Back to top

Real Time Insight

China is trying to change its economic model from investment and exports driven to domestic consumption driven. In the process, the country’s leaders now appear more willing to open up their financial system.

Look at some the recent developments:

·         There were two corporate debt defaults recently and the government did not step in to bail out

·         PBoC’s chief said recently that the country will fully liberalize interest rates in one or two years

·         Although there is no timeline for making the Yuan fully convertible, they widened the trading band to 2% above and below the fixing rate, starting Mar 17

·         The central bank appears more willing to let money market rates spike at times as it tries to rein in excessive lending

·         Shanghai stock exchange raised the shareholding cap for foreigners to 30% in a single company from 20% 

Although most parts of the financial system still remain closed, these measures suggest that China is slowly moving towards a more market-driven economy.

What does it mean for China and the global markets?
 

Just Released: 5 Stocks to Double

Today, you are invited to download a free Special Report from Zacks Investment Research. It reveals five moves that could gain +100% and more in the next 12 months:

One is The Next Great Innovator that looks to change the direction of our entire economy. Another is a recent IPO that already built a fortress in its segment. Still another, a small cap, has racked up 7 straight positive earnings surprises.

Close This Panel X

Please login to Zacks.com or register to post a comment.