When the Road Ends: Trump Moves Forward on Trade Agenda

ZH: Trump "Overrules" Cabinet, Prepares To Unleash Global Trade War
In a plan pushed by Commerce Secretary Wilbur Ross, and backed by chief strategist Steve Bannon (not present at the meeting), trade policy director Peter Navarro and senior policy adviser Stephen Miller, the United States would impose tariffs on China and other big exporters of steel. Neither Mike Pence nor Jared Kushner weighed in either way.

Everyone else in the room, more than 75% of those present, were adamantly opposed, arguing it was bad economics and bad global politics. At one point, Trump was told his almost entire cabinet thought this was a bad idea. But everyone left the room believing the country is headed toward a major trade confrontation.
How many economic models are stress tested for politics?

From 2014: The Logic of Strategy: Yuan Devaluation and the Road to Trade War
The protectionists are ever so slowly gaining the upper hand thanks in part to negative social mood. 2008-2009 will probably mark the peak moment for Wall Street and the Treasury Department, even though there is as yet no sign of it in Washington. Changes can be seen in the form of issues such as immigration, which has turned the grassroots of the conservative movement against the Chamber of Commerce and large corporations (due to an attack initiated by the latter against the former). This has pushed the Overton window of acceptable debate among conservatives who can now take shots at big business. There is also the growing libertarian faction pulled together by Ron Paul that supports his son, Rand Paul, that consistently attacks the Federal Reserve and Wall Street. Put it together and it is not hard to envision an anti-Wall Street, pro-manufacturing political consensus emerging. This will cut across party lines, with manufacturing unions pulling in Democratic support if there are specific bills to vote on.
There are many potential paths, but the world has been adhering to the general path predicted by a major negative wave of social mood.


Zhengzhou: Sunac Slashes Prices 20pc, Demands 100pc Cash

Caijing: 调控下房企求生样本:融创郑州降价20% 要求全款购房
June 24, Zhengzhou Sunac as a new opening of a lake. In the surrounding high-level housing prices average price of 13,000 yuan / square meters above the market, like the lake one high-level average price of 10,000 yuan / square meter, down 20%. But Sunac made an all cash purchase prerequisite. Reporters on June 27 repeatedly call the sales office were no answer.

Informed sources, the recent financial development of two real estate promotions. In addition to the above as Lake One, there are Tianjin Rongyuan. Reporters call the project sales office was informed that last year opened in September to sell a group with 28,000 yuan / square meter decoration, and now only sold rough 24,000-25,000 / square meter.

...Not only Zhengzhou, June 25, Shijiazhuang a low-key opening of a project, hardcover high-level about 15,000 yuan / square meter, houses 15,500 yuan / square meter, lower than the expected price of about 15%. It is understood that the project surrounding the rough price of the project, the basic in the 16,000 -2 million / square meter range. Beijing surrounding Yanjiao, there are housing prices have been reduced by five or six thousand yuan / square meter, the decline is about 20% -30%.
The article speculates that the cuts stem from cash flow problems at Sunac, along with the desire to quickly move property in markets with slackening demand.

Li Keqiang Says Foreign Profits Can Leave Anytime

Rebutting the April news of multinationals being asked to stop capital outflows, LI Keqiang said companies are free to take profits out of China. Though perhaps the key word in that sentence is profits.

iFeng: 李克强保证外企利润自由进出 一条不成文规定早已松动
Speaking at the World Economic Forum's 2017 New Champions' Annual Meeting (also known as "Summer Davos"), Chinese Premier Li Keqiang said: "We encourage foreign-funded enterprises to stay in China to invest in China, Of the profits in China to reinvest, will create more lucrative profits, of course, I also assure you that all foreign - funded enterprises as long as the profits made in China, you can freely in accordance with your wishes free access, there will be no restrictions.
Turning to Chinese firms, the article says capital controls are easing:
The lawyer told the first financial reporter, starting from April last year, every month have a certain amount of foreign exchange restrictions, this is an unwritten rule.

And now, they told the first financial reporter, this situation has begun to improve.

Zhan Xiaoning, director of the United Nations Development Program (UNCTAD), told the first financial reporter that China's policy environment for foreign investment is now in an important transitional period. One is from the traditional foreign management system to the new negative list based on the open foreign investment management system transition; the second is from preferential policies to investment facilitation-oriented transition. The overall direction of China's investment environment is to be further liberalized and facilitated.

He said that the "foreign investment industry guidance catalog" in the ban and restrictions on the continuous decline in industry, the service sector and the original restrictions on foreign investment in some manufacturing industries to increase the intensity of foreign investment. At the same time, the investment environment is optimized and facilitated. The establishment of foreign-funded enterprises outside the negative list from the approval system to the filing system, foreign-funded enterprises unified registration of capital system and the promotion of fair competition within the domestic and foreign enterprises, have further improved the foreign environment. Which are conducive to the growth of foreign capital inflows.

Facing the future, Zhan Xiaoning told the first financial journalists that the rapid growth of China's foreign investment reflects the objective needs of Chinese enterprises to become international and participate in international competition. With the "one way" and the international production capacity to promote cooperation, China's foreign investment is expected to remain at a high level.
And back to Li:
Li Keqiang said that these years, in the face of economic downward pressure, we did not take the "flood irrigation" type of strong stimulus, nor follow the excessive dependence on investment, consumption of resources, the traditional way of development, but through reform and innovation, Economic growth from the past too much rely on investment, export-led, to rely more on consumer-driven, service industry and domestic demand support. Last year, the contribution of consumption to economic growth rose to 64.6%, becoming the main force of economic growth; the proportion of added value of services increased to 51.6%, accounting for half of the country; the difference between current account and gross domestic product fell to 1.8 %, Domestic demand has become a ringing pillar.

Behind the above changes, highlighting China's economic structure and quality of the change and enhance the economic growth has also maintained a stronger stability and sustainability.

Li Keqiang said that China will continue to maintain a healthy monetary policy in the future, and to promote production and other structural reforms.


FRED on Chinese Economic Data

FRED: China's Economic Data: An Accurate Reflection, or Just Smoke and Mirrors?

As soon as economists start altering data, even something as simple as seasonality, they are deviating from reality. Some Chinese data points are more suspect, such as GDP, but then all GDP is somewhat suspect given the major revisions that take place.

The more skeptical you are of Chinese data, the more it makes a case against economic planning and the field of economics. If its all fabricated numbers and they're achieving real growth, then why even keep statistics? It brings to mind this paper on Hong Kong: GOVERNMENT WITHOUT STATISTICS: POLICY-MAKING IN HONG KONG 1925-85, WITH SPECIAL REFERENCE TO ECONOMIC AND FINANCIAL MANAGEMENT.

Also: Freedom Works: The Case of Hong Kong
The laissez-faire attitude of the Hong Kong government on economic matters was cemented by Sir John Cowperthwaite, the colony’s financial secretary from 1961 to 1971, whom Welsh called a “political economist in the tradition of Gladstone or John Stuart Mill” and the personification of “unreconstructed Manchester-school free traders.” Cowperthwaite had almost complete control of Hong Kong government finances and used it to implement his policy of “positive nonintervention.” Friedman gave Cowperthwaite a great deal of the credit for Hong Kong’s success, citing approvingly Cowperthwaite’s refusal to collect most economic statistics on the grounds that “[i]f I let them compute those statistics, they’ll want to use them for planning.”
The most important data point is debt. How much of Chinese economic growth is tied to an expansion of credit? How much will survive a downturn in the credit cycle?

HK Microcaps Plummet

Bloomberg: Hong Kong Small Cap Stock Plunge Wipes Out $6.1 Billion in Value
A string of Hong Kong stocks suddenly plunged Tuesday, with traders pointing to links between some of the companies and a brokerage that’s under regulatory investigation.

Seventeen firms tumbled by more than 40 percent at the close, losing a combined HK$47.8 billion ($6.1 billion) in market value. China Jicheng Holdings Ltd., an umbrella maker, and GreaterChina Professional Services Ltd. sank more 90 percent. Lerado Financial Group Co., whose shares were halted by Hong Kong’s securities regulator this month, has previously disclosed an investment in China Jicheng and an underwriter role on a GreaterChina share placement in 2015.

...The S&P/HKEX GEM Index sank 9.6 percent, its biggest retreat since August 2015, and closed at its lowest level on record. The gauge has lost more than 90 percent since 2000.


