national bureau – Bizchina Update http://bizchina-update.com/ Sun, 27 Mar 2022 00:45:16 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://bizchina-update.com/wp-content/uploads/2021/10/icon-120x120.jpg national bureau – Bizchina Update http://bizchina-update.com/ 32 32 The Chinese economy accelerates in January-February; Omicron cases cloud outlook https://bizchina-update.com/the-chinese-economy-accelerates-in-january-february-omicron-cases-cloud-outlook/ Tue, 15 Mar 2022 06:17:00 +0000 https://bizchina-update.com/the-chinese-economy-accelerates-in-january-february-omicron-cases-cloud-outlook/ Industrial production Jan.-Feb. +7.5% y/y vs f’cast +3.9% Retail sales +6.7% y/y vs f’cast +3.0% Investment in fixed assets +12.2% y/y, vs f’cast +5.0% Strength may not last as COVID cases jump – analysts BEIJING, March 15 (Reuters) – China’s economy rebounded in the first two months of 2022, with key indicators all beating analysts’ […]]]>
  • Industrial production Jan.-Feb. +7.5% y/y vs f’cast +3.9%
  • Retail sales +6.7% y/y vs f’cast +3.0%
  • Investment in fixed assets +12.2% y/y, vs f’cast +5.0%
  • Strength may not last as COVID cases jump – analysts

BEIJING, March 15 (Reuters) – China’s economy rebounded in the first two months of 2022, with key indicators all beating analysts’ expectations, although an increase in Omicron business, weak real estate and heightened global uncertainties weigh on the outlook.

Industrial production rose 7.5% in January-February from a year earlier, the fastest pace since June 2021 and up from a 4.3% increase seen in December, Tuesday showed data from the National Bureau of Statistics. This compared to a 3.9% rise expected by analysts in a Reuters poll.

Retail sales, a lagging indicator of consumption since the hit of COVID-19, rose 6.7% year-on-year amid rising demand during the Lunar New Year holidays and the Olympics. winter. It also marked the fastest clip since June last year and beat expectations for a 3.0% rise in the poll.

Join now for FREE unlimited access to Reuters.com

It posted a 1.7% gain in December.

The surprisingly strong performance of the world’s second-largest economy in the new year may have enabled the People’s Bank of China (PBOC) to keep its policy rates stable on Tuesday, said Iris Pang, chief economist for Greater China at ING, in a note.

The PBOC kept its one-year medium-term lending rate unchanged earlier in the day, dashing expectations of a cut, although investors believe policymakers may soon resume monetary easing to support the slowdown. economy. Read more

The statistics released combine economic data from January to February to help smooth out distortions caused by the Lunar New Year holiday, which fell in early February this year.

One of the data highlights was strong retail sales growth, which was boosted by sales of Winter Olympics-related products, such as ski gear and ice sports, Fu said. Linghui, spokesperson for the statistics bureau, at a press conference.

Bing mascot Dwen Dwen was an unexpected star of the Beijing Olympics, with thousands of fans queuing in sub-freezing temperatures to buy goods – from magnets and key rings to bags and soft toys – and factories scrambling to make more. Read more

The strong numbers came after growth lost momentum throughout last year due to a liquidity crunch in the housing market and stringent anti-virus measures that hit consumption.

“Indeed, every data point has bounced back, mainly because the political effects started early this year, with an easing in the infrastructure and real estate sectors. Restoration spending also remained relatively strong,” said Qu Qing, chief economist at Jianghai Securities.

However, analysts warn that any nascent recovery, which would help China reach an ambitious target of around 5.5% for 2022, could not be sustained due to the surge in COVID cases, a weak real estate market and the uncertain global recovery. Read more

Chinese stocks fell sharply on Tuesday as a rise in coronavirus cases overshadowed data and threatened the outlook.

“The momentum of economic recovery in January-February has been good. At the same time, we must also see that the external environment is still complex and severe, and China’s economic development faces many risks and challenges. “said Mr. Fu from the statistics office.

Analysts expect the central bank to continue to ease policy to support the economy.

“We still need to cut interest rates and reserve requirement ratios as soon as possible. There should be no hesitation in supporting easing policies,” said Wang Jun, chief economist at Zhongyuan Bank.

Premier Li Keqiang said last week that he was confident of achieving the economic growth target of around 5.5% for this year despite challenges including the war in Ukraine. Li also promised to provide more political support during the year. Read more

RESUMPTION OF INVESTMENTS IN INFRASTRUCTURES

Investments in fixed assets rose 12.2% in January-February from a year earlier, compared with a 5.0% increase predicted by a Reuters poll and 4.9% growth in 2021. The figure was the highest since July last year.

Investments in infrastructure rose 8.1%, helped by the move to this year’s early-loading 2022 local government special bonds.

Real estate investment rose 3.7% year on year in the first two months of 2022, following a 13.9% plunge in December, the data showed.

The slowdown in the housing market has also shown signs of easing, but sales are still mired in contraction while new construction starts have fallen by double digits.

“We continued to stabilize land prices, house prices and expectations, and there were positive changes in the real estate market,” Fu said.

