Cindy Li

Manager, Country Analysis Unit
Analyst – Greater China, ASEAN

Cindy Li is the manager of the Country Analysis Unit within the Financial Institution Supervision and Credit (FISC) Group at the Federal Reserve Bank of San Francisco. In that capacity, she oversees analysis of Asian financial sectors and Asian banks that operate in the United States. In addition, she monitors banking, regulatory, and economic developments in Asia, with a special focus on Greater China and the ASEAN region. Her research interests include financial regulation, financial vulnerability, and economic development.

Ms. Li has written extensively on the Chinese economy and financial markets. Her research has been published in peer-reviewed journals and presented at academic and regulator conferences. Prior to joining the FRBSF, she was a senior economist at the Milken Institute, where she led many research projects on global capital market trends, financial regulations, and the Chinese economy.

Ms. Li received her Ph.D. in economics from the University of California, Riverside, with research focused on informal finance and economic development. She holds a bachelor’s degree in international finance from Peking University in China. She also holds the designation of Chartered Financial Analyst (CFA).

Contact Cindy Li

Pacific Exchange Blog Entries

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India’s Non-banks Emerge from the Shadows

Posted May 31, 2019

Discussion of shadow banking in Asia is often dominated by developments in China, but India’s non-banking financial companies are gaining increasing attention as among the fastest growing in the world. Meanwhile, the bankruptcy of a large Indian NBFC in 2018 has put the sector under media scrutiny. Despite increasing risks to growth, India’s NBFC sector is still on track to expand at a rapid pace as it plays an important role in the financial system.

Falling Female Labor Force Participation in China and India

Posted March 28, 2019

In most countries, women’s participation in the labor force has steadily improved over the past several decades. However, in the world’s two most populous economies—China and India—female labor force participation rates have been declining. This blog takes a close look at factors underlying this development, the potential impacts on economic performance, and public policy options that can help slow or reverse the trend.

Asia’s Open Banking Push

Posted December 5, 2018

Countries around Asia are implementing laws and regulations to promote open banking to share data and enable third parties to provide products and services around a centralized platform. A move to open banking reflects the increasing digitization of Asia’s economy and the rise of technology platforms that envision a consolidated financial life for their customers. The impacts could be dramatic, increasing competition and promoting efficiency, integration, and inclusion, while also creating new risks.

Asia’s Emerging Virtual Banks

Posted October 9, 2018

Several Asian regulators are amending existing rules to allow technology firms to own and run virtual banks, which will likely result in a number of new digital lenders. This has triggered debate and discussion about licensing requirements, risk management, and consumer protection.

China Tightens Bad Loan Recognition Rules

Posted September 13, 2018

China’s recent decision to tighten bad loan recognition standards is an important and necessary step to repair small lenders’ balance sheets. The decision also means there will likely be significant recapitalization needs among lenders down the road, in addition to expectations for slower bank loan growth.

Asia Prepares for New Bail-in Bonds

Posted July 3, 2018

A decade removed from the global financial crisis, the world’s most systemically important banks are preparing to meet new rules on total loss-absorbing capacity (TLAC) by 2019. New TLAC-eligible debt securities, popularly known as “bail-in” bonds, have emerged post-2008 as part of efforts to minimize the need for taxpayer bailouts in future crises. In Asia, banks in Japan and China will face tailored versions of these requirements based on the unique features of each country’s banking system. Below, we examine the state of TLAC in Asia.

Why Are Foreigners Holding More Onshore Chinese Securities?

Posted May 29, 2018

Foreign holding of onshore Chinese securities is expanding rapidly from a small base. Over the past year, overseas investment in Chinese A-share stocks has gained momentum after the MSCI decided to add Chinese A-shares to the MSCI index family. This development will enhance the already growing interconnectedness between Chinese capital markets and the rest of the world.