Mistress Dispelling in China

China’s Mistress-Dispellers
A week after his first visit, Yu went back to the store. He had heard that Wang had recently purchased property nearby, and he let drop that he was looking to buy an apartment in the neighborhood. She offered to take him on a tour and introduce him to agents with properties to sell. In the course of several weeks, Yu and Wang started getting meals together, and eventually Yu invited her to Shanghai for a weekend sightseeing trip. She demurred at first but later accepted, on the condition that she could bring a girlfriend along.

Using his client’s money, Yu put the pair up at a hotel, showed them the city, and took them to sample its culinary specialties. On Shanghai’s famous river promenade, Yu took pictures of the two women and then got the friend to take several of him and Wang with their arms around each other. Once the weekend was over, these pictures found their way to Wang’s boyfriend. “A picture speaks louder than a thousand words, and, in a jealous man’s imagination, it can speak ten thousand,” Yu told me. The man ended the relationship, and returned to his wife, appreciative, if nothing else, of her loyalty. The mission had taken around four months in all.

Beijing Subway Pushes Smartpass

Caixin: Beijing Subway Wants to Go Cardless
Beijing’s subway authorities are trying to get more people to use their smartphones to pay for metro fares amid the explosion in China’s digital payments market.

As far back as 2013, subway stations across the capital were equipped with the technology to accept mobile phone payments, but only 1 million commuters — a fraction of the passengers who take the metro every day — have used the service so far.

One reason for the feature’s low popularity is that it requires mobile phones to have a special SIM card with embedded NFC (near-field communication) technology.

Since last year, more phone makers have been adding an NFC component to their handsets. Now, there are more than 160 phone models that can be used for card-free payments and don’t require the user to buy a special SIM card.


Scholar Says Current Regulatory Framework Can't Stop Local Debt Buildup

An increasingly visible evidence of renewed signs of local government debt indicates that the relevant documents in recent years and the debt management framework established by the new budget law are still inadequate. If the capital budget process and the comprehensive financial commitment control system are not introduced as soon as possible, the trend of debt expansion and financial risk spread will be difficult to be effectively curbed.

Objective analysis, China's existing debt management framework is not sufficient.

Since the audit conducted a comprehensive audit of government debt in 2013, the government's senior management in the face of debt control, the continuous introduction of dozens of related documents. The new budgets that were implemented in 2015 also rarely set out many of the terms of debt management. Today, despite the basic framework is ready, senior management debt determination and efforts remain unabated, the relevant policy documents continue to be frequently introduced is proof.

Who Gets Dongbei Steel?

EO: 东北特钢关键一周:破产可能性不大,谁会最终接盘?
Northeast special steel time is running out.

July 10, is the Northeast Special Steel Group and the bankruptcy administrator to Dalian Intermediate People's Court to apply for a second extension of the draft deadline for submission of reorganization plan.

According to Article 79 of the Bankruptcy Law, the debtor or the manager shall submit the draft of the reorganization plan to the people 's court and the creditors' meeting within six months from the date when the people 's court determines the debtor' s reorganization. If the prescribed period expires, the people 's court may adjudicate for a period of three months if the debtor or the manager requests and has justifiable reasons. Where the debtor or the administrator fails to submit the draft plan for reorganization, the people 's court shall decide to terminate the reorganization procedure and declare the debtor bankrupt.

On July 10, it was the law that allowed the final deadline for the reorganization of the Northeast Special Steel.

From October 10, 2016 to July 10, 2017, a total of 273 days, which is the process of the Northeast special steel reorganization cycle. During this period, around the reorganization, the parties to the Northeast Special Steel and strategic investors and many creditors negotiations stalemate.

Inside the Northeast Special Steel, on the strategic investors, that is, the reorganization of the acquisition of who is who, has been rumors constantly.

On 21 June, an unnamed person from the subsidiary of the Northeast Special Steel Company told the Economic Observer that since the end of last year, the Anshan Iron and Steel Group and the Northeast Special Steel have been in constant contact with each other during this period. Anshan Iron and Steel can pick up the rumors of the Northeast Special Steel.

The company where the people, during this period with a total of two positive contact with Anshan Iron and Steel, respectively, the Northeast Iron and Steel Company of the assets of the assessment and audit. The person reported to the Economic Observer, in addition to Anshan Iron and Steel, there is no other intention to investors at the level of the subsidiary had a similar contact.

Top or Not? Chinese Media Discuss Housing

The PBoC second quarter depositor survey is being cited as evidence the buying restrictions aren't dampening demand. (Coverage of survey here.)
iFeng: 史上最严调控浇灭买房人的热情?央妈给出意外答案

A separate article says the turn in first- and second-tier cities is clear.
"As the current market trading volume in the overall low level, can basically determine the June market transactions compared to May basically flat, narrow range." Yan Yue Jin that the recent part of the city for the control policy began to "patch ", Which will be the corresponding urban housing transactions in different directions, varying degrees of impact.

"The country has more than 36 cities 'limited sales', is becoming the current local market regulation and control of new ideas, has also become the round from March to start the national multi-city regulation and control of new features. There are more cities in the future will be implemented" Zhang Dawei told reporters, "inventory data has been a 21-month low, is expected in 2017 the real estate market is difficult to optimistic in the whole year, especially in the third quarter of the year," Zhang Dawei told reporters that the new control measures, a certain period of time limit transfer, can effectively reduce speculation. The traditional off - season will appear more obvious cooling performance.
iFeng: 一二线城市楼市量价双跌“拐点”初现

Some developers are back to using stealth price increases via charges for decorating and furnishing a new apartment.
However, in some places the limit is not true price. Recently reported that there have been some developers in Guangzhou through the "double contract" to circumvent the government limit policy, making house prices down, not only significantly increased the proportion of buyers down payment, but also makes the net sign price and the actual sales price Far away, leading to distortion of official data on primary housing prices.

The so-called "double contract" is two contracts, one is required to sign the purchase contract, the other is the decoration contract, the amount of the two contracts together is the total purchase price, and decoration contract amount can not be loan, The down payment in the purchase contract is paid together. This practice in 2013 that round of property market regulation in the more, then the local government introduced a regulatory policy to put an end to this phenomenon.

At present, Beijing, Shanghai, Nanjing and other cities limit the price effect is obvious, the market has cooled. As a result of strict regulatory policy, housing sales are more formal, there is no "double contract" phenomenon, so the net sign price can more accurately reflect the actual transaction price. However, in some second-tier cities and three or four lines of the city, "double contract" phenomenon is not uncommon, in addition to bundled with the construction or fine decoration, even more simply net sign a price, the actual sales is another price.
iFeng: 二三线城市双合同致房价明降暗升 地方监管应动真格

SOEs Inflating Profits

SCMP: Audit report reveals China’s economic fault lines
An official audit report published on Friday said that 18 of the 20 state-owned firms that were audited have in recent years inflated their revenues by more than 200 billion yuan (US$29 billion) and boosted their profits by 20 billion yuan with faked business and manipulated books.

The companies audited include China National Petroleum Corporation, China State Shipbuilding Corporation and Sinochem Group.
Much of China’s spectacular growth has been fuelled by lending.

Lu Zhengwei, chief economist from Industrial Bank, said that although the fake profits only accounted for a small proportion of total takings at the country’s state-owned entities – less than 2 per cent – it showed the problems they had deleveraging.


Beijing Has Mortgage Lending Standard: 25pc Total Lending

Mortgages only accounted for 28 percent of new lending in May, a new all-time low. Banks have a minimum standard of 25 percent. Since mortgages are 28 percent through May, they'll have to fall to 21 percent for the rest of the year. The lending standard could also crush credit growth rates.
At the end of May, individual housing loans increased by 90.76 billion yuan compared with the beginning of the year . The proportion of newly added loans was 28% , which was lower than that in the first quarter of 2017 (37.6%) and 2016 (47%), down 9.3 and 18.7 percentage points, trending towards a reasonable ratio.
According to the report, Beijing banks have a target for mortgage lending: 25 percent of new lending. Since the ratio is 28 percent at the end of May, it requires a decline to 21 percent in the rest of 2017.

From January 2017 onwards, the People's Bank of Operations in the MPA assessment to further highlight the credit policy-oriented effect assessment, in accordance with the macro-prudential requirements, to join the individual purchase loan growth factor, the Beijing area of ​​all banks strict control of individual purchase loans Accounting for the proportion of all new loans, and the annual control target is determined to be about 25% of the reasonable level.

From the implementation of the situation, the first quarter of 2017 new personal purchase loans accounted for 36.1% of all new loans fell sharply from the fourth quarter of 2016 proportion of 67.4%, down about 31 percentage points. Especially as the main bank in Beijing, the main bank more obvious: ICBC Beijing Branch fell to 24%, Construction Bank Beijing Branch fell to 29%, Bank of China Beijing Branch fell to 15%, Agricultural Bank of China branch in Beijing fell to 35% , China Merchants Bank Beijing branch fell to 23%.