China’s property market cooled last year as Beijing’s deleveraging drive triggered a liquidity crunch in some major property developers, leading to bond defaults, plummeting stock prices and suspended or suspended projects. left unfinished.

“The resurgence of COVID in several provinces is an additional drag on activity growth. Despite the relaxation of local real estate policy, real estate indicators, in particular new housing starts and land sales, have continued to Further policy easing would be needed to meet the challenging roughly 5.5% ‘growth target this year,’ Goldman Sachs analysts wrote in a note.

The national survey-based unemployment rate rose to 5.5% in February from 5.3% in January, but Fu said the rise was largely due to seasonal factors and the rate could drop after March.

Join now for FREE unlimited access to Reuters.com

Additional reporting by Ellen Zhang, Liangping Gao and Ryan Woo; Editing by Sam Holmes, Bernard Orr

Our standards: The Thomson Reuters Trust Principles.

]]>
China’s economy is increasingly isolated from the West https://bizchina-update.com/chinas-economy-is-increasingly-isolated-from-the-west/ Sat, 12 Feb 2022 08:00:00 +0000 https://bizchina-update.com/chinas-economy-is-increasingly-isolated-from-the-west/ As the Beijing Winter Olympics begin, all eyes are on China. There have been a lot of reports about China’s cold relations with the West and its persecution of Uyghurs and other minorities, but there is also a lot to be said about China’s economy. China’s great rise in recent decades has been the great […]]]>

As the Beijing Winter Olympics begin, all eyes are on China. There have been a lot of reports about China’s cold relations with the West and its persecution of Uyghurs and other minorities, but there is also a lot to be said about China’s economy.

China’s great rise in recent decades has been the great economic success of our time, lifting hundreds of millions of people out of poverty and giving wheels to the global economy in the years following the financial crisis of 2007-09.

Over the past decade, however, the miracle has become a little more ordinary as growth has gradually slowed. China has struggled to continue growing its exports at the same pace year after year, especially in the face of weaker international demand for its products, including due to the trade war with the United States. Other problems included an aging population and the fact that growth had become increasingly dependent on debt, which was unsustainable.

China’s economic growth 1997-2021

Trade Economics/National Bureau of Statistics of China, CC BY

China appears to have weathered the pandemic better than many major economies, having contained the virus so aggressively. Yet the situation has since deteriorated as new national outbreaks of Covid, including the new omicron variant, have caused further economic disruption.

The effect of Omicron on other major economies is also not good news for Chinese exports. Nor has the resurgence of inflation in many countries prompted the US Federal Reserve and other central banks to threaten to raise interest rates and end money creation via quantitative easing. This should further dampen demand for Chinese products.

China’s debt has also become an even bigger problem. Leading property developer Evergrande’s financial struggles in 2021 grabbed headlines, but excessive debt is rampant throughout the real estate industry and beyond. If the bubble bursts, it could lead to a prolonged downturn that would significantly damage the wider economy.

The government has pressured big business to reduce debt, while limiting borrowing in the property sector and cracking down on informal lending across the country. He also sent a warning to excess borrowers by his willingness to let Evergrande default.

Falling exports and debt reduction mean China is heading for a slowdown: the World Bank projects its economic growth to be just over 5% in 2022, down from 8% in 2021.

China’s challenges

More broadly, China’s traditional growth model based on exports, infrastructure and real estate investment seems to have run its course. The nation faces a difficult rebalancing act as it aims to shift to a much greater reliance on Chinese households consuming goods and services, while having to transition to a much less carbon-intensive economy.

Unfortunately for the ruling Communist Party, the best way to achieve this rebalancing is arguably to implement reforms that would limit government influence in Chinese life. For example, the World Bank believes China must make it easier for businesses to fail and allow greater private competition in sectors like education and health to increase productivity. It also recommends allowing workers to move around the country by removing the hukou registration system in cities, since this system stipulates where someone permanently resides.

Some World Bank recommendations involve greater government intervention, such as making the tax system more progressive to encourage consumers to spend more, and increasing public spending on health and education so people don’t have to. need to save so much. Generally speaking, however, further liberalization is on the agenda – and seems to be the right way forward in my view.

Yet China has become more interventionist in the Xi era, cracking down on everything from tech billionaires to the number of hours children can play video games each day. Meanwhile, China’s zero Covid strategy has involved tightly sealed borders, rapid citywide lockdowns and mass testing.

China adopted this strategy partly out of fear that its poor healthcare system would be completely overwhelmed by Covid, and more recently as a means of ensuring the smooth running of the Winter Olympics. However, the climate in China is such that some commentators fear that it will reopen, that the health crisis will turn into a political crisis of more committed isolation.

China is therefore at a crossroads. On the one hand, it wants to play a bigger role in the global economy, as evidenced by its Belt and Road Initiative to boost infrastructure development around the world in exchange for closer ties with Beijing.

But there is a contradiction between continuing to engage in global trade and the Chinese government’s instinct for technological self-sufficiency and local innovation. Trade liberalization also involves, for example, opening up the banking sector to foreign lenders to make it more efficient. However, we are far from Beijing’s interventionist approach. Indeed, the fact that banks, which are partly state-owned, were mandated to lend to state-owned enterprises in poor financial condition was the cause of many debt problems in the first place.