China Bond Market: Slower Growth but Better Product and Investor Mix

Posted April 17, 2018

Domestic bond issuance in China declined in 2017. Growth in outstanding onshore bonds and trading volume also moderated. Notwithstanding the lackluster performance, the products offered by the Chinese bond market continued to grow in sophistication. The investor base has also become more diversified as overseas investors and non-bank domestic investors play a bigger role. These developments will likely contribute to the resilience of the bond market in the long run.

China’s Household Credit Boom

Posted January 29, 2018

China’s rapid credit growth has generated increasing concern over the past several years. Recent regulatory action and debt restructurings have slowed the pace of corporate debt build-up, but new risks are emerging as Chinese households lever up. On the whole, continued increase in household credit is aligned with China’s efforts to rebalance its economy towards consumption, but the fast growth of the sector warrants close monitoring.

China’s Recent Efforts to Deal with Stressed Loans

Posted June 28, 2017

The pace of stress loan creation in China has slowed recently, partly reflecting efforts to dispose nonperforming loans and to restructure corporate debts. These programs aim at strengthening the banking sector, but will likely weigh on bank earnings and capital levels in the short run.

China’s A-Shares Join the MSCI Index

Posted June 23, 2017

On June 20th, MSCI announced the inclusion of Chinese A-shares to its widely followed emerging markets index. MSCI’s decision to add China, albeit gradually and as a small proportion of the total index, represents a major breakthrough for China’s onshore stock markets.

Can Asia Overcome Challenges and Remain Resilient?

Posted March 2, 2017

Despite sizable capital outflows in recent years, emerging Asia’s strong external position and solid economic performance will help the region weather headwinds and remain financially resilient.

Can Private Capital Transform Banking in China?

Posted November 4, 2016

China’s banking system has historically been dominated by large government-owned banks. However, several recent trends are challenging that status quo. Private and privatized banks are beginning to play an important role in the financial system with the potential to improve financial inclusion and efficiency while raising new regulatory questions.

China’s Credit Growth: How Fast is Too Fast?

Posted August 31, 2016

China now has one of the highest leverage ratios among emerging economies, with its corporate debt-to-GDP ratio greater than any other major economy. The debt overhang poses challenges to the country’s economic transition and financial stability, although a full blown banking crisis is unlikely.

Fixing Taiwan’s Crowded Banking Sector

Posted June 9, 2016

Taiwan has a large number of banks relative to the size of the domestic market, leading to unhealthy types of competition and low levels of profitability. Authorities are trying to solve the problem by promoting bank mergers and international expansion.

How Does China’s Slowdown Impact the United States?

Posted May 9, 2016

How big a concern is China’s slowdown for the U.S. economy? This blog reviews financial and trade linkages between the two countries to explore possible transmission channels. At least for now, the overall direct impact appears to be limited, although U.S. exposure to China is growing.

The Global Impact of Chinese and Japanese Economic Growth

Posted March 31, 2016

Thirty years ago, Japan was growing so quickly that some predicted it would overtake the United States, while China’s economy was small and closed. Much has changed. China has overtaken Japan as the world’s second largest economy, but as China shifts to a “new normal” of lower growth, observers are increasingly concerned that it may no longer serve as the world’s economic engine. Meanwhile, proactive Japanese economic policy has renewed interest in Japan’s prospects.

China’s Shifting Policy Anchors

Posted February 3, 2016

Market participants are anxious to find new policy anchors as China moves towards a “New Normal.” But China’s growth and policy direction are likely to be less predictable in the future, a fact that market participants will have to learn to accept.

Banking on China through Currency Swap Agreements

Posted October 23, 2015

As China establishes itself as the world’s second largest economy and top trading nation, its currency, the renminbi (RMB), is also gaining popularity around the world. According to the People’s Bank of China’s 2015 Renminbi Internationalization Report, the RMB was the world’s 5th most used payment currency, the 2nd most used trade finance currency, and the 6th most traded currency in 2014.

