Given recent migration, citizenship and visa changes in Australia, I am pleased to announce that the Assistant Minister for Immigration and Border Protection, the Hon. Alex Hawke will make the keynote address at the Significant Investor Visa / Chinese in Australia lunch seminar 3 May, Sydney.
Meanwhile, this week’s developments in the Aus-China space include:
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Financial risks within China are making headlines. The China Daily and the South China Morning Post (SCMP) covered increased government concerns and related crackdowns on shadow banking and financial leverage. (see my previous article on China’s financial risks and their WMPs). (All links at end of this email)
Expect to see tougher regulatory and de-leveraging controls on the financial markets in the near-term. This has consequences for China’s corporate bond and stock market and in turn the poorly regulated wealth management products that invest in these markets. If liquidity is turned off too quickly as a consequence of the crackdowns, it heightens the risk of sharp market declines.
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A new TV drama in China, ‘In the Name of the People’ …about high-level political greed, sleaze and corruption, has become an instant hit …and comes with the blessing of Chinese government censors. The gritty ‘based on true stories’ show pulls no punches in revealing official misdeeds. This suggests that the CPC (Communist Party of China) is confident it is winning the peoples’ support for its corruption crackdown… and is also confident that its reputation as a governing body has not been tarnished by corrupt officials. As a consequence, expect anti-corruption measures to escalate within the non-state-owned financial and business community, particularly after the National Congress in Oct/Nov when President Xi is expected to consolidate power.
This increased finance-related anti-corruption drive will run in tandem with the tougher regulatory and de-leveraging initiatives as mentioned above… giving more stories for In the Name of the People!
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The first (but small) step on loosening China’s tougher capital controls was taken last week following several months of a stable yuan. Chinese banks no longer need to balance out-bound and in-bound amounts each month, according to the SCMP.
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Australia’s housing price growth will slow in April and May this year -simply because Corelogic, (whose indexes shows the highest growth rates in the SydMelBris market) changed its price index methodology in April and May last year that added 5.4 percentage point growth over those 2 months. These oversized numbers will drop off in April and May this year, to be replaced by far smaller monthly numbers, so expect slower growth rates (eg Sydney’s annual growth to be in the low teens rather than high teens).
This will bring Corelogic numbers back in line with the other house price indexes (ABS, APM, Residex and SQM)…and should lead to less public anguish about ‘run-away’ house prices (arguably they never were ‘run-away’ in the first place, based on the other index providers showing growth rates that were around 5% lower…as well as rezoning and settlement timing adjustments – see my earlier newsletter).
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Meanwhile, applications for Australia’s Significant Investor Visa (SIV) are tracking at 380 per year (based on the 253 applications lodged in the 8 months ending Feb 2017). The Chinese New Year (CNY) period would have reduced numbers in Jan/Feb. The March data is due soon from the Department of Immigration.
Foreign Investment Review Board’s (FIRB) 2015/2016 annual report is also due soon. While 9 months out of date, it will provide data on offshore purchases of Australian property and other business assets.
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Finally, an update on the SIV / Chinese investment in Australia lunch on 3 May. With 195 registrations so far, 200+ are expected on the day. Around half are individual delegates and the other half are corporate tables.
Please note there are no same-day registrations for the event. Standard price registrations ($180 + GST) close 11:59pm Monday 1 May, and final registration closes Tuesday 8pm, 2 May, with prices on that last day increasing by 10%. Please Register here or click on the image below.
Related Links
Crackdown on financial industry
China’s financial risk to the world via their WMPs
House price data impacted by rezoning and settlement timing differences