Unfortunately, the indications are that China is more likely to move towards greater western isolationism. This could mean restricting visits to the country and focusing more on domestic consumption than global trade. We could see him moving further away from globalization via trade wars, as well as imposing more capital controls to make it harder for money to move in and out of the country. Clearly, China is acting partly out of provocation from the West, but its overall policy shift is to a large extent home-grown.

As with the Winter Olympics, where China tries to separate the athletes from its people, the nation also behaves similarly towards the rest of the world. What should be a celebration of international cooperation is happening at a time when the exact opposite is happening.The conversation

Kate Phylaktis, Professor of International Finance and Director, Emerging Markets Group, City, University of London

This article is republished from The Conversation under a Creative Commons license. Read the original article.

]]>
Winter Olympics promote new growth points for China’s economy https://bizchina-update.com/winter-olympics-promote-new-growth-points-for-chinas-economy/ Fri, 11 Feb 2022 08:00:00 +0000 https://bizchina-update.com/winter-olympics-promote-new-growth-points-for-chinas-economy/ Two curling stone-shaped robots stretched their arms below the surface of the water, each carrying an Olympic torch, as the flame passed from one to the other. The scenes unfolded during a special show held in Beijing’s icy Yongding River ahead of the Beijing 2022 Winter Olympics, and this rendezvous between two robotic torchbearers was […]]]>

Two curling stone-shaped robots stretched their arms below the surface of the water, each carrying an Olympic torch, as the flame passed from one to the other.

The scenes unfolded during a special show held in Beijing’s icy Yongding River ahead of the Beijing 2022 Winter Olympics, and this rendezvous between two robotic torchbearers was the first of its kind in history. Olympic.

The ongoing 2022 Winter Olympics have showcased not only high-level sporting prowess but also futuristic technological extravaganza and appealing appeal to winter sports, which hold the potential to drive economic growth.

Forward-looking technology

From robots at the torch relay to smart beds and digital currency at the Olympic Village, futuristic tech aplenty at the Beijing Winter Olympics has swept across social media, and some may even find its way into people’s daily lives. .

“I am proud to show China’s technological progress in robots to the world,” said Tian Qiyan, who led the torch relay robot development team at China’s Shenyang Institute of Automation. Chinese Academy of Sciences.

China’s robot industry has grown rapidly in recent years, with industry revenue exceeding 100 billion yuan (about $15.7 billion) in 2020 and robot density in manufacturing nearly doubling the global average, according to the Ministry of Industry and Information Technology.

“Robots and relevant technologies developed for the Beijing Winter Olympics will be applied to scientific research and civilian uses in the future,” Tian said.

In addition to robots, some technologies designed to improve athlete performance at the Games are also expected to enter the wider market.

Huo Bo, a professor at the School of Astronautics, Beijing Institute of Technology, led a team to develop an intelligent training management system, which can provide personalized and intelligent training assistance for the big air freestyle skiing, bobsleigh and many other winter Olympic events.

“This set of core technical equipment and technology is relatively mature and cutting-edge in this field,” Huo said.

After serving training in the Winter Olympics, the devices will be used in fields such as rehabilitation training, health management and scientific research, Huo added.

Boost for winter sports, tourism

The growing popularity of winter sports brought by the Winter Olympics has also boosted the sports and tourism market, even in places with little snowfall.

Tan Zizhe, a 10-year-old boy living in Chongqing Municipality in southwest China, developed a passion for snowboarding in 2020 under the guidance of his father. During this winter vacation, Tan spent almost every day on an indoor skating rink in the suburbs of Chongqing.

Known for its scorching summers, Chongqing has a year-round warm climate and participation in winter sports was low until the approach of the Winter Olympics.

Statistics from the Chongqing Winter Sports Administration Center showed that in 2018, less than 10,000 people participated in winter sports, but the number jumped to over 1.5 million by the end of 2021.

Thanks to the construction of more skating and indoor skiing facilities in recent years, Chongqing residents can enjoy winter sports all year round, said Ke Ping, director of the administrative center.

In addition to participating in sports, people are also spending more on winter sports shopping and tourism.

Statistics on e-commerce platforms including Alibaba showed a sharp increase from previous years in sales of skiing and skating equipment during the Spring Festival holiday.

In Chongqing, snow and ice tourism has gained popularity during the holidays, with corresponding orders up more than 30 percent from the same period last year, the local culture and tourism department said. .

According to the National Bureau of Statistics, as of October 2021, 346 million Chinese have participated in ice and snow sports.

Changbai Mountains, a popular tourist destination in northeast China’s Jilin Province, is cashing in on winter tourism fever by marketing hot springs and skating resorts to lure visitors.

“Previously, the scenic spot had more tourists in summer, but with the increase in snow and ice activities, it has become a popular destination even in winter,” said Wang Yaxian, a local shopkeeper.