From these two words can be found, the Beijing area for the new mortgage accounted for the minimum standard control at 25%.

According to the May data, the current Beijing new mortgage accounted for 28%, if you want to reach 25% level, what will happen next?

According to the previous year lending of 605.9 billion yuan, and a 10% new loans growth rate, we estimate that in 2017 Beijing new loans may reach about 660 billion. 25% of that is 165 billion, that is, Beijing's new mortgage size to control the level of 165 billion or so.

The first five months, Beijing banks have issued 90.7 billion housing loans, then that is, the next 7 months left 165 billion -90.7 billion = 74.3 billion or so the amount of loans.

Just to say, if the remaining 7 months to 2016 all new loans for the base calculation, according to 10% growth rate, then all the loans may also be issued about 340 billion.

In this case, 74 billion (74.3 billion) accounted for only 21.7% of the 340 billion, that is, if the future to achieve 25% of the new housing loans accounted for the target, the remaining 7 months, the proportion of mortgages in total lending can not exceed 21%.

To know that the 25% threshold can be said to be a minimum standard, if more than expected, then the future does not rule out the individual months of the new mortgage accounted for less than 15%, or even lower.
Beijing lending was 324 billion in the first five months. Plus 340 billion for the rest of the year comes to 664 billion. However, what if banks can't offset the decline in mortgage lending? We'll find out very soon if there are other borrowers prepared to step in to the gap created by the slowdown in mortgage lending.

iFeng: 楼市传来大消息:房贷数据创新低 房价受影响大


China Chooses Deflation, For Now

Bloomberg: China's Banking Regulator Seeks Details of Wanda, Fosun, HNA Loans
The China Banking Regulatory Commission asked some banks to provide information on overseas loans made to Dalian Wanda Group Co., Anbang Insurance Group Co., HNA Group Co., Fosun International Inc. and the owner of Italian soccer team AC Milan, according to people familiar with the matter.

The inquiries, which come a week after reports of an investigation into Anbang’s chairman, are likely to put a further chill on China’s outbound takeovers after tighter capital controls cut deal activity this year by 56 percent from the same period in 2016. By targeting some of the country’s most powerful tycoons, Xi Jinping’s government may be sending a signal of its commitment to cleaning up the financial system before a key Communist Party leadership reshuffle later this year.

“We are now in an environment where preventing financial risks is lifted as the top priority, so I think the regulators are trying to gauge the total exposure,” said Wei Hou, a Hong Kong-based analyst at Sanford C. Bernstein. “Regulators must have seen some red flags.”

...Shares of billionaire Guo Guangchang’s Fosun and related companies tumbled in Hong Kong, mirroring a similar rout at units of Wanda. Fosun International fell as much as 9.6 percent, while Shanghai Fosun Pharmaceutical Group Co.’s dropped as much as 7.8 percent.

Wanda Film Holding Co. tumbled as much as 10 percent in Shenzhen, its biggest loss since January 2016, before its shares were suspended from trading. Wanda Properties International Co.’s 2024 notes plunged as much as 10.7 cents on the dollar to 101 cents in morning trading in Hong Kong, the biggest drop on record, according to Bloomberg-compiled data.

“I don’t think it’s the right time to invest or buy into these companies,” said Alex Wong, a director of asset management at Ample Capital Ltd. in Hong Kong. “Sometimes this kind of event can accelerate very quickly.”
The ChiNext fell 1.44 percent on the day, all of it in afternoon trading following the news.


Will China Run out of Reserve? What's Your DXY Target?

CFR: China Isn’t Going to Run Out of Reserves Anytime Soon
At the same time, I think the evidence continues to mount that the scale of outflows is significantly a function of expectations—so the best way to limit outflows is simply to hold the exchange rate stable for an extended period of time (technical note: China has an ongoing current account surplus, so stable reserves imply ongoing outflows at a modest pace).
China merely provides the fundamental backdrop. This is entirely a story about the U.S. dollar. If the U.S. dollar declines, then China dodges a bullet. Global credit growth will revive, global economic growth will follow, the U.S. dollar will decline. If instead credit growth remains tight, global economic growth will disappoint, and the U.S. dollar will rally.

23.1pc of Depositors Plan to Buy Home in Next 3 Months, New High

The PBoC Q@ surveys are out. Depositor sentiment declined slightly from Q1. The number the press locked onto was 23.1 percent of depositors saying they plan to buy a house in the next three months. It was the highest total ever recorded.

The question asked was: do you have any big spending plans in the next 3 months? Respondents could choose more than one. Travel was tops at 33.6 percent, education 26.2 percent, healthcare 23.6, big consumer item 23.3, house 23.1, entertainment 18.3, insurance 14.6.

iFeng: 央行:23.1%居民准备未来3个月买房 比例创新高
PBoC Depositor Survey: 2017 年第二季度城镇储户问卷调查报告 (pdf)

The banker survey shows bankers more confident about the macro economy, but the only time they were less pleased with monetary policy was in 2011.

Banker Survey: 2017年第二季度银行家问卷调查报告 (pdf)

Entrepreneur confidence is at its highest level since the first quarter of 2014. The foreign and domestic orders index crossed 50 percent, the first time in at least 3 years. The last time these were well above 50 percent was in 2011.
Entrepreneur survey: 2017年第二季度企业家问卷调查报告 (pdf)


MSCI Adds China to EM Index at 0.7pc

Marketwatch: MSCI to add 222 China A shares in emerging-markets index
The move, which was widely anticipated, could trigger an inflow of as much as $210 billion into China’s equities over the next five years, according to Goldman Sachs.

“This is a significant and highly symbolic recognition of China’s importance to the global economy, and a big vote of confidence in the Chinese growth story from MSCI and its clients,” said Danny Dolan, managing director of China Post Global, in emailed comments.

Even so, the immediate impact on the Chinese stock market from portfolio rebalancing following MSCI’s announcement is likely to be muted, according to Capital Economics.

“What’s more, a steady increase in the inclusion of A-shares in the MSCI Emerging Markets Index will probably only happen if China continues to liberalize her financial markets, including granting greater access to foreign investors and addressing fears over capital controls,” said John Higgins, an economist at Capital Economics, in a note.

Housing Bubble Fallout: Fake Divorces Turn Real

iFeng: 一次假离婚,相当于增加10年收入!有人这样做,结果悲剧了
Reporters learned from the Beijing Municipal Civil Affairs Bureau, 2014 to 2016, three years of marriage remained stable, are about 170,000 pairs. However, in the case of a generally stable number of marriages, the number of divorces increased year by year, reaching 97,600 in 2016, up 73% from 2014. At the same time, in 2016 Beijing recruits the number of 22,607 pairs, up 131% over 2014.
As you might guess, couple that had a "fake divorce" sometimes ended up with a real divorce. There are 3839 cases in the courts involving "fake divorces."
Huge interest in the temptation to leave a divorce to buy a house seems to be a "smart" choice. But economics has a common sense, the proceeds are proportional to the risk, the other side of the high-yield divorce is high risk. Each microblogging (micro-signal: nbdnews) to "fake marriage" as the key word in the Chinese referee document network search found that the relevant litigation ruling reached 3839.

In many cases of divorce due to fake divorce, the most tragic is undoubtedly due to false divorce finally fake into a real, wealth and two empty.

According to the information Times reported that in order to avoid bank credit policy and property purchase policy, Guangzhou, a man Chen Liang and married seven years wife Liu Fang "fake divorce", also signed a "net income" divorce agreement. Guess his wife fake play really do not want to be remarried to be sued.

August 2015, Chen Liang and Liu Fang ready to jointly buy a room in Guangzhou Nansha and pay the deposit and the first payment, but Liu Fang told Chen Liang, because Chen Liang personal credit records caused by his name can not be signed in the purchase contract The To this end, Liu Fang asked to "fake divorce" approach to circumvent the purchase policy to buy the room. The next month, the two divorce procedures, and in the Civil Affairs Bureau signed a divorce agreement. The same month on the 30th, Liu Fang and developers signed a contract to buy the room.

After Liu Fang explicitly refused to remarry, and refused to return all belong to Chen Liang's share of the property. Two of the "divorce agreement" this agreement: Foshan, a room and a room owned by Guangzhou Liu Fang, Chen Liang voluntarily give up belong to the property under the name of Liu Fang; daughter by Liu Fang to carry support, Chen Liang monthly maintenance fee 1500 yuan.
The courts response to fake divorces that turn real: tough shit.
In September 2016, Chen Liang sued the court Liu Fang, asked the court to revoke the "divorce agreement" to change the custody of her daughter, and confirmed that the two suites in Foshan and Guangzhou jointly owned by both sides.

