tax revenue growth, at 21.7 percent in the first nine months, and power generation growth of 15.6 percent were also out of kilter with the National Bureau of Statistics's top forecast.

Wu was soon proved right, though the logic was quite different. In December 2004, China did its first national economic census and found out that actual national GDP in 2004 was 16.8% higher than the previous calculation. Bloomberg reported:

A yearlong census revealed millions of companies previously unaccounted for, with combined output valued at about $284 billion in 2004, the National Bureau of Statistics said today in Beijing. Most of those companies are in service industries, which have been growing faster than manufacturing.

Since then, every economic census ended up finding that overall GDP was a lot higher than previously estimated because the service sector was a lot larger than imagined. This is plausible, as every country has a so-called “underground economy” that largely consists of service industries. If China did another census tomorrow I would bet that GDP would again be higher than the number announced previously.   

The latest and perhaps most persuasive evidence that China’s GDP is unreliable comes current Premier Li Keqiang. The Economist made a Keqiang index in 2010, saying:

IF CHINA'S deputy Prime Minister, Li Keqiang, succeeds his boss, Wen Jiabao, in 2013, as is likely, he will become his country's top economic policymaker. But he may not pay much heed to the figures provincial officials feed him. In 2007 he told America's ambassador that GDP figures in Liaoning, where he was then party chief, were “man-made” and unreliable, according to a State Department memo released by WikiLeaks.

In Mr Li's honour, The Economist has created a “Keqiang index” for China's economy, combining his three preferred indicators (see chart). It reveals an economy that is as dynamic as the official figures suggest, but a great deal more volatile. Electricity consumption and cargo traffic both shrank in the final months of 2008 and in early 2009, implying that China's economy suffered more grievously than the official figures allow. A loan surge in 2009 presaged the rapid recovery that followed.

Indeed, the volatility matters much more than the actual size. It is not important to argue whether GDP is overstated by $1 trillion because property’s weight is too small in the inflation basket or if it is understated by hundreds of billions because many services industries or new technology sectors are not counted in. Even the growth does not matter too much now - what matters is the quality of growth.

20 years after the party set the GDP growth target at 8%, do we still need a GDP target? I doubt it. GDP targets can be very unrealistic and time-lagging, and they can cause local governments to waste a lot of resources simply to make their boss happy. 

With soft budget controls and distorted pricing in the financial system, China’s local governments can invest endlessly. This investment would make GDP growth extremely high in the short term, but eventually the country (especially households) will have to pay for the imbalance caused by inefficient investments. Needless to say the numbers can be cooked.

Many would still argue that China needs high GDP growth to absorb excess labor, but without unemployment data we do not even know whether it is worth polluting the environment to keep GDP growth high. It is said that China started to collect unemployment data in 2005, so why not publish it? We need more data to make the right judgment and now is the time to make another change. 

Chen Long
Central Banking Seminar


Current guidance is needed from the PBoC

Recently, forward guidance has become a new fashion in the world of central banks and Bank of England is the latest one to join this club. In the news conference last Wednesday, Bank of England Governor Mark Carney said that the BoE would not raise Bank rates from the current level of 0.5% until the unemployment rate, currently at 7.8%, dropped to below 7%. The BoE’s historic move was following in the footsteps of the Federal Reserve and European Central Bank, who introduced forward guidance in December 2012 and July 2013 respectively.




China's central government is paying for the AMCs

Interbank crunch, GDP slowdown, worsened rebalancing, mysterious government debt … after so much frustrating news I finally found something inspiring: the Asset Management Companies (AMCs) are paying their bond principals! Read more

Why is China auditing local government debt again?

Here is what the FT says: 

China will conduct an urgent audit of all government debt, underlining concerns over rising financial risks in the world's second-biggest economy.

The National Audit Office said in a one-line statement on Sunday that it had been instructed by the state council, China's cabinet, to come up with a tally of how much money is owed by all levels of government from villages up to central authorities.

So why do we ask the question in the title? Read more

China’s “right kind of growth” seems short-lived

When the National Bureau of Statistic (NBS) said at a press conference (in Chinese, see FT report) last October that consumption contributed 55% of China's growth in the first three quarters of 2012, exceeding the contribution from investment, people were excited to announce that China finally started to follow “the right kind of growth” and many believed growth in Read more

Unintended consequences made the PBOC’s strategy fail to work

As overnight and 7-day repo rates fell back to the range of 3-4%, the so-called “interbank crunch” in China’s interbank market, which looked like a TV series to me, seems to be finally over, at least temporarily. The tide has gone out, but what are the lessons we learned from it?  There are lessons not only for the PBOC but also for commercial banks, big and small.   Read more

One chart to show why China should worry about Fed tapering too

Ok actually there are two charts. The first one is the USDCNY intraday-interday chart. For those who have followed our blog for more than a year, it would not look new. If it is the first time that you see this chart, you can find the background of this chart here. The second chart is the assets held by the Federal Reserve since the beginning of quantitative easing.  Read more

Import from Taiwan and USA overstated as well?

That's what the charts are suggesting.

Many argue that China's export data is overstated because China's export to HK is way higher than HK's import from China, but in fact you have to examine China's export to other major trading counterparties (US, Japan, Germany, Korea, Taiwan) and their import from China before making the conclusion.

In history, China's export to HK is always much higher than HK's import from China and China's export to US and Japan is always much lower than US and Japan's import from China. Why? Because the final destinations of a lot of China's export to HK are actually US and Japan. HK is just used as a re-export harbour.  Read more

Why did Chinese shadow banking surge after 2009?

Chinese shadow banking has become a well-noted subject in the discussion on Chinese financial system. Joe Zhang, a former research analyst and investment banker at UBS, recently published a book Inside China's Shadow Banking: The Next Subprime Crisis which fueled the already heated discussion on this topic.  Similar to other analysis, Joe attributes the origin of China's shadow banking to financial repression, which includes the artificially low interest rate in China.  Read more

Is anti-corruption slowing down overall retail sales in China?

Last week I did a small research about the impact of the anti-corruption campaign on China's retail sales growth. While some analysts argue that the anti-corruption campaign by top party leaders has dragged down overall retail sales growth, my findings do not suport this argument.  My study suggests that the slowdown of retail sales is a multi-year trend and it has been in line with the slowdown of GDP growth. While anti-corruption does affect luxury goods sales, overall retail sales may not be affected as many think. Read more

China's rebalancing, shadow banking and RMB internationalization in INET Hong Kong

Last week, Yang Le and I were fortunate to attend the INET annual planery conference in Hong Kong as a part of the young scholar group. As it did in Berlin, INET again invited many speakers who are among the wisest minds in the world and they shared with us a lot of insights. The difference of the HK conference and the Berlin one is that we had much more discussions on a variety aspects of China. Among the most concerned issues are China's growth under rebalancing, the shadow banking system and the future of Renminbi internationalization. I saw several shifts of those viewpoints in the HK conference and this is what I would like to write briefly about today. Read more