]]>
China’s economy starts the year faltering https://bizchina-update.com/chinas-economy-starts-the-year-faltering/ Sun, 30 Jan 2022 08:00:00 +0000 https://bizchina-update.com/chinas-economy-starts-the-year-faltering/ BY JONATHAN CHENG | UPDATED JANUARY 30, 2022 12:54 AM EST Manufacturing and services sector surveys show pullback in January as latest Covid-19 outbreaks hit domestic demand China’s economy started the year on an uncertain footing as Covid-19 outbreaks disrupted factory activity and consumer spending, according to a trio of manufacturing and service sector surveys. […]]]>

BY JONATHAN CHENG | UPDATED JANUARY 30, 2022 12:54 AM EST

Manufacturing and services sector surveys show pullback in January as latest Covid-19 outbreaks hit domestic demand

China’s economy started the year on an uncertain footing as Covid-19 outbreaks disrupted factory activity and consumer spending, according to a trio of manufacturing and service sector surveys. published on Sunday.

Two gauges of China’s manufacturing activity – one official and one private – each retreated in January, while a third measure, of the country’s service sector, shed light on the heavy toll that the latest spike in coronavirus infections coronavirus has inflicted on domestic demand.

China’s official manufacturing purchasing managers’ index fell to 50.1 in January, the National Bureau of Statistics said, from 50.3 in December and just above the 50 mark that separates the expansion of contraction activity.

The result was in line with the median forecast of economists polled by The Wall Street Journal and marked the third month in a row that the measure has been in expansionary territory.

However, the sub-index measuring total new orders contracted further, falling to 49.3 in January, while new export orders improved to 48.4 in January, still in contraction territory. . Factory output in January weakened to 50.9 and likely would have been even weaker had it not been for an acceleration in consumer goods production ahead of the Lunar New Year holiday which begins on February 1, the statistics office said. .

Meanwhile, the Caixin China manufacturing PMI, a private gauge that’s more focused on smaller private companies than the official manufacturing index – which is weighted more towards large state-owned companies – fell to 49.1 in January, its highest. low level since February 2020, at the peak of the initial Covid-19 outbreak in China.

The sharp decline in Caixin’s manufacturing PMI, from a reading of 50.9 in December, came as the production and total new orders sub-indexes fell to their lowest levels since August, said Caixin.

Overseas demand also contracted at a faster pace than usual as the rapid spread of the Omicron variant of the coronavirus dampened global consumer sentiment.

Weak demand prompted manufacturers to slow their pace of hiring in January to cut costs, the Caixin employment sub-index showed.

“This year, policymakers should focus on stability,” Wang Zhe, an economist at Caixin Insight Group, said in a press release accompanying the data release on Sunday.

Separate data on China’s services sector, also released by China’s statistics bureau on Sunday, showed renewed weakness in a part of the economy that has lagged the broader pandemic recovery for nearly two years.

While Chinese leaders have stressed the importance of orienting the Chinese economy more towards domestic consumption, this effort has repeatedly been hampered by new Covid outbreaks and the government’s strict measures to contain them.

China’s official non-manufacturing PMI, which includes both services and construction activity, fell to 51.1 in January from 52.7 in December, the statistics bureau said on Sunday.

The sub-index measuring services activity fell to 50.3 in January, the lowest level in five months, from 52.0 in December, dragged down by coronavirus outbreaks across the country.

Sub-indices tracking sectors of the economy requiring close human contact, including hospitality and consumer services, fell below 45, reflecting lower consumer willingness to spend, Zhao Qinghe said, Senior Statistician at the Chinese Bureau of Statistics.

The sub-index measuring construction activity also weakened to 55.4 in January, from 56.3 the previous month, as weather conditions and the return trips of construction workers for the New Year’s Eve festival Lunar year have taken their toll, the statistics office said.

Economic data releases this year give a first glimpse of the health of the world’s second-largest economy, which quickly lost momentum in the final months of 2021.

For the whole of last year, China recorded an expansion of gross domestic product of 8.1% compared to the previous year, but the growth profile was unbalanced. In the third and fourth quarters, year-over-year GDP growth was 4.9% and 4.0%, respectively, which is below China’s pre-Covid growth trajectory.

Late last year, Chinese leaders began to signal a move towards promoting stability rather than the structural reforms and disciplines they unleashed on a number of key drivers of economic growth, including the real estate, technology and private education sectors.

The Chinese central bank lowered its key benchmark rates twice, in December and January, while freeing up to lend a large sum of funds that it had forced banks to keep in reserve. Authorities have also recently encouraged banks to provide more home loans and made it easier for cash-strapped property developers to offload troubled assets.

However, Sunday’s release of relatively weak PMI numbers “indicates that the government’s policy easing measures have yet to trickle down to the real economy,” Zhang Zhiwei, an economist at Pinpoint Asset Management, wrote in a statement. note.

Zhang said the pandemic, combined with the collapse of the real estate sector, remained the main risks for the Chinese economy. He predicted that the government would further increase political support in the coming months, including through increased budget spending.

Last week, Chinese Premier Li Keqiang reiterated his promises to give more tax breaks to companies, especially small private companies.