The court of first instance that, according to the marriage law, divorce procedures only for both men and women can voluntarily, no need to review whether the feelings of the two sides rupture, do not consider the reasons for divorce between the two sides, so Chen Liang Liu Fang for divorce registration date has been dismissed The Chen Liang advocated the "divorce agreement" there is fraud, the court held that Chen Liang, Liu Fang has reached a consensus on whether the divorce, and the civil affairs department audit, even if Chen Liang is due to avoid the purchase policy and divorce registration, Is the two sides agreed to divorce to avoid policy, so there is no fraud. Chen Liang said the two sides had agreed to buy a house after the remarriage, but now Liu Fang does not agree to remarry, that she is not voluntary consent to remarry, so even if the two sides have agreed to remarry, the agreement because of the voluntary and invalid. And the issue of child support and property division, Chen Liang failed to prove that the two sides had other agreement on the issue or with other conditions.

Accordingly, the first instance ruling dismissed all of Chen Liang's claim. Chen Liang appeal, the second instance dismissed the appeal to maintain the original verdict.

"Marriage Law" clearly stipulates that both men and women voluntarily divorced, allowed to divorce. As long as the legal requirements of the divorce conditions, the implementation of the relevant procedures, with legal effect. In other words, even if the parties exist false divorce, divorce registration has also been effective, unless it can prove that "divorce agreement" is not its true meaning that.

Fujian Linhui law firm director Lin Minhui lawyers said that whether it is true divorce or false divorce, as long as the two sides in the divorce process is true and voluntary, without any side of the coercion, coercion, divorce is effective and irrevocable.


Streaming Video of Lujiazui Forum

Coverage of speeches and updated news.

Scroll down to see Zhou Xiaochuan's speech, broken into various posts.

2017年陆家嘴论坛 周小川释放什么信号?

Teapot Refiners Start Price War on Refined Products

Looks like Chinese crude inventory could be coming down amid a price war between the oil giants and teapot refiners.

iFeng: 罕见的成品油价格战 中石油和中石化这对巨头怎么了?
Oil products analyst Hu Huichun said to China News Network, resulting in the current price of melee situation, the main reason is more and more refining enterprises to obtain the right to use crude oil imports, making gasoline and diesel production increased significantly. At the same time, private refineries lose the right to export refined oil, resulting in oversupply, its refined oil inventories can only be digested in the country.

In the past, local refineries imported crude oil use rights and crude oil import rights are restricted, in order to use imported crude oil, subject to the oil, petrochemical and other large central enterprises. Beginning of last year, the state gradually release the relevant restrictions. As of March this year, the country a total of 18 local oil refining enterprises have been the right to import crude oil, began a large number of imported crude oil processing.

From the customs data released, China's crude oil imports rebounded sharply in May, the average daily imports of 37.2 million tons, becoming the world's largest oil importer. Another data show that last year the national refining refining capacity of the total capacity of about 30% of the total oil refining capacity.

China University of Petroleum Professor Dong Xiucheng that, compared to private enterprises, PetroChina Sinopec's organizational structure is complex, the gas station itself without adjustment of the right price, the market reflects the low sensitivity, can not be as private enterprises as the rapid adjustment of prices, the lack of price The advantages of attracting customer capacity correspondingly weakened, so its sales will be affected by private enterprises. Sinopec's quarterly report shows that retail sales fell to a three-year low in the first quarter of this year.

IHS Markit senior oil researcher Yan Kefeng also told Reuters, "teapot refinery" (referring to private refineries) overcapacity is eroding Sinopec, PetroChina two giants of the market share.

Faced with the impact of private refineries, PetroChina, Sinopec chose to join the price war. Dong Xiucheng that "two barrels of oil" through the price war, the market share to rise and the inventory can be effectively consumed, oil prices will return to normal prices.


Chinese Home Prices Still Rising in May, Top Cities Show Signs of Exhaustion

Chinese new home prices climbed 0.74 percent nationally in May. Smaller cities saw the largest increases, such as 3.4 percent in Bengbu. The count of cities with rising prices dropped by two as the market is clearly plateauing. Price follows volume.

Top-tier plus Xiamen accounted for only 1 percent of the increase. They're down to 10 percent of the 9.5 percent yoy national price increase.
The seven hot tier-two cities I track declined in May, and they only account for 16 percent of the national increase yoy.

Measures such as the converted housing regulations and changes to school admission policies in Beijing did bite into existing home prices. Nationally, existing home prices rose 0.57 percent in May, 7.8 percent yoy.
The top-tier and Xiamen saw an average price decrease. Combined with the seven tier-two cities, these 12 accounted for only 4 percent of the national existing home price increase in May.

NBS: 2017年5月份70个大中城市住宅销售价格变动情况


Analysts See Mortgage Slowdown, Rate Hikes Due to Lack of Capital

iFeng: 银行真没钱了 北京首套房贷已基准利率为主优惠绝迹
Hai Tong Securities macro bond analyst Jiang Chao believes that mortgage interest rates soared mainly because the "bank without rice pot." According to the study, "in 2016, the bank can be in the financial markets through the same industry deposit at 2.8% interest rate, so the 4.9% loan interest rate, even if the mortgage interest rate hit 8 fold is also profitable to the first quarter of this year Interbank deposit rate rose to 4.5%, so the bank mortgage interest rates began to play 9 fold, 95 fold to make up for the cost rise. But in April and May after the bank's interbank deposits are made, the banks themselves have no money, then how to issue mortgages?"

Jiang Chao believes that the rise in lending rates, loans to shrink, means that the impact of financial leverage will be transferred from the financial market to the real economy. "Credit contraction is the biggest risk in the second half of the year." In the first half of 17 years, although the economy appears to see signs of falling, but only slow slowdown, because the financial leverage is only in the financial market, mainly for the currency and bond interest rates rise Commercial banks are still expanding, lending rates and loan payments remain stable, but with the shrinking distribution of interbank orders, which means that commercial banks began to shrink, lending rates rose sharply, and the payment of loans began to shrink, which means that The impact of financial deleveraging will be transferred from financial markets to the real economy, and credit contraction will be the biggest risk of the economy in the second half of the year.

A publicly traded bank insider told reporters that the bank mortgage interest rates rise, not only because of the national real estate macro-control factors, may be because "the banks really have no money." "Banks are still more likely to lend to buyers because mortgages are among the lowest risk classes in bank loans, with low default rates and bad debts, which are fundamentally high quality assets."

The above-mentioned joint-stock bankers believe that the situation of financial deleveraging, interbank deposit, outsourcing business are in recovery, plus the central bank MPA assessment, the major banks are tightening. "Mortgage rose the fastest, roughly the financial business and interbank deposit business done better bank."


Socionomics Alert: Republican Confidence Converging With Democrats

Republicans and Democrats flipped positions in consumer confidence surveys following the presidential election. Independents drove the overall rise.

Now Republican and Independent confidence is starting to crack.

ZH: Republicans Crack - UMich Confidence Slumps To Lowest Since Trump Elected
While this break corresponds with James Comey's testimony, only a few consumers spontaneously referred to him or his testimony when asked to explain their views.

Importantly, the decline was observed across all political parties, but the loss in confidence among self-identified Republicans since June 8th was larger than among Democrats (9.2 vs. 6.8 Index-points), with Independents showing the greatest falloff (11.5 Index-points).

The size of the partisan difference between Democrats and Republicans in the Expectations Index, however, was largely unchanged (55.6 Index-points prior to June 8th, and 51.2 after).

The recent erosion of confidence was due to more negative perceptions of the proposed economic policies among Democrats and the reduced likelihood of passage of these policies among Republicans. Fortunately, a strong job market, improved household income and wealth have provided a financial buffer against rising uncertainties.

Nonetheless, consumers have become less optimistic about the future course of the domestic economy. Even with the expected bounce back in spending in the current quarter, personal consumption is expected to advance by 2.3% for all of 2017.

How To Find A Good Chinese Company

Find the ones that stick to their core business.

Caixin: Steel-Maker Shagang Changes Tack With Internet Acquisitions
Chinese steel-maker Jiangsu Shagang Group has made a significant $3.8 billion deal to buy two internet data firms, including the owner of Global Switch, as the firm seeks to explore new industries amid ongoing overcapacity within the steel sector.

