After a break in celebration of the Year of the Monkey, China’s financial sector gets back into full gear this week. On Saturday the Ministry of Commerce reported an estimated 11.2 percent increase in retail sales versus the holiday week in 2015, indicating that the slowdown in activity on the mainland has not derailed household consumption. Meanwhile, official state media sources reported over the weekend comments from people’s Bank of China governor Zhou Xiaochuan that yuan depreciation in recent months is unwarranted based on current economic conditions. The statements, coming on the heels of a more-than $99 billion drawdown in the central bank’s currency reserves in January in defense of the exchange rate after it retreated to a new multiyear low, rang hollow with many strategists. In particular, Zhou’s scapegoating of “speculators” was received critical as capital outflows from China continue unabated.
Saudi Arabia initiates stimulus as Syrian conflict expands. Media reports yesterday indicated that the Saudi Arabian Monetary Authority raised limits on commercial lending facilities. This was an bid to boost demand as the nation’s economy continues to suffer on the back of declining oil revenues. Separately, media outlets in Turkey have reported that Turkish and Saudi military leaders were in discussions over placing ground forces in Syria despite objections from the U.S., Turkey’s fellow NATO member.
Hong Kong leaders urge calm and obedience to Beijing. A dispute over food vendor licensing during Lunar New Year festivities in Hong Kong escalated into a prodemocracy protest that has given way to violent clashes with police in riot gear. While Chinese government media outlets have largely avoided coverage of the ongoing protests, Hong Kong news sources have published comments from Beijing officials equating the prodemocracy activists to terrorists. The demonstrations follow public outcry over show trials on the mainland of Beijing-critical publishers apprehended in Bangkok in arrests that Thailand officials have asserted were illegal.
Scalia’s death brings fresh controversy to election. The unexpected death of U.S. Supreme Court Justice Antonin Scalia on a hunting trip in Texas has created a new flash point in the 2016 U.S. presidential election. Considered the most conservative member of the nine-justice bench, the nomination process for a new justice is expected to become a protracted battle amid a polarized Senate and House of Representatives.