More broadly, economists widely expect Beijing to roll out more easing measures as leaders prioritize stability in a politically important year when Chinese leader Xi Jinping will almost certainly seek and obtain a third term in office.

Across China, provincial and regional governments have set economic targets for 2022 that are roughly in line with last year’s growth rates, despite the heightened headwinds the economy is currently facing.

With the exception of Tianjin, a directly administered municipality that has yet to release its 2022 target, the country’s other 30 provincial governments directly administered by Beijing have a weighted average GDP growth target this year of 6.1 percent. , according to China. International Capital Corp., a Chinese investment bank.

This matched the weighted average GDP target set by all provinces and municipalities in 2021 and close to the national target of “6.0% or more” set in March 2021 by China’s top legislature, the CICC said. . Beijing is expected to release its annual growth target for 2022 in early March.

To subscribe to Mint Bulletins

* Enter a valid email address

* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our app now!!

]]>
China’s economy starts the year with a bang https://bizchina-update.com/chinas-economy-starts-the-year-with-a-bang/ Sun, 30 Jan 2022 05:54:00 +0000 https://bizchina-update.com/chinas-economy-starts-the-year-with-a-bang/ China’s economy started the year on an uncertain footing as Covid-19 outbreaks disrupted factory activity and consumer spending, according to a trio of manufacturing and service sector surveys. published on Sunday. Two gauges of China’s manufacturing activity – one official and one private – each retreated in January, while a third measure, of the country’s […]]]>

China’s economy started the year on an uncertain footing as Covid-19 outbreaks disrupted factory activity and consumer spending, according to a trio of manufacturing and service sector surveys. published on Sunday.

Two gauges of China’s manufacturing activity – one official and one private – each retreated in January, while a third measure, of the country’s service sector, shed light on the heavy toll that the latest spike in coronavirus infections coronavirus has inflicted on domestic demand.

China’s official manufacturing purchasing managers’ index fell to 50.1 in January, the National Bureau of Statistics said, from 50.3 in December and just above the 50 mark that separates the expansion of contraction activity.

The result was in line with the median forecast of economists polled by The Wall Street Journal and marked the third month in a row that the measure has been in expansionary territory.

However, the sub-index measuring total new orders contracted further, falling to 49.3 in January, while new export orders improved to 48.4 in January, still in contraction territory. . Factory output in January weakened to 50.9 and likely would have been even weaker had it not been for an acceleration in consumer goods production ahead of the Lunar New Year holiday which begins on February 1, the statistics office said. .

Container ships at a terminal in the port of Taicang in China’s Jiangsu province.


Photo:

Finn / Costfoto/Zuma Press

Meanwhile, the Caixin China manufacturing PMI, a private gauge that’s more focused on smaller private companies than the official manufacturing index – which is weighted more towards large state-owned companies – fell to 49.1 in January, its highest. low level since February 2020, at the peak of the initial Covid-19 epidemic in China.

The sharp decline in Caixin’s manufacturing PMI, from a reading of 50.9 in December, came as the production and total new orders sub-indexes fell to their lowest levels since August, said Caixin.

Overseas demand also contracted at a faster than usual rate as the rapid spread of the Omicron variant of the coronavirus dampened global consumer sentiment.

Weak demand prompted manufacturers to slow their pace of hiring in January to cut costs, the Caixin employment sub-index showed.

“This year, policymakers should focus on stability,” Wang Zhe, an economist at Caixin Insight Group, said in a press release accompanying the data release on Sunday.

Separate data on China’s services sector, also released by China’s statistics bureau on Sunday, showed renewed weakness in a part of the economy that has been lagging the broader pandemic recovery for nearly two years.

The 1000 Trees shopping center in Shanghai.


Photo:

alex plavevski / Shutterstock

While Chinese leaders have stressed the importance of orienting the Chinese economy more towards domestic consumption, this effort has repeatedly been hampered by new Covid outbreaks and the government’s strict measures to contain them.

China’s official non-manufacturing PMI, which includes both services and construction activity, fell to 51.1 in January from 52.7 in December, the statistics bureau said on Sunday.

The sub-index measuring services activity fell to 50.3 in January, the lowest level in five months, from 52.0 in December, dragged down by coronavirus outbreaks across the country.

Sub-indices tracking sectors of the economy requiring close human contact, including hospitality and consumer services, fell below 45, reflecting lower consumer willingness to spend, Zhao Qinghe said, Senior Statistician at the Chinese Bureau of Statistics.

The sub-index measuring construction activity also weakened to 55.4 in January, from 56.3 the previous month, as weather conditions and the return trips of construction workers for the New Year’s Eve festival Lunar year have taken their toll, the statistics office said.

Economic data releases this year give a first glimpse of the health of the world’s second-largest economy, which quickly lost momentum in the final months of 2021.

Chinese authorities encouraged banks to provide more home loans and made it easier for cash-strapped property developers to offload troubled assets.


Photo:

Andrea Verdelli/Bloomberg News

For the whole of last year, China recorded gross domestic product growth of 8.1% over the previous year, but the growth profile was unbalanced. In the third and fourth quarters, year-over-year GDP growth was 4.9% and 4.0%, respectively, which is below China’s pre-Covid growth trajectory.