Shenzhen-listed Shagang, which supplies specialized products to infrastructure and vehicle builders, said it planned to acquire Jiangsu Qingfeng Investment Management Co. Ltd. and Beijing Daily Tech Co. Ltd. for a combined 25.8 billion yuan ($3.8 billion).
High debt levels are hardening the political and culture forces that prevent companies from failing. I associate this type of complete business shift with OTC penny stocks in the U.S.

At least in this case it sounds like they have some experience:
Shagang’s move to open up a new revenue channel in data is also a result of the emerging boom in online steel trading platforms. There are about 300 such platforms in China, with one of the largest being Ouyeel, of which Shagang is a shareholder.

The Meddle Kingdom

The Economist: Australia battles Chinese political influence
China is Australia’s biggest trading partner and its second-biggest source of immigrants (after India). Almost 160,000 Chinese students study in Australia; rich Chinese also see the country as a haven for investment. All this, argues Rory Medcalf of the National Security College in Canberra, gives China’s authorities a natural desire to influence Australian policy and in particular to weaken its ties with America.
I can't tell you when you will win, but if you want to win political office in the future, stake out the most extreme nationalist position on issues of trade, security and immigration today.


China Housing Cooldown: This Time It's Different

According to CASS data:
The median price of the above cities (Beijing, Shanghai, Guangzhuo) in May were 61685 yuan per square meter, 54458 yuan, 22,273 yuan, respectively, compared with April decreased by 3.2%, 0.4%, 0.5%. Another first-tier cities in Shenzhen, the median price of 50423 yuan per square meter, up 0.5%.
According to this table, Beijing prices are down 4.09 percent, nearby Langfang's average price fell 8.54 percent. The table also shows year-on-year prices are still upwards of 50 percent in many areas.
Media prices declines are also ugly in surrounding cities:
Some cities in the surrounding areas prices are also declining. In May Tianjin, Shijiazhuang, Foshan, Langfang median home prices were down 4.2%, 0.48%, 9.1%, 8.4%.
This next chart is a plot of home price changes since the start of the year (X-axis) against sales area (Y-axis). The first tier cities are all in the bottom except Guangzhou, while both Shenzhen and Guangzhou prices are down YTD. Many of the "hot" second-tier cities are in the bottom left quadrant: falling sales and falling prices. Other second-tier cities are in the upper right. Sanya is the outlier city with sales growth of almost 100 percen sales and prices down more than 10 percent; Nanchang has soaring prices, but flat sales. The chart is from China Index Academy and Tianfeng Securities Research Institute.
From the current indications, 2017, the mortgage market and then 2016-like surge in the probability of almost zero.

"At present, the national financial and real estate industry regulation, interest rate difference and market demand are playing with each other.As a whole, this year the total amount of bank lending compared to last year, the increase will be shrink."

Supervision of the year, the market year. Last year, the property market hot, loose credit environment is the main reason. And now mortgage interest rates raised, resulting in increased purchase costs, or will become the development of the property market this year, a key factor in the development.

In fact, because the central bank to tighten liquidity, the bank to obtain capital costs are rising, if you continue to maintain mortgage discount, the bank will be unprofitable. So, if the central bank does not relax monetary policy, the future will be more and more cities to raise mortgage rates. The property market or facing a new era, is the real estate speculators "warm boiled frog." If you this time, but also hope that the next two years, housing prices rose, and accordingly investment, is likely to fall into the trap of liquidity crunch.
Is this time really different? Maybe for developers. Maybe.
This time is not the same, will developers have a bad second half?

Yiju Property Research Institute has developed a quarterly report to build a China real estate financial environment index. Which includes nine sub-indicators, can generally reflect the real estate industry is facing the monetary policy and the degree of tightness of the capital side.

The real estate financial environment index in China in the first quarter of 2016, is a loose section, then down, the first quarter of 2017 has dropped to normal range, Yi Ju Real Estate Research Institute Vice President Yang Hongxu Is expected to slide in the second half of the tight interval.
The chart of this index from E-house (Yiju) runs from loose (red) to tight (blue). Q1 was normal.
This next chart compares a financial conditions index (green) with sales growth in the top 30 cities (red).
Evergreen real estate Yang Hongxu that the past two rounds of short cycle of experience, the financial environment indicators are not bottomed out, the sales growth will not rebound, or will not be achieved by the negative positive. The past two rounds of sales growth continued for five quarters. This round is expected to last longer may be longer.
Buying restriction could kill the market until 2021:
"In fact, the sale is the property market 'to the lever' policy, so that buyers must be for their own purpose for the allocation of funds, or in accordance with the 4-5 year trading cycle, is unlikely to attract highly leveraged high-cost funds to enter." Central Plains real estate chief analyst Zhang Dawei said bluntly.

Even if the sale of new homes in the restricted cities, may be the first to 2021 before it can be listed on the transaction. A number of industry insiders believe that the sale of a clear blow to speculative investment demand, reduce the investment properties of the real estate market, affecting the real estate speculators the possibility of short-term profit. "For the leveraged investors, the risk is growing."
The article concludes with a reference to a leaked document from Vanke which definitively says the golden era of real estate is over.

Vanke said the same thing in 2015.

The restrictions are far tighter this time and China's debt levels all the larger though, so maybe this time really is different. We'll know in the second-half when the real pain starts hitting. Will governments hold the line or ease at the first sign of major trouble?

iFeng: 楼市爆大消息!这次不一样了 这些人受益最大

Yanjiao Housing: Prices, But No Market

A familiar phrase when China's housing market enters the doldrums: there are prices, but no market. This time in Yanjiao, a Beijing suburb in Hebei province. It is within Sanhe country, and that county has a price target for the market: October 2016 prices. Some homes are down several thousand yuan per sqm, but there are still no takers.
The Sanhe new regulations are derived from the above policy spirit. And proposed to stabilize house prices at the level of October 2016.
Prices spiked in the past year, but have come down sharply in the past couple of months:
June 11, the reporter saw the chain home online, published in a month ago, the availability of information on the city on the third quarter of a set of 165 square meters of housing, the total price of 3 million yuan, the unit price of about 18,000 yuan / square meter. Half a month before the release of the East a city of 77 square meters of housing, 1.54 million yuan, the price of about 19900 yuan / square meter. This is the chain home site can find a few, broken 20,000 yuan below the availability. Most of the unit price remained at 20,000 yuan or more.

Yan Shun Road is Yanjiao high-end second-hand housing concentrated area. Yan Shun Road in the vicinity of the West Street, the intermediary gathered, two or three intermediary stores are very common neighbors.

Here entrenched two real estate, one is the East International Trade, one is the influx of white people. East Trade International is to enter Yanjiao can see the benchmark real estate. According to several local brokers, the current price of 27,000-28000 yuan, which is a broker said, the unit price of 25,000 yuan of housing also exists, housing will be worse.

In another intermediary display board, the reporter saw the region housing prices are almost all more than 30,000 yuan / square meters. Ask the intermediary that this is the price of March, the board has not yet timely removed.

Reporter mobile phone received a chain of home broker released a low-cost housing information: Hawaii Garden two-bedroom, 71 square meters total price of 1.99 million yuan, the average price of 28,000 yuan / square meter, and in March this year, Hawaii Garden price was 33,000 yuan / square meter.

"Every district has a low point, some district does not have defensive, before close to thirty thousand, now more than twenty thousand, and even individual houses in the 20,000 yuan, but Hawaii house price down to 25,000 yuan may be Is not big, this is the region's well-known high-end district. "Chain family broker Xiao Zhou said.

At present, Yanjiao low-end and high-end residential housing prices the highest difference of about 10,000 yuan. So the price of different districts is not comparable. Even if a district of different housing prices are not comparable, only the same source price of the apartment, is the actual price changes.
iFeng: 燕郊楼市“停火”:二手房单价降4000元 仍有价无市

Core Sticky Inflation Collapses

The Atlanta Fed published a sticky and flexible CPI, breaking out the components. Sticky inflation had been moving consistently higher until this year. Now it has collapsed at the fastest rate since the series began at the end of 2001. The financial crisis saw a larger total drop, but even the initial drop in the middle of the recession wasn't as large as the recent swing. The plunging blue line is the 3-month annualized rate of inflation. The brown line is 12-month annualized flexible CPI, orange is 12-month annualized core CPI.

Ponzi Popping: Anbang WMP Sales Plummet 88pc

Anbang was one of the companies aggressively using the "borrow short, buy long" strategy of funding acquisitions with short-term insurance policy premiums. Now its cash flow has evaporated and the banks are rightly refusing to play musical chairs after the government turned the music off.
Bloomberg: Anbang's Woes Deepen as Banks Are Told to Halt Dealings
Pressure is building on Anbang Insurance Group Co. as Chinese banks distance themselves from the owner of New York’s Waldorf Astoria hotel amid a wide-ranging government probe that landed Chairman Wu Xiaohui in police custody.

