22 November 2019

Chi Lo

Senior economist of BNP Paribas Investment Partners (Asia) Ltd. and author of “China’s Impossible Trinity – The Structural Challenges to the Chinese Dream”
  • The creditors in China are the households, who are ultimately backed up by the government’s implicit guarantee policy. Photo: Bloomberg

    Why a Chinese banking crisis is unlikely

    - Apr 5, 2016 12:03pm
    Some market players believe China would see a banking crisis soon, with losses expected to amount to US$3.5 trillion, 30.4 percent of the banks’ total equity, or four times larger than the equity hit that US...
  • Technology and healthcare companies in China have seen robust earnings growth, making them good investment bets. Photo: Bloomberg

    Hidden opportunities in China’s slowing economy

    - Mar 17, 2016 11:24am
    Despite an almost 50 percent slide from peak levels last June, valuations in China’s A-share market are still not cheap overall. The Shanghai Composite index, for example, offers an aggregate price-earnings (PE) multiple of about 13....
  • Much of the money leaving China is going to repay the foreign debt of Chinese companies. Photo: internet

    Why market talk of Chinese capital flight is exaggerated

    - Mar 7, 2016 10:36am
    While financial markets have expressed concern about China’s rapid build-up of corporate foreign debt, estimated at US$1 trillion, or 9.3 percent of gross domestic product, many Chinese firms have started repaying their foreign borrowings since the second...
  • Could investors have nothing to fear but fear itself?Photo:

    World markets in crisis? It’s all in your head

    - Feb 16, 2016 10:32am
    Since the beginning of the year, sharp volatility and declines in the global markets have made investors confused. Are we heading into a global crisis? What has gone wrong? Is the market telling us something really...
  • The yen dropped the most in more than a year after BoJ chief Haruhiko Kuroda unexpectedly adopted negative interest rates, a move that may trigger a fresh round of competitive devaluations. Photo: Japan Times

    HK could be hurt as Japan reignites currency war

    - Feb 1, 2016 4:46pm
    The Bank of Japan’s move last Friday to implement a negative interest rate policy was taken by the markets as a positive step. Stock markets around the world jumped higher, and bond yields fell. However, it...
  • The linked exchange rate mechanism helps uphold international investor confidence in Hong Kong, say defenders of the city's currency peg. Photo: Bloomberg

    Why the USD currency link is still the best option for HK

    - Jan 20, 2016 9:21am
    Capital outflows from Hong Kong have accelerated recently amid concerns over China’s economy and the renminbi’s prospects. The outflows have forced the Hong Kong dollar exchange rate down by the biggest amount in 12 years in...
  • Kunming, which is only about 1,000 kilometers away from Hong Kong, plays a pivotal role in connecting China with Southeast Asia. Photo: InKunming

    How Hong Kong can benefit from Belt and Road initiatives

    - Dec 28, 2015 2:55pm
    Ignorance about how Hong Kong can leverage on China’s “Belt and Road” (BAR) initiatives, which is now the official name for the “One Belt, One Road” initiatives, comes from a lack of holistic analysis of the city’s...
  • Interest rates will be rising at the peak of Hong Kong’s property cycle. Photo: Bloomberg

    If you think HK can weather the US rate hikes, think again

    - Dec 18, 2015 9:46am
    Most analysts believe that Hong Kong can weather the series of interest rate hikes in the United States in the coming two years just like it did in the last Federal Reserve tightening cycle when rates...
  • The growth of railway passenger traffic reflects the boom in domestic tourism and personal travel in mainland China. Photo: epa

    Challenges abound, but China’s new economy is underappreciated

    - Dec 10, 2015 9:51am
    It is a maxim of today’s financial markets that we cannot trust Chinese economic data because the official statistics distort the truth by painting an overly benign picture. Consider this: the Chinese government tells us that...
  • It is far from certain that the US dollar would strengthen after the Fed rate hikes. Photo: Bloomberg

    What will happen to Asia when US starts hiking rates?