Late last year, Chinese leaders began to signal a move towards promoting stability rather than the structural reforms and disciplines they unleashed on a number of key drivers of economic growth, including the real estate, technology and private education sectors.

The Chinese central bank lowered its key benchmark rates twice, in December and January, while freeing up to lend a large sum of funds that it had forced banks to keep in reserve. Authorities have also recently encouraged banks to provide more home loans and made it easier for cash-strapped property developers to offload troubled assets.

However, Sunday’s release of relatively weak PMI numbers “indicates that the government’s policy easing measures have yet to trickle down to the real economy,” Zhang Zhiwei, an economist at Pinpoint Asset Management, wrote in a statement. note.

Zhang said the pandemic, combined with the collapse of the real estate sector, remained the main risks for the Chinese economy. He predicted that the government would further increase political support in the coming months, including through increased budget spending.

Last week, Chinese Premier Li Keqiang reiterated his promises to give more tax breaks to companies, especially small private companies.

More broadly, economists widely expect Beijing to roll out more easing measures as leaders prioritize stability in a politically important year when Chinese leader Xi Jinping will almost certainly seek and obtain a third term in office.

Across China, provincial and regional governments have set economic targets for 2022 that are roughly in line with last year’s growth rates, despite the heightened headwinds the economy is currently facing.

With the exception of Tianjin, a directly administered municipality that has yet to release its 2022 target, the country’s other 30 provincial governments directly administered by Beijing have a weighted average GDP growth target this year of 6.1 percent. , according to China. International capital company.

a Chinese investment bank.

This matched the weighted average GDP target set by all provinces and municipalities in 2021 and close to the national target of “6.0 percent or more” set in March 2021 by China’s top legislature, the CICC said. . Beijing is expected to release its annual growth target for 2022 in early March.

-Grace Zhu contributed to this article.

Write to Jonathan Cheng at Jonathan.Cheng@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

]]>
China’s economy is slowing, a worrying sign for the world https://bizchina-update.com/chinas-economy-is-slowing-a-worrying-sign-for-the-world/ Mon, 17 Jan 2022 19:52:30 +0000 https://bizchina-update.com/chinas-economy-is-slowing-a-worrying-sign-for-the-world/ BEIJING – Construction and real estate sales have fallen. Small businesses have closed due to rising costs and weak sales. Local authorities in debt reduce the salaries of civil servants. China’s economy slowed markedly in the final months of last year as government measures to curb property speculation also hurt other sectors. Lockdowns and travel […]]]>

BEIJING – Construction and real estate sales have fallen. Small businesses have closed due to rising costs and weak sales. Local authorities in debt reduce the salaries of civil servants.

China’s economy slowed markedly in the final months of last year as government measures to curb property speculation also hurt other sectors. Lockdowns and travel restrictions to contain the coronavirus have also weighed on consumer spending. Strict regulations on everything from internet businesses to after-school tutoring businesses have sparked a wave of layoffs.

China’s National Bureau of Statistics said Monday that economic output from October to December was only 4% higher than the same period a year earlier. This is a deceleration from the 4.9% growth in the third quarter, from July to September.

Global demand for consumer electronics, furniture and other home comforts during the pandemic has produced record exports for China, preventing its growth from stalling. For the whole of last year, China’s economic output was 8.1 percent higher than in 2020, the government said. But much of the growth took place in the first half of last year.

The snapshot of the Chinese economy, the main engine of global growth in recent years, reinforces expectations that the global economic outlook is beginning to darken. Worse still, the Omicron variant of the coronavirus is now beginning to spread in China, leading to more restrictions across the country and raising fears of further disruption to supply chains.

The slowing economy poses a dilemma for Chinese leaders. The measures they have imposed to tackle income inequality and curb businesses are part of a long-term plan to protect the economy and national security. But officials fear they could cause near-term economic instability, especially in a year of unusual political importance.

Next month, Beijing will host the Winter Olympics, which will shine the international spotlight on the country’s performance. In the fall, Xi Jinping, the Chinese leader, is expected to seek a third five-year term at a Communist Party congress.

Mr. Xi sought to strike an optimistic note. “We have every confidence in the future of China’s economy,” he said in a speech to a virtual session of the World Economic Forum on Monday.

But with slowing growth in his country, slowing demand and debt still at near-record levels, Mr. Xi could face some of the biggest economic challenges since Deng Xiaoping began to pull the country out of debt. its Maoist yoke four decades ago.

“I fear that the operation and development of China’s economy in the coming years will be relatively difficult,” Li Daokui, a prominent economist and adviser to the Chinese government, said in a speech late last month. “Looking at the five years as a whole, this is perhaps the most difficult period since our reform and opening up 40 years ago.”

China also faces the problem of a rapidly aging population, which could create an even greater burden on the Chinese economy and its workforce. The National Bureau of Statistics said on Monday that China’s birth rate had fallen sharply last year and was now barely higher than the death rate.

As the costs of many raw materials have risen and the pandemic has prompted some consumers to stay home, millions of private businesses have collapsed, most of them small and family-owned.