Chinese authorities have asked lenders to suspend some business dealings with the insurer, according to a person with knowledge of the matter, who didn’t provide further details. At least six large banks have stopped selling Anbang policies at their branch networks, with some taking action before the government notice, people with knowledge of their operations said.
NYTimes: Anbang’s Sales Dry Up in New Challenge for Chinese Insurers
Anbang’s sales of life insurance policies and investment products, an important source of cash, stopped almost completely in April after tumbling sharply in March, according to Chinese government data released on Thursday. Across the insurance industry, sales slowed in April compared with earlier in the year.

The weakness follows the government’s crackdown on a sector that is supposed to help families and companies cut their financial risks, but has recently become a hub for rampant financial speculation.

...Anbang is now under acute pressure. Its revenue from existing life insurance policies and certain wealth management products was down 88 percent in April compared with the same month the previous year. The rest of the industry was up 4.5 percent in the same period.
Flashback to one month ago: Pop Goes the Ponzi: Rumors Foresea Life Insurance In Trouble
A leaked document circulating on the Chinese Internet shows one of China's most aggressive sellers of universal life insurance is in trouble. Foresea Life was selling policies like hotcakes in order to fund parent Baoneng's takeover attempt of Vanke. The chairman of Baoneng was banned from the insurance industry for 10 years, and now the insurance division might be facing a Ponzi-collapse if it cannot sell enough new policies to meet the cash demand from a ballooning amount of surrendered policies. Last year, policies surrendered totaled 9 billion, an increase of 5.2 times. This year, the 2017 estimated surrender value (estimated by Foresea) is 60 billion, an increase of 6.7 times.
Anbang was also an aggressive seller of these policies, using them to fund acquisitions.
Anbang’s premiums from investment products reached 186.9 billion yuan, a 271 per cent year rise on the previous year. Evergrande Life Insurance’s investment premiums swelled 705 per cent to 23 billion yuan while that for Qianhai Life surged 228 per cent to 50.1 billion yuan, according to calculation by SWS Research.

If insurers use cash collected from universal life products to buy shares in listed companies, they have to issue the products continuously to maintain cash levels, because many buyers surrender them within three years, Li from CMS said.


Concentration of Economic Activity Explains Electoral Results

One interesting aspect of the 21st Century is the rise of the Internet and telecommunication did not lead to a flatter world. People can work anywhere, but instead geography has concentrated. The result in the United States and probably in much of the Western world: very expensive areas with concentrated wealth acquisition creates a stratified society, along with delayed marriage and family formation among the young because they cannot afford housing. A new urban-rural political divide follows.

While one can understand why rich people would find cosmopolitan liberalism like Hillary’s more attractive than Trump’s rude nationalism , the trend seems to be for young educated people who don’t themselves have all that much money (but live in expensive places) to be attracted to relatively unreconstructed Marxists like Bernie Sanders or Jeremy Corbyn. It strikes me that Marx was wrong for lots of reasons, but the biggest is because classes under capitalism are not in fact engaged in a zero-sum competition for resources, but in positive-sum economic exchange. Capitalism has been such a success by allowing for that positive sum process of trade and innovation to accelerate and progress. But if the supply of a good considered necessary to a dignified life (like owner occupied housing) becomes almost perfectly inelastic in spite of increasing demand, then the society becomes much more zero-sum after all, with what is good for Peter being bad for Paul. In this way, left wing politics become more analytically correct as the society constrains and limits the ability of capitalism to give people what they say they want- a dignified home and means of providing for themselves.

In the US, it’s still possible for people with some education to shoo the fly out of the bottle, as it were- there are enough jobs in places where it’s still quite cheap to live that to a significant degree living in a place where you “can’t afford to start a family” is a matter of choice. But just as, for the California Democratic party, making housing steadily more expensive over the last sixty years has turned out to be a very good plan, so too conservatives should probably prioritize Affordable Family Formation over tax cuts if they want more people to be conservative in the future.

Chinese M2 Growth Slows to 9.6pc YoY in May, TSF Deleveraging

Chinese M2 growth slowed to 9.6 percent yoy in May. Growth last slowed to 9.6 percent in April 2015 before rebounding as credit eased, peaking at 14 percent in January 2016.

Reuters: China May new yuan loans 1.11 trln yuan, more than expected

Total social financing increased more than $1 trillion, more than 100 percent was new loans.

Socionomics Alert: Has a New Era of Political Violence Begun? Gunmen Opens Fire on Congressmen

BREAKING: House Majority Whip Steve Scalise and Aides SHOT, Lawmaker Asked, “Are Those Republicans or Democrats?”
Republican Representative Steve Scalise, the House Majority Whip, and his aides were shot during baseball practice on Wednesday morning.

The shooter was shot by the lawmaker’s security detail.

...Rep. Ron DeSantis said he was asked, “Are those Republicans or Democrats out there practicing?”

This was right before the shooting.
It's unknown if the shooter asked the question or someone else in the parking lot.

The only reason why the gunmen was stopped was because Scalise in the Majority Whip, he has a security detail. If Scalise was not there, it could have been a massacre. The gunmen seems to have planned a massacre, Senator Rand Paul says he reloaded and fired at least 50 or 60 shots. Other witnesses say the shooting continued for 10 minutes.

A month ago I wrote: Will President Trump Be Impeached? America Edges Towards Social Unrest
The 1970s (riots, impeachment, soaring crime) are an optimistic scenario if social mood declines. The extremes in wealth disparity, foreign population and declining life expectancy tells me this is much closer to the early 1920s (wave of communist and anarchist terror) , if not the late 1850s. Peter Turchin lays out many of the social and economic factors that are consistent with prior periods of civil war and social unrest.

Socionomics tells us what is possible given the prevailing mood, but what actually takes place depends on the facts on the ground. America is much closer to major upheaval than is realized. It is a powder keg, and extremely negative social mood will be the spark.
Given the history of these types of shootings, it is probably a nut with a gun. But given the prevailing social mood, it's also possible this is the start of a new era of violence targeted at politicians as happened from 1900-1920 and during the 1960s.


Fixed Asset Investment Growth Slightly Lower in May

Fixed asset investment slowed slightly to 8.6 percent ytd in May, up 7.8 percent yoy for the month of May.
Private FAI was up 6.8 percent ytd and 6.7 percent for the month of May.

SOE investment fell and private investment picked up to keep growth relatively stable.

NBS: 2017年1-5月份全国固定资产投资(不含农户)增长8.6%
NBS: 2017年1-5月份民间固定资产投资增长6.8%

First Time in 9 Months: Real Estate Investment Slumps Below Trend

Real estate investment increased 7.4 percent yoy in May, up 8.8 percent on the year through May. Sales growth by area and value still falling.
NBS: 2017年1-5月份全国房地产开发投资和销售情况

CASS, Analysts Expect Extended Housing Downturn

The past two declines in real estate lasted 5 months. This one is expected to last longer.
According to the China Economic Net on June 12 disclosure, the Chinese Academy of Social Sciences Institute of Finance and Strategy, the Chinese Academy of Social Sciences City and Competitiveness Research Center, "China Housing Development Report" project team released in May "Monthly Analysis of Housing Market Development Report" , With the tightening of funds, as well as local governments on housing investment needs, especially cross-regional housing investment in the joint control, most cities short-term gains will be suppressed, pre-housing prices rose too fast, the larger bubbles such as Beijing Short-term will continue to fall.

...Evergreen real estate Yang Hongxu that the past two rounds of short cycle of experience, the financial environment indicators are not bottomed out, the sales growth will not rebound, or will not be achieved by the negative positive. The past two rounds of sales growth continued for five quarters. This round is expected to last longer may be longer.

...The property market will be fully cooled

For the next property market trend, Centaline Property Chief Analyst Zhang Dawei is expected:

1. The cost of home buyers capital has continued to rise, has gradually completed from the amount to qualitative change process, the pressure of loans is growing. The current market turnover has been a comprehensive cooling, prices began to appear.

2. The prices are gradually adjusted. In this case, the bank's risk increases, the bank's awareness of the risk of collateral will increase, banks are expected to continue to tighten the amount of real estate and raise the price of real estate loans.

And in the past two years, most banks have absorbed too much real estate collateral. In this case, the mortgage has been tightened during the control cycle, loan discounts have been reduced, and lending time has been significantly extended. These are superimposed real estate control policies to play a regulatory effect.

