Caijing

Issue No. 22， 2015

Yet Another Test for the RMB

Following a 130-character announcement by the Peoples Bank of China （PBOC） on August 11， the central parity of RMB against the U.S. dollar shed 1.8 percent of its value， the largest single-day fall in 21 years. In the three ensuing trading days， the RMB-dollar rate declined by 3，000 basis points， a slide that polarized frenzied attention around the globe.

The current round of exchange rate reform targets the exchange-rate formation mechanism in a bid to render it more transparent and better reflective of market developments in the RMB-U.S. dollar exchange rate.

Pundits worry that， amid current expectations of devaluation in the market， reform might plunge the RMB into a depreciation mode that could spin out of control. But PBOC was prepared and reassured the market as to its resolve and intervention capability， if necessary， and of the need to maintain the stability of Chinas currency. On August 14， the RMB-dollar rate rebounded.

The financial sector largely views the PBOCs policy change as foreseeable. A weaker RMB will boost Chinese exports and cater to the demands of the macro-economy. Furthermore， several currencies have also depreciated before this， including the euro， Japanese yen， and also those of various emerging economies. Yet the primary goal of improving the central parity system is to establish a more market-oriented exchange-rate mechanism that meshes with the long-term goals of Chinas reform of its financial markets， as well as the countrys aspiration to include its currency in the IMFs basket of Special Drawing Rights， a prelude to the internationalization of the RMB. It also opens up the possibility of more diversified RMB products on the forward market.

Weekly on Stocks

Issue No. 63， 2015

Persevering Efforts to Buoy the Stock Market

Fear of the domino effect from the rout after Chinas key stock index plunged by over 30 percent in 20 trading days has spurred the government into rolling out the strongest measures in history to rescue the market， including rate cuts by the central bank on June 27. The result transpired two weeks later – the market rallied on July 8， and the liquidity crisis largely dissipated despite a second nosedive of the key stock index.

Due to urgency， the preparation and execution of measures to prop up the stock market are by no means flawless， while investors have no idea if these measures will stay in place， or if so for how long. Transparent policy is therefore critical. The funds injected into the market must also be better regulated and supervised， and the information thus yielded made accessible to the public.endprint

In the wake of the 2008 financial crisis， the U.S. poured hundreds of billions of dollars into bailing its companies out， and introduced three rounds of QE worth trillions of dollars to boost liquidity. This led to a strong rebound in the stock market that has continued to break new records and， moreover， to steady economic recovery. The stock market stands as a barometer of the overall economy， so the timing of the end of state intervention is determined in the first instance by the economic development situation.

Southern Metropolis Weekly

Issue No. 16， 2015

Art and Crowdfunding

Once labeled utilitarian and an out-and-out business model， crowdfunding is now being resurrected in art circles， but the rewards there lie more in the realm of spiritual fulfillment than lucre.

A case in point is the August concert staged by Da Bing. For this event， the singer and his music troupe solicited funds on social media platforms QQ and WeChat. They were surprised to find that， of all the investment options， the best received was “honorable producer，” which came with the price tag of RMB 5，000， roughly equal to the monthly salary of the young professionals who constitute the majority of its investors.

The crowdfunders of such art projects are clearly motivated by non-material and highly individual concerns， be it a love affair， family bonds， or simple nostalgia. The goals can be as specific as preserving a dilapidated building， an artwork on the verge of extinction， or merely be meant to express an attitude， a pursuit， or a form of rebellion against banality.

Life Week

Issue No. 35， 2015

The Parade – History of Chinas Military Equipment and Strategy

On September 3， China held a military parade to commemorate the worlds victory in the antiFascism war 70 years ago， which involved its navy， air and land forces.

Todays Chinese army possesses essentially all of the military hardware found in developed Western countries， and the performance of much of it is on a par with or approaching the worlds best. Chinese bombers have carried out distant sea drills several times； the countrys second-generation nuclear submarines can stay at sea for months， and its naval fleet has completed 21 escort missions to the Gulf of Aden. China is one of just three countries possessing intercontinental ballistic missiles and submarine-launched strategic missiles， one of only nine nations with an aircraft carrier in active service， and one of the three countries to have completed test flights of fourthgeneration jet fighters.endprint

The modernization of Chinas army has improved the countrys defense capabilities against foreign incursion and of protecting Chinese citizens and their economic interests around the world， while also maintaining security in the worlds public sphere. It is also part and parcel of Chinas pledge to proactively live up to its international responsibilities.

Xinmin Weekly

Issue No. 33， 2015

Heavy Chemical Woes

The disastrous explosion at a chemical warehouse in Tianjin on August 12 alerted China to the hazards of chemical industry installations in urban areas.

China chose heavy chemistry as its priority for industrial development after the founding of the PRC， and has expedited both industrialization and urbanization since the commencement of its reform and opening-up policy. Today， however， the chemical projects that once lay distant from cities have encroached on the vicinity of communities， posing a severe threat to their residents.

Tianjin is the cradle of Chinas chemical industry， and home to large-scale operations of such chemical giants as SINOPEC， CNPC， CNOOC and ChemChina. As businesses create jobs， populations naturally cluster around these industrial hubs in a disquieting but convenient selection by such residents.

Without effective risk control and prevention measures， China will be unable to stem the ever-swelling slew of public safety disasters.endprint