Bloomberg: “President Xi Jinping said China should deflate property bubbles and regulate the market for rental housing to better meet people’s residential needs, reinforcing the objectives outlined last week at an annual gathering of the country’s top economic leaders. ‘The country should accurately understand the residential feature of housing’ and create a better system for purchases and rentals to better serve new urban populations, Xi said… ‘The market will play the leading role in catering to multi-layered demand, while the government will take care of basic housing demand.’”

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Bloomberg (Justina Lee): “China bulls could be facing a grim New Year’s eve. The first day of 2017 is when an annual $50,000 quota to convert the yuan into foreign exchange resets, stoking concern there will be a rush to sell the local currency. With tax payments and a regulatory assessment also tightening liquidity in the money market toward year-end, January may bring scant relief as lenders prepare for stronger cash demand before Lunar New Year holidays, which are only a month away. China’s markets are seeing renewed pressure this month as the Federal Reserve projects a faster pace of rate increases for 2017 and its Chinese counterpart tightens monetary conditions to spur deleveraging and defend the exchange rate. The declines are capping off a tough year for investors during which bonds, shares and currency all slumped.”

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Bloomberg: “The onshore yuan’s surging trading volume is another piece of evidence that capital is fleeing China at a faster pace. The daily average value of transactions in Shanghai climbed to $34 billion in December as of Monday, the highest since at least April 2014… That’s up 51% from the first 11 months of the year. The increase suggests quickening outflows, given that data in recent months showed banks were net sellers of the yuan.

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Financial Times (Eric Platt): “Global debt sales reached a record in 2016, led by companies gorging on cheap borrowing costs that are now threatened by Donald Trump’s pledge to fire up the US economy. The bond rally that dominated the first half of the year helped entice borrowers that issued debt via banks to take on just over $6.6tn, according to… Dealogic, breaking the previous annual record set in 2006. Companies accounted for more than half of the $6.62tn of debt issued, underlining the extent to which negative interest-rate policies adopted by the European Central Bank and the Bank of Japan, as well as a cautious Federal Reserve, encouraged the corporate world to increase its leverage. Corporate bond sales climbed 8% year on year to $3.6tn… The year’s debt sales were buoyed by China and Japan-based issuers, up 23 and 30% respectively, from a year earlier.”

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[Bloomberg] China Manufacturing Stabilizes Near a Post-2012 High

[Reuters] China steps up scrutiny on individual forex purchases in the new year

[Reuters] China’s Xi says won’t let anyone make ‘fuss’ about its territory