3. Historically, the most stringent degree of Beijing credit is in 2011 and 2014 part of the time point, the first suite to restore the benchmark, the psychological impact on the buyers will be very large. The recent benchmarking will be the most stringent policy on the history of Beijing's mortgage loans. From the regulatory trend, the expected tightening trend of credit, the real estate cooling will continue.

Yang Hongxu that:

The first half of the current round of real estate regulation and control, from the key role is that some hot areas of the purchase, limit, limit loans, resale and other real estate policy. The next six months, the key factors, will be transformed into monetary credit and liquidity tightening, which belongs to the real estate industry's external environment.

Producer Prices Down Broadly in First Third of June

NBS: 流通领域重要生产资料市场价格变动情况(2017年6月1日-10日)

Beijing Agents Urge Homeowners to Cut Prices

iFeng: 房贷紧楼市降温:中介劝业主降房价 购房者被银行劝退
"If you do not cut prices, no one can see this house, you can not sell." At the same time, if the second - hand housing unit price of more than 150,000 yuan, can not be traded. To this end, most owners will agree to lower prices under the persuasion. "A number of intermediaries said.

ECB Sells Dollars, Buys Renminbi

ECB: ECB completes foreign reserves investment in Chinese renminbi equivalent to €500 million
The European Central Bank (ECB) completed an investment equivalent to €500 million of the ECB’s foreign reserves in Chinese renminbi (CNY) during the first half of 2017, implementing a decision taken by the ECB Governing Council on 20 January 2017.

Shibor Keeps Rising

One reason to think the PBoC won't follow the Federal Reserve in hiking rates, is while the Fed will have hiked 0.75 percentage points from December to June, the Chinese market has already seen rates increase 1.25 percentage points for some time periods:

Strong Dollar, Shale Oil Draining Reserves

ZH: Qatar Is Running Out Of Dollars
While the Saudi-led campaign to starve Qatar's citizens may end up short of the target, with both Turkey and Iran volunteering to provide needed staples to the isolated Gulf nation while local entrepreneurs have started a cow paradropping campaign to offset the decline in milk imports, a more pressing problem has emerged: Qatar's financial system is running out of dollars. As Bloomberg reports, several Qatari banks have boosted interest rates on dollar deposits to shore up liquidity as the Saudi-led campaign to isolate the gas-rich Arab state intensifies.

To boost their hard currency reserves, Qatar banks are now offering a premium of as much as 100 basis points over LIBOR to attract dollars from regional banks, some 80 bps higher compared to the rate they offered prior to last week's crisis. A similar picture is visible on the 3-Month QIBOR, or Qatar Interbank Rate, which has surged to 2.3% as of Tuesday.

According to the central bank, at the end of April, Qatar's banks held 21.4% of their customer deposits in foreign currency. Non-resident deposits made up 24% of the overall deposits of 781 billion riyals ($213 billion). A separate estimate from SICO Bahrain, Qatari banks have around 60 billion riyals ($16.5 billion) in funding in the form of customer and interbank deposits from other Gulf states. Most of this could eventually be withdrawn if the crisis continues.

Adding to concerns of a monetary blockade, Bloomberg also reports that some banks in neighboring countries have been cutting their exposure to Qatar amid concerns of a widening of the blockade.
The focus is on geopolitics, but this background is the strong dollar and U.S. shale oil.

Banks Still Hiking Rate, Homesellers Not Getting Proceeds

Here's an anecdote about a woman approved for a mortgage in February, but the bank still hasn't released the funds for the home she has purchased.
"My loan was approved in February, but the home seller still hasn't received any funds." Li Li admitted that she was lucky, she enjoyed the 15% discount rate concessions.
China Securities News reporter recently in Beijing, Shenzhen, Nanchang and other places to understand that most buyers are not so lucky Li Li, the first set of mortgage rates have been adjusted from 9 fold to 95 fold, and then to the current benchmark interest rate or even floating higher.

...Bank staff did not explain the reasons for the second suite lending more than the first suite, analysts believe that the two sets of mortgage interest rates rose 10% -30%, commercial banks in the case of tight credit line tilt is reasonable in.

Reporters learned that the current ICBC, Bank of China, Bank of China, China Construction Bank and Bank of China and other five sets of two sets of mortgage interest rates rose to 1.2 times, Bank of Beijing, China Merchants Bank, CITIC and other banks two suites rate also rose to 1.2 times, Minsheng Bank Is up to 1.3 times. Previously, most of the bank two suites lending rates were floating 10%.
The wait-and-see attitude among buyers is strong now and transaction volume is sliding as these policy effects hit the market.

iFeng: 楼市观望情绪浓厚 专家:拐点难现交易仍有反弹可能

Fan Gang discusses the real estate market and government policy:
Economic Observer reported that on June 13, Beijing rainy rain, China Economic System Reform Research Association, vice president of the National Economic Research Institute Fan Gang appeared in the fourteenth session of the 2017 China blue-chip real estate annual meeting. Fan Gang's speech is "China's urbanization process and the development of the real estate market." He bluntly, overcapacity is not cleared, the debt is not cleared, private enterprises to invest hard, so the Chinese economy, his personal mood is not so optimistic.

Of course, in the overall tone, he is not a complete pessimist, specifically in the real estate field, he felt that China's high growth story is still not over, the real estate market took a detour, the potential is still huge, in the speech, he passed Five aspects of analysis, how the normal growth of real estate.

First, the demand, the lack of real estate tax such as automatic stabilizer, if the demand side with automatic stabilizer, you do not need to buy, no need to take administrative measures, tax and leverage can automatically stabilize the role of real estate.

Second, the supply, the biggest problem is the urbanization strategy out of the question, before the urbanization policy, is now urbanization policy to encourage the development of small towns, limiting the development of large cities, accordingly, small cities for the land to use, But for the past 30 years, the vast majority of the population moved to big cities.

The basic logic of urbanization is economic efficiency, economies of scale, aggregation benefits, because the big cities can save resources, can create conditions for more enterprises to develop. The rhythm of the land did not keep up with the pattern of urban development of the population, which is a problem, of course, the Ministry of Homeland declared, reduced or stopped the population to the small cities for the population, to increase the supply of large cities, which is the beginning of the signs of adjustment.

Third, to solve the problem of real estate or the need to solve the strategic and institutional issues, rather than simply put the real estate problem in the currency problem, the money did not go to the stock market, said to the real estate, this time how to the big city , Not to small and medium cities to go? Have to explain it, the money is more than a paradoxical argument.

Fourth, China's economic problems are overcapacity, inventory and other structural problems, structural reform and enterprise reform, the economic cycle and so on. He real estate as a case, the real estate surplus will cause a bubble, or even collapse, but the specific real estate market in China, even the down payment can be a loan.

Fan Gang believes that in this emergency, the Government to take measures on the back to step up to do some correct things to change some of the past strategy, past policies, past practice, so that the real estate market can be stable and healthy development, and then gradually To withdraw from the administrative means to withdraw from the money to buy a house so that people engage in divorce to buy a house of administrative measures.

Fifth, the relationship between real estate and land prices. Why is your house expensive? Because the land is expensive, the land is shot out, because it is expected that the future price of this place higher than the current housing prices. Is expected to lead to price increases, the price of land is the derivative price of real estate prices. If the government no matter, let the market continue to heat, the price will rise for two or three years, laissez-faire real estate, local government land prices sold high, more money and certainly happy, real estate business is also happy, investors are happy, finally There is an investment opportunity. and then? Two or three years later? That is what is called a hard landing, what is the collapse, what is the crisis ah

Finally, he believes that the fundamental solution to the real estate problem still need to solve the strategic and institutional problems, the problem of China's real estate, and China's economic problems are consistent, are overcapacity, inventory and other structural problems, structural reform and Enterprise reform, the economic cycle and so on.

Facing the trend of China's economy, he admitted that "this round of the problem has not cleared, but also clean up for some time, how long I do not know, but learn from the last time I am afraid for some time now think about how much excess capacity Clean up, how much debt is not cleared, pressing private enterprises is difficult to rise investment, the economy is difficult to return to normal growth, coupled with the gradual recovery of the international economy, is probably such a basic judgment, our L-shaped in the end, in the Wandering, we use the historical perspective, before and after the look of China 's economy.
iFeng: 樊纲五问中国房地产:高房价的根源是什么?

50-plus Cities Have Selling Restrictions, Average Wait 4 to 5 Years

More than 50 cities have selling restrictions that require a homebuyer hold on to a new home for several years before selling.

iFeng: 限售城市或超50个 新房“转手”料需等四五年
First of all, the difference between the number of years of sale, the reporter comb found that most of the city restrictions on sale policy are required to purchase new commercial housing in 2-3 years shall not be transferred, and the premise is in the restricted area; and Baoding Baigou Metro will be banned Period of 5 years, a longer time.