This is a big concern because private companies are the backbone of China’s economy, accounting for three-fifths of output and four-fifths of urban employment.

Kang Shiqing invested much of her savings nearly three years ago to open a women’s clothing store in Nanping, a river town in southeastern Fujian province. But when the pandemic hit a year later, customer numbers dropped drastically and never recovered.

As in many countries, there has been a broad shift in China towards online shopping, which can undermine stores by using less labor and operating from cheap warehouses. Mr. Kang was forced to pay high rent for his store despite the pandemic. He finally closed it in June.

“We can barely survive,” he said.

Another lingering difficulty for small businesses in China is the high cost of borrowing money, often at double-digit interest rates from private lenders.

Chinese leaders are aware of the challenges faced by private companies. Premier Li Keqiang has promised further tax and fee cuts to help the country’s many struggling small businesses.

On Monday, China’s central bank made a small move to cut interest rates, which could help slightly reduce interest charges for the country’s heavily indebted property developers. The central bank cut its benchmark interest rates for one-week and one-year loans by about a tenth of a percentage point.

The construction and equipping of new housing represents a quarter of the Chinese economy. Large loans and widespread speculation have helped the country erect the equivalent of 140 square feet of new housing for every urban resident over the past two decades.

This fall, the sector faltered. The government wants to limit speculation and deflate a bubble that had made new housing unaffordable for young families.

China Evergrande Group is just the largest and most visible of a long list of real estate developers in China that have faced serious financial difficulties in recent times. Kaisa Group, China Aoyuan Property Group and Fantasia are among other developers who have struggled to make payments as bond investors grow wary of lending money to China’s property sector.

As real estate companies try to conserve cash, they are launching fewer construction projects. And that has been a big problem for the economy. The price of steel rebar for concrete in apartment towers, for example, fell by a quarter in October and November before stabilizing at a much lower level in December.

Falling house prices in small towns have hurt the value of people’s assets, making them less willing to spend. Even in Shanghai and Beijing, apartment prices are no longer rising.

There have been faint signs of renewed government support for the property sector in recent weeks, but no sign of a return to lavish lending by state-controlled banks.

Evergrande’s financial distress “is a signal that money will be pushed from real estate to the stock market,” said Hu Jinghui, an economist who is a former chairman of the China Alliance of Real Estate Agencies, a trade group. national. “Policies can be relaxed, but there can be no turning back.”

The slowdown in the housing market has also hurt local governments, which rely on land sales as their main source of revenue.

The International Monetary Fund estimates that government land sales each year have raised funds equivalent to 7% of the country’s annual economic output. But in recent months, developers have scaled back land purchases.

Starved of revenue, some local governments have halted hiring and cut bonuses and benefits for civil servants, prompting widespread complaints on social media.

In Hangzhou, the capital of Zhejiang province, a civil servant’s complaint about a 25% cut in her salary quickly spread on the internet. The city government did not respond to a fax requesting comment. In the northern province of Heilongjiang, the city of Hegang announced that it would no longer hire “junior” workers. City officials removed the ad from the government website after it came to public attention.

Some governments have also increased fees charged to businesses in an attempt to make up the shortfall.

Bazhou, a city in Hebei province, levied 11 times more fines for small businesses from October to December than in the first nine months of last year. Beijing has criticized the city for undermining a national effort to reduce the cost of doing business.

Strong foreign demand for Chinese exports, especially consumer goods, has spurred a domestic wave of investment in new factories, up 13.5 percent last year from 2020.

Some areas of consumer spending have been quite robust, notably the luxury sector, where sports cars and jewelry are selling well. Retail sales rebounded 12.5% ​​last year from pandemic-depressed levels in 2020. But retail sales fell in December from November as coronavirus restrictions kept some shoppers at home.

Few expect the government to allow a severe economic downturn this year ahead of the Communist Party Congress. Economists expect the government to ease restrictions on lending and increase public spending.

“The first half of the year will be tough,” said Zhu Ning, vice dean of the Shanghai Advanced Institute of Finance. “But then the second half will see a rebound.”

Li you contributed to the research.

]]>
Growth rate of the Chinese economy: how the surge in GDP will not stop the Chinese crisis | World | News https://bizchina-update.com/growth-rate-of-the-chinese-economy-how-the-surge-in-gdp-will-not-stop-the-chinese-crisis-world-news/ Mon, 17 Jan 2022 08:00:00 +0000 https://bizchina-update.com/growth-rate-of-the-chinese-economy-how-the-surge-in-gdp-will-not-stop-the-chinese-crisis-world-news/ Despite rising 8.1% during 2021, Chinese government is “under the triple pressure of demand contractions, supply shock and weakening expectations,” says National Bank chief from China. According to data from the National Bureau of Statistics, GDP grew by 4% year on year, or 2.5% less in the same period of 2020. However, quarter-on-quarter growth improved […]]]>

Despite rising 8.1% during 2021, Chinese government is “under the triple pressure of demand contractions, supply shock and weakening expectations,” says National Bank chief from China. According to data from the National Bureau of Statistics, GDP grew by 4% year on year, or 2.5% less in the same period of 2020.

