Economic systems

The US Capitol in Washington, DC, US, on 7 October 2021. (Stefani Reynolds/Bloomberg)

Why credit rating firms stay silent on the US's recurring sovereign debt woes

So far, Fitch is the only one of the “big three” credit rating agencies to release a statement raising the possibility of a review of the US sovereignty rating with negative implications. Financial commentator Tan Haojun says that the three agencies are giving the US a lot of leeway that would probably not be given to other countries, when they should be impartial and fair in giving a rating.
Two men have their breakfast on the street in an older neighborhood in Shanghai, China on 30 August 2021. Chinese President Xi Jinping chaired a high-level meeting that “reviewed and approved” measures to fight monopolies, battle pollution and shore up strategic reserves, all areas that are crucial to his government’s push to improve the quality of life for the nation’s 1.4 billion people. (Qilai Shen/Bloomberg)

Can China succeed in income distribution reform and get rid of its celebrity economy?

The assets of the top eight tycoons in the world have a combined worth of half the global population, says EAI academic Lance Gore, and the Chinese Communist Party faces a choice: Will China go down the old path of Western advanced capitalism, especially Anglo-American capitalism, and make the same mistakes as them? China has shown resolve in reforming its income distribution issues in various sectors including the entertainment industry. But it is not an easy path as vested interests may still interfere and the people can only rely on the self-purification of the Chinese Communist Party to uphold the regime’s people-centred nature.
A billboard featuring Chinese President Xi Jinping is displayed at a compound in Shanghai, China, on 30 August 2021. (Qilai Shen/Bloomberg)

A new paradigm needed: China cannot achieve 'common prosperity' with Marxism and class struggle

While Marxism failed 30 years ago in the case of the Soviet Union, the Chinese Communist Party of today claims that it owes its success to the “theoretical advantage” of Marxism. However, rather than hanging on to ideological orthodoxy, a revolution of ideologies is needed to steer the building of an inclusive and harmonious society undergoing the fourth industrialisation. In the new paradigm, much thought will need to go into thinking through knotty issues such as the role of the market in socialism, the value of labour in a hi-tech economy and the role that entrepreneurs can play as builders of socialism.
A sign indicating digital RMB is pictured on a vending machine at a subway station in Shanghai, China, 21 April 2021. (Aly Song/Reuters)

How China took the lead in the digital currency race

What’s the difference between virtual currency, digital currency, cryptocurrency, and e-money? In part 1 of his article on China’s digital currency ambitions, James Pang traces the development phases of China’s central bank digital currency DCEP amid a growing global appetite for central bank digital currencies. He also guides us through the jargon of the digital currency world.
A Chinese Yuan banknote is seen in front of displayed stock graph in this illustration taken on 7 May 2021. (Dado Ruvic/Reuters)

Will e-CNY spur the internationalisation of the RMB?

Academic Pei Sai Fan notes that China’s active promotion of the e-CNY has been closely linked to its ambitions of turning the RMB into a global trade and reserve currency. He says that the internationalisation of the RMB cannot be rushed. The more important thing for China to do now is to work on building its capabilities for crisis and risk management as well as gaining international support.
A man rides a bicycle along a street at the Raffles Place financial business district in Singapore on 20 April 2021. (Roslan Rahman/AFP)

Chinese financial institutions drawn to Singapore and Southeast Asian markets

With the signing of the Regional Comprehensive Economic Partnership (RCEP) and China's Belt and Road Initiative, a growing number of Chinese businesses are setting up outfits in Singapore, creating more opportunities for financial services providers from China. Associate business editor Hu Yuanwen takes a look at Chinese banking and insurance companies moving into Singapore, and how Singapore's business environment is changing.
The Singapore skyline, 31 March 2021. (Roslan Rahman/AFP)

Rich China tycoons park family offices in Singapore

Associate business editor Pang Kia Nian takes a look at the increasing number of wealthy Chinese setting up single family offices (SFOs) — entities that manage assets for one family and is wholly owned or controlled by members of the same family — in Singapore. What makes Singapore an attractive place for high-net-worth individuals to park their offshore assets?
A man walks past an Alibaba sign outside the company's office in Beijing, China on 13 April 2021. (Greg Baker/AFP)

Can private Chinese enterprises truly ‘develop boldly and with confidence’?

Amid punishments meted out to Chinese private enterprises such as Alibaba, President Xi Jinping’s recent visit to various private enterprises was seen as a way for the Chinese government to assure companies that the state would still be supporting them. However, the status of private enterprises has always been a little fuzzy in China. Companies feel that they are at a disadvantage when competing with state-owned enterprises and may be reined in when they grow too large. Zaobao associate editor Han Yong Hong looks for a way out.   
A woman wearing a face mask following the coronavirus disease (COVID-19) outbreak walks past a residential compound in Beijing, China, 11 August 2020. (Tingshu Wang/REUTERS)

The Chinese property bubble that just won't burst

While the Chinese government has implemented cooling measures including reminding people that property is “not for speculation”, it seems that people are not taking it seriously and still believe that property is a guaranteed investment. Zaobao correspondent Chen Jing takes the temperature of the Chinese property market.