Second, in the restricted object, Hangzhou expressly restricted the object is only for the enterprise, the proposed purchase of Hangzhou to buy regional housing to be 3 years to be listed transactions; Baoding Baigou Metro and other policy restrictions are non-local household residents (family); Guangzhou, Wuxi is the residents and enterprises to set up a different "lock-up period"; of course, most of the city's sales policy is for all housing transactions object.

"In the future to buy new houses in these cities, perhaps in the 4-5 years before they can be sold." Centaline Property chief analyst Zhang Dawei told reporters that due to the sale of many cities or mainly to new home transactions, from signing to get real estate license in general Need a year or two, plus 2-3 years of lock-up period, "resale" cycle was significantly stretched.
Selling restrictions are also expected to hit third- and fourth-tier cities.


PBoC Not Expected to Follow Fed Again

iFeng: 美联储加息时点临近 央行还会再次“跟加息”吗?
Since January this year, the central bank raised interest rates on the money market policy (reverse repurchase, MLF rate) twice as the Federal Reserve raised interest rates. However, this practice on Friday the Fed will be the probability of raising interest rates in the context of being broken.

After the central bank on the RMB exchange rate central parity model to join the "counter-cyclical factors", but also by the June MPA assessment, tax and financial leverage and other factors caused by tight market liquidity. In this context, a number of analysts believe that the central bank raised the possibility of money market policy interest rates is very small.

...China's central bank will not raise interest rates (referring to the deposit and lending benchmark interest rate, OMO, SLF, MLF interest rate), even if the rate hike, the next time not added, the central bank will judge according to the economic situation itself The And pointed out that the central bank to raise interest rates is based on two conditions: 1, the exchange rate depreciation is expected to reduce; 2, capital outflow pressure slowed down. US Treasury bonds and China's national debt ten-year spread of 150BP or so (China's 10-year period of 3.6% -3.7%, the United States 10 years of 2.2%) and nearly three years to about 110BP, already have a relatively high premium, Slow down.

Lixian Securities chief macro analyst Li Qilin and the views of those who are basically the same, that China's central bank exchange rate pressure is not so big, coupled with the pressure of capital outflows slow (long short side spreads and the United States opened, while the stock price, assets Price bubble pressure becomes smaller, capital outflow pressure slowed down). And bold prediction, from the first indicators of US real estate mortgage loans can be seen year on year, the US economy is estimated to have a period of time to go down, the odds of the central bank moving with the Fed are almost zero.

Huachuang macro group Niu Bokun, Zhen Maosheng also believe that the recent strength of the renminbi to a certain extent, the release of the monetary policy of the somersault space, the central bank or no longer follow the Fed again raised the reverse repurchase and MLP interest rates.


Media Rushes to Put Out Fire After "20 Banks Halt Mortgage Lending"

Headlines in the finance and real estate sections are trying to put out the fire started by news of 20 banks halting mortgage lending.

iFeng: “20家银行停贷”数据需质疑 防范借机炒作引市场恐慌
Bank mortgage market is "treating everyone as the enemy." Banks raised the mortgage interest rate news is still fermented, the market has news that 20 banks have stopped lending, the news continued fermentation last weekend. In the view of analysts, "20 banks stop lending" data is not representative, the bank can not be a large area of ​​lending.

"20 banks stop lending" is not representative

Rong 360 monitoring data show that currently 20 of 533 banks have suspended lending, in the future there will be more banks suspending the mortgage business. But within the framework of the policy, there will not be a large area of ​​loans, affecting the normal order of the mortgage market. This is not good for buyers, may increase the difficulty of loans.

...Zhang Dawei said that the credit rate is up trend, but can not appear a large area of ​​loans. He explained that the cost of home buyers continue to rise, has gradually completed the process from quantitative to qualitative change, the pressure of the loan is growing. The current market turnover has been a comprehensive cooling, prices began to appear. Mortgage is still the majority of the bank's high-quality business, it is impossible to appear a large area of ​​the phenomenon of stop lending.

In the impact of the news level, Yan Yue Jin that even if there are 20 banks to stop lending, in fact, for housing prices and buyers are not big. He pointed out that the specific circumstances of the loans, housing prices and buyers can be negotiated.

Yan Yuejin also reminded that to prevent intermediary companies or agents may use this news to hype in order to speed up the purpose of home buyers to sign, which may lead to some panic transactions, such panic transactions to be controlled, such as Said to prevent some of the banks to tighten the spread of the follow-up must be completely tightening the guide. The current bank loan is only a case, will not have a substantial impact on the specific purchase transactions.
iFeng: 20家银行暂停房贷?专家:不可能出现大面积停贷
For a time, the major media have forwarded the story, but after careful comparison found that the statistical criteria is not very strict. Analysis of the industry, "now the mortgage is very critical, the mortgage is indeed tightening, are afraid of further panic phenomenon. Payment data is to follow the share of the banks to see the mainstream banks, this statistical agency did not say last month, last year there is no Stop the loan, when did the 20 banks stop lending? The key is who are the 20 banks? Is it 20 banks or 20 branches, is it 20 branches of the same bank? In fact, this statistical agency is the 35 cities Branch as a bank to statistics, a total of more than 500, the 20 stop lending bank, its previous statistics have been stopped.

In other words, the mortgage interest rate has its own special policy background and bank assets shortage of profit factors, and "stop lending" can not be directly linked.

To Infinity and Beyond: Chinese Home Prices Will Have Another 50pc Rally

ZH: China's "Bubble Prophet" Sees Unprecedented Surge In Home Prices
SCMP: China's top property bubble prophet says prices set to soar
The prediction was made by Zhu Ning, the deputy director of the National Institute of Financial Research at Tsinghua University in Beijing and the author of China’s Guaranteed Bubble: How implicit Government Support has Propelled China’s Economy while Creating Systemic Risk.

...“We’re living through a bubble,” Zhu said. “If we don’t engage in more meaningful reform, which we haven’t, we’re very likely to have a financial crisis or a burst of the bubble. It’s a matter of sooner or later.”

Property prices in major cities will surge again “by another 50 percent or so” after measures to rein them in are eased, said Zhu, without specifying a timescale. Because policy makers have previously imposed curbs only to ease them again, people see them as a bluff, he said.
Policymakers have trained the public to "buy the dip" and as soon as controls are lifted, it will be off to the races again. Based on prior history, the slowdown in the housing market should intensify by the second-half of 2017, and by first-half 2018 the curbs will start being lifted.

More Fake Numbers: Jilin Cities and Corporations Busted

iFeng: 中央巡视反馈:吉林部分地方和企业经济数据造假
Jilin: In some places, corporate economic data fraud.

In the tour of Jilin, "look back", the inspection team found that cadres and cadres to reflect some of the problems, mainly:

"Four consciousness" is not strong enough to carry out the central major decision-making is not enough in place to implement the ideological responsibility system is not strong enough, poverty alleviation work is not enough precision; political ecology is not healthy, there is "good", and some places, corporate economic data fraud ; The leadership of the party building is not strong enough, the party's political life is not strict enough, and some grassroots party organizations weak and lax; executive cadre selection and appointment of the relevant provisions are not strict enough, and some leading cadres "sick promotion"; comprehensive strict governance party is not strong enough, "Two responsibilities" is not enough to implement, in violation of the central eight provisions of the spirit and grassroots damage to the interests of the masses have occurred, state-owned enterprises, transportation and other key areas of existence of the risk of clean-up; the last round of inspections of office space exceeded, illegal part-time and illegal equipment Cadres rectification is not in place.


Catalonia Votes for Independence on October 1

Guardian: Catalonia calls independence referendum for October
Catalonia’s long-awaited and bitterly controversial referendum on independence from Spain will be finally held on 1 October, the regional government announced on Friday, triggering yet another political and judicial showdown with Madrid.

The Catalan president, Carles Puigdemont, said that voters in the unilateral referendum would be asked the question: “Do you want Catalonia to be an independent country in the form of a republic?”

Puigdemont’s pro-sovereignty administration insists the wealthy north-eastern region has a political, economic and cultural right to self-determination.

...“When they’ve asked us what we Catalans want, we’ve given them proposals - all kinds of proposals,” he said. “But they have all - without exception - been rejected or seriously cut back.”
According to the article, polling from March shows the independence vote will lose. Also, it looks like an inverse head-and-shoulders pattern that points to a rally of 50 percent if it completes. Time may be running out.