18 January 2020


Fresh evidence came in Monday that China is seeing more capital inflow as investors are getting more confident that the world’s second-biggest economy is out of the woods. Central bank data showed that China’s yuan funds outstanding for foreign exchange — a major indicator of international capital movement into or out of China — rose for a second month in September, reaching 27.5 trillion yuan (US$4.5 trillion) at the end of the month. Two other key indicators of money inflows were also positive – the trade surplus, and foreign direct investments from Asia, Japan, Europe and United States were all up in the first nine months from a year earlier. The increasing capital inflows could put further appreciation pressure on the renminbi. The redback’s daily midpoint against the US dollar has risen 2.45 percent this year. Given this situation, the People’s Bank of China is unlikely to relax its monetary policy stance amid concerns over credit expansion.

Super smog: An uptrend in clean energy and environment protection-related stocks is likely to sustain on the stock market as bad air conditions in China have again made international newspaper headlines. Demand for natural gas is expected to exceed supply in the next five years as the development of clean energy is still falling short. Primary and middle schools and some highways have been closed in Harbin due to heavy smog, and at least 40 flights to destinations in southern China and Beijing were canceled or postponed. Meanwhile, a manager for US jazz singer Patti Austin said the singer has canceled a concert in Beijing because of an asthma attack likely linked to pollution. The density of fine particulate matter, PM2.5, used as an indicator of air quality, was well above 600 micrograms per cubic meter — including several readings of exactly 1,000 — at several monitoring stations in Harbin.

– Contact the reporter at [email protected]