For Wall Street, China's financial markets are bigger than the trade war

International News
Executives from the biggest US financial firms, including JPMorgan Chase & Co and Goldman Sachs Group Inc, are meeting with top regulators in Beijing in a sign that the trade war with the US has done little to derail China’s opening of its $43 trillion financial system.
Among those scheduled to attend on Friday at the Ritz-Carlton hotel on the city’s Financial Street will be Yi Gang, governor of the People’s Bank of China and senior officials from the China Securities Regulatory Commission, according to the meeting’s agenda, which was seen by Bloomberg.
Even as the trade war rages, China has continued to open its financial sector at an unprecedented pace, luring global banks seeking to compete for an estimated $9 billion in annual profits. While the policy has often been cast as addressing U.S. complaints that the Asian nation has been a one-sided beneficiary of trade, domestic motivations are also behind the push, said Michael Pettis, professor of finance at the Guanghua School of Management at Peking University.
“China is very determined to reform its financial markets and knows that without the major American players, it is very hard to talk about having a truly internationalized market,” he said. “It also makes sense for China to accommodate a very important source of lobbying support, especially as there’s so little in the U.S. right now.”Representatives for JPMorgan and Goldman Sachs declined to comment, while the PBOC and CSRC didn’t immediately respond to requests for comment sent outside of regular business hours.
Forcing Change

 Chinese regulators can’t ignore the country’s financial-market issues. Corporate bond defaults reached a record high last year and the nation’s banks are seeing their balance sheets swell with ever more bad loans....READ MORE

US Fed cut may prompt China to lower its policy rate in 4 years: Report

International News

China's central bank could cut its benchmark policy rate for the first time in four years if the US Federal Reserve delivers a widely expected cut in late July, analysts say, as Chinese policymakers step up support for the slowing economy.
Market watchers, however, believe the People's Bank of China (PBOC) is more likely to follow any US rate cut by lowering its key short-term money market rates.
It would not be the first time the PBOC has followed the Fed's lead. In 2017 and 2018, the bank raised short-term money rates hours after U.S. hikes, although in more modest and symbolic moves of 5 to 10 basis points.
While Chinese officials continue to downplay the likelihood of more aggressive easing, the economy has been slow to respond to a host of earlier stimulus measures, while the US-China trade war is growing longer and costlier.
Some analysts believe GDP growth is nearing the lower end of the government's 2019 target range of 6-6.5%, reinforcing expectations that more support is needed soon.
In a bid to spur more lending, the PBOC has injected huge amounts of liquidity into the financial system in various forms over the past year, targetting small and private companies in particular. It also has quietly guided some short-term rates lower to reduce corporate financing pressure.

 But analysts say that has not jumpstarted investment as much as planned, as the uncertain business outlook leaves companies wary of making the fresh investments needed to steady the economy. They say a system-wide cut in interest rates may offer struggling firms more immediate relief...Read More