PBC’s Balance Sheet Contracts
The balance sheet of the People’s Bank of China has shrunk by 1.1 trillion yuan, or 3.1 percent, from the end of January to the end of March. With liquidity tightening and capital prices rising, the shrinking of the central bank’s balance sheet is widely seen as a clear signal that the PBC will raise interest rates and tighten monetary policy.
Several economists interviewed by Caijing say that the methods used to determine and enact monetary policy regulations should be reconsidered. Analysts, economists and market actors have expressed the need for more transparency in making China’s monetary policy. In other words, monetary policymakers in China need to better clarify market expectations.
The Crowning of “King of Glory”
King of Glory, released by Tencent in August 2015, so far has accumulated more than 200 million registered users. Now the world’s largest multiplayer online battle arena (MOBA) mobile game by users, its monthly turnover exceeded 3 billion yuan, equivalent to Weibo’s net revenue for the entire 2016 fiscal year. The game has become a cultural phenomenon.
King of Glory was not developed by the most popular studio in Tencent, moreover, it was once defeated in an internal competition after its official release. But a year after that, it has become the most popular and profitable game. Industry insiders even say it is comparable to WeChat. So what happened in this period of time?
Big Time Corruption over the Small Screen
Dozens of staff in the radio and television system have been put under investigation after the 18th CPC National Congress, many of whom were allegedly involved in corruption over the purchase and sale of TV series. Industry insiders said that corruption in the radio and television industry usually occurs in three areas: purchase and sale of TV series, project construction, and advertising. Among them, purchase and sale of TV series is a major hotbed for corruption.
Although some television stations seem to have a sound procurement mechanism, it is easy to trade power for money. Rent-seeking can occur at several stages in the process: inspection of TV series, decision-making, and payment. This kind of under-the-table special deal has become an open secret in the industry.
Crude Oil Production Cut Extends
Crude oil prices fluctuated over the past year, but now the fundamentals of the market outlook for crude oil have changed. Affected by news that more oil-producing countries now support the OPEC proposal to extend by nine months an agreement to cut oil production, the domestic price of refined oil will adjust again at 24:00 on May 25. A number of institutions have predicted that domestic oil prices will rise to over 110 yuan per ton.
OPEC, which has 13 member states and controls about 40 percent of global production of crude oil, has lost much of its clout. But the OPEC routine meeting held in Vienna is still regarded as a guide to whether oil prices can embark on a path of recovery. Currently, global oil stocks are still above historical average, oil producers that participated in the oil cut want the market to rebalance at a higher price.
Whistle-blowing Is Real Threat to Trump
President Trump has been accused of disclosing highly classified information provided by Israel during an Oval Office session with the Russian foreign minister and the Russian ambassador to the United States on May 10. Since the election, the media has hammered away at the notion of Russia interfering in the Presidential election, with many pundits even wondering if Putin may have somehow helped Trump win.
With aggravated partisanship, an oddly close Russia-U.S. relationship, and suspected violation of separation of powers, Trump now faces major criticisms and challenges only just over 100 days after he took office. However, the real threat to Trump is secret information that could be disclosed by the FBI, the Department of Justice or even the White House, a situation which reflects the establishment’s distrust of Trump.