    - Nov 24, 2015 3:58pm
    The US Federal Reserve is almost certain to raise interest rates in its next board meeting on Dec. 16, with financial markets now pricing in a 75 percent probability of a rate hike. Meanwhile, market expectations...
  • Adding the reminbi to the SDR basket won’t have any material impact on international trade and financial transactions. Photo: Xinhua

    SDR or not, renminbi has long road ahead to true global status

    - Nov 16, 2015 5:34pm
    The International Monetary Fund (IMF) issued a new staff report on Nov. 13 supporting the inclusion of the renminbi in the Special Drawing Rights (SDR). Assuming the IMF executive board approves it at its meeting on...
  • It is uncertain whether the two-child policy will boost China's fertility rate. Photo: Reuters

    Can China’s new two-child policy save the day?

    - Nov 2, 2015 10:03am
    The sensational headlines by most media on China’s decision to abolish the one-child policy are way off the mark. Beijing has only shifted the policy to two children per couple from one child. The policy of...
  • If the current negative sentiment towards China does not change, market forces would push the renminbi down by about 3 percent year on year against the US dollar this year, and by another 3 percent next year. Photo: Bloomberg

    Why selling China short may not be such a smart move

    - Oct 22, 2015 9:20am
    China recorded the weakest GDP growth rate (6.9 percent year on year) since the global financial crisis for the third quarter of this year, fueling concerns about economic hard-landing and sending shock waves across the global economy....
  • Devaluation is not an effective tool for boosting Chinese exports and, hence, GDP growth. Photo: Bloomberg

    Why the renminbi ‘shock’ should be viewed positively

    - Sep 17, 2015 1:10pm
    The People’s Bank of China (PBoC) rocked global markets in August by suddenly changing the renminbi’s daily fixing mechanism, a move that led to a more than 3 percent depreciation of the yuan against the US...
  • China's devaluation of its currency is a step towards increasing market forces in renminbi trading. Photo: Bloomberg

    Why a large RMB devaluation is unlikely

    - Sep 7, 2015 10:02am
    Global financial markets nearly imploded when China changed its renminbi daily fixing mechanism in August, which led to a more than 3 percent devaluation of the currency against the US dollar. China’s economy is on the...
  • Since Tuesday, the renminbi is worth nearly 2 percent less against the US dollar. Photo: AFP

    Renminbi devaluation – what is the PBoC up to?

    - Aug 12, 2015 8:31am
    What is the People’s Bank of China up to? The PBoC surprised the market on Tuesday by changing the way the daily fixing rate for the renminbi is calculated, which effectively weakened the currency against the...
  • Rising stock prices (gains are shown in red in the mainland) provide ordinary Chinese with an opportunity to improve their income, reducing the likelihood of political and social unrest. Photo: Reuters

    Why is Beijing so keen to protect the A-share market?

    - Aug 3, 2015 10:54am
    Market researchers have come to a consensus that the bursting of the A-share bubble in June/July is unlikely to damage China’s economic and financial systems. Global financial contagion is also well contained, as the A-share market...
  • The three-week market correction was too short to have any impact on consumption. Photo: Reuters

    What’s the true risk behind the A-share market rout?

    - Jul 17, 2015 11:45am
    The 32 percent correction in the Shanghai Composite Index between June 12 and July 8 is not a harbinger for a financial crisis in China, as some have fear. It will not have a major impact on...
  • The PBoC's cuts at the weekend are not just an old-style bailout of the stock market but part of a strategy to restructure the economy. Photo: Bloomberg

    China’s two-prong monetary easing and the stock market

    - Jul 2, 2015 9:52am
    I do not intend to add to the market chatter over Saturday’s cuts by the People’s Bank of China of 25 basis points (0.25 percentage point) in lending and deposit rates and its 50 bps cut in...
  • Chinese President Xi Jinping poses for a picture with Asian officials following the launch of a new regional infrastructure financing bank in October last year. Photo: Bloomberg

    Why AIIB is important to China’s economic health

    - Jun 22, 2015 10:26am
    The Asian Infrastructure Investment Bank (AIIB) is only one of China’s financial initiatives designed to improve the regional investment landscape. Others include another development bank, the New Development Bank (NDB), and the Twenty-first Century Silk Road...