China’s New Normal Is in the Making

Posted July 27, 2015

“China’s economy has entered a state of new normal – the gear of growth is shifting from high speed to medium-to-high speed,” said Chinese Premier Li Keqiang at the World Economic Forum in Davos earlier this year. Indeed, after two decades of double-digit growth, the Chinese economy is shifting into a lower gear. According to official statistics released earlier this month, the economy expanded at 7 percent in real terms in the second quarter of 2015.

Pacific Exchanges Podcasts

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Posted July 12, 2019

In this episode, we sat down with Nick Lardy, senior fellow at the Peterson Institute for International Economics. Nick is one of the world’s most prominent analysts of China’s economic development and the role of its private sector in generating growth. We sat down to discuss Nick’s new book, The State Strikes Back: The End of Economic Reform in China? Nick walked us through some troubling statistics about the Chinese private sector’s diminishing role as measured from a number of data sources and qualitative indicators of slowing economic reform.

Posted January 14, 2019

In this next episode of our series Rethinking Asia, we pick up where we left off last episode looking at the role of debt in China’s economy. We spoke with Charlene Chu, a senior partner for China macro-financial research at Autonomous Research, an independent research firm. Well known for her analysis of China’s shadow banking industry, Charlene previously was a senior director covering Chinese financial institutions at Fitch Ratings.

Posted December 18, 2018

In the next two episodes of our series Rethinking Asia, we look at the issue of China’s rising debt. In this first episode, we spoke with Yukon Huang, a senior fellow with the Asia Program at the Carnegie Endowment for International Peace. Yukon walked us through the recent growth and composition of China’s debt, and why he is more worried about the structural issues behind the debt than the overall level.

Posted November 5, 2018

In this episode of Rethinking Asia, we interviewed Kathy Matsui, vice chair of Goldman Sachs Japan. She is a prominent advocate for women in the workforce and serves as a policy commentator for Japan’s Cabinet Office. Kathy guided us through the factors that have led to the current gap between the high skill and education levels of Japanese women and, in many cases, their absence from full-time work.

Posted August 27, 2018

In this episode, we interviewed our colleague Sean Creehan, a senior analyst in the Country Analysis Unit. We asked him about a recent paper he wrote on the role of small businesses in Asia. We covered why SMEs receive a disproportionately small share of credit from the financial system, and how fintech and new innovations can boost SME financial access and overall economic growth.

Posted July 30, 2018

In our third episode of our series Rethinking Asia, we spoke with Andy Rothman, an investment strategist for Matthews Asia. Prior to joining Matthews Asia, he worked for 20 years in China, and now uses that experience to shape the firm’s thoughts on China from an investment perspective. Andy helped us understand the future of Chinese growth, its current state of domestic consumption and China’s efforts to rebalance away from investment and exports towards consumption.

Posted May 10, 2017

Asia is currently in the midst of a fintech revolution, with new technologies and startups threatening to disrupt the banking sector in economies across the region. In this episode of Pacific Exchanges, CAU analyst Cindy Li sat down with Nicholas Borst and Sean Creehan to discuss their recent paper on fintech developments in Asia.

Asia Focus Publications

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The Changing Face of Shadow Banking in China

Posted December 27, 2016

This Asia Focus explores the drivers behind shadow banking system’s growth in China, reviews the changing pattern of shadow banking activities, analyzes associated risks in the context of China’s growing capital markets, and discusses future regulatory challenges.

Taiwan’s Banking Sector Reforms: Retrospective and Outlook

Posted May 20, 2016

This Asia Focus outlines the history of financial and banking reforms in Taiwan, analyzes problems that developed in the banking sector after liberalization, and evaluates current initiatives by regulators to address those problems.

China’s Interest Rate Liberalization Reform

Posted May 12, 2014

This Asia Focus report explains the importance of interest rate liberalization in China, reviews historical progress and current efforts made to date, and discusses the potential impact on the banking sector.