However, quarter-on-quarter growth improved to 1.6% from a revised July-September rate of 0.7%.

The People’s Bank of China slashed a major lending rate for the first time since April 2020, to cushion a housing downturn and the effect of recurring restrictions as coronavirus cases breach the country’s zero Covid policy.

The country’s strict measures to eliminate all cases of coronavirus, with major cities having implemented closures in recent weeks, have highlighted the continuing weaknesses in consumption.

READ MORE: North Korea launches unidentified projectile fueling war fears

The ongoing decline has accelerated a looming demographic crisis that economists say could reshape the country’s economic vitality.

For years, China maintained its notorious “one child” policy for families, but it was scrapped in 2016 and replaced with a maximum of two children per parent.

In 2021, the country’s birth rate was 10.6 million – down from 12 million in 2020 – and is the lowest number since the founding of the People’s Republic of China in 1949.

The number of people aged 60 or younger also fell for the first time, while overall population growth was just 480,000.

The decline and rise in life expectancy that has accompanied China’s economic transformation over the past four decades means that there will soon be a decline in the number of people of working age relative to the growing number of people too old to work.

According to data released on Monday, China’s population grew again last year – but not by much – reaching 1.412 billion.

However, for the first time since the Great Leap Forward era 60 years ago, the number of those who died was remarkably close to the number born, at 10.1 million.

The result could be labor shortages, which could seriously harm one of China’s biggest goals – economic growth.

]]>
China’s economy slows as virus outbreaks disrupt recovery https://bizchina-update.com/chinas-economy-slows-as-virus-outbreaks-disrupt-recovery-4/ Wed, 15 Dec 2021 08:00:00 +0000 https://bizchina-update.com/chinas-economy-slows-as-virus-outbreaks-disrupt-recovery-4/ BEIJING (AP) — China said Wednesday its economy slowed in November, rocked by coronavirus outbreaks, weak demand and supply chain disruptions. Retail sales were weaker than in October and inflationary pressures are complicating efforts to spur growth at a time when developers’ tightening borrowing limits are dampening construction and sales in the all-important real estate […]]]>

BEIJING (AP) — China said Wednesday its economy slowed in November, rocked by coronavirus outbreaks, weak demand and supply chain disruptions.

Retail sales were weaker than in October and inflationary pressures are complicating efforts to spur growth at a time when developers’ tightening borrowing limits are dampening construction and sales in the all-important real estate sector. .

The Beijing Winter Olympics from February 4 to 20 are likely to have “limited overall impact”, National Bureau of Statistics spokesman Fu Linghui told reporters, as pandemic restrictions limit travel and other activites.

Fu said the global environment was becoming “more complex and severe”, but China still expects to meet its economic targets for this year.

The new coronavirus was first reported in China and the ruling Communist Party has defended its success in containing the pandemic. Sporadic outbreaks and the emergence of new variants of the virus remain a constant challenge for both public health policies and the country’s economic recovery.

Concerns have been raised about the economic price paid to keep the virus under control through repeated lockdowns and other strict measures, including limits on international travel.

The economy grew at a surprisingly slow annual rate of 4.9% in July-September, compared to 7.9% in April-June.

In November, retail sales increased by 3.9% over the previous year, against 4.% the previous month. Industrial production picked up only slightly, rising 3.8% last month from 3.5% in October.

Leaders promised tax cuts and support for entrepreneurs after the campaign to curb rising corporate debt sparked bankruptcies and defaults among property developers.

Investors are waiting to see what happens to Evergrande Group, according to a developer analyst, which looks increasingly likely to default on $310 billion in debt. Small developers defaulted on millions of dollars in debt or went bankrupt.

Meanwhile, a crackdown on what regulators say is improper behavior by Chinese tech giants, including Alibaba Group, the world’s biggest e-commerce platform, has prompted jittery investors to slash more than 1,000 billions of dollars the price of their shares abroad.

Fu seemed to dismiss these concerns.

“With the coordination of pandemic prevention and control and economic and social development, as well as the effective implementation of macro policy adjustments, the major economic and social development goals for this year are expected to be achieved,” he said. he declared. “There is still strong support for the economy to overcome the difficulties and remain stable next year.”

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

]]>
China’s economy slows as virus outbreaks disrupt recovery https://bizchina-update.com/chinas-economy-slows-as-virus-outbreaks-disrupt-recovery-3/ Wed, 15 Dec 2021 08:00:00 +0000 https://bizchina-update.com/chinas-economy-slows-as-virus-outbreaks-disrupt-recovery-3/ BEIJING (AP) — China said Wednesday its economy slowed in November, rocked by coronavirus outbreaks, weak demand and supply chain disruptions. Retail sales were weaker than in October and inflationary pressures are complicating efforts to spur growth at a time when developers’ tightening borrowing limits are dampening construction and sales in the all-important real estate […]]]>

BEIJING (AP) — China said Wednesday its economy slowed in November, rocked by coronavirus outbreaks, weak demand and supply chain disruptions.

Retail sales were weaker than in October and inflationary pressures are complicating efforts to spur growth at a time when developers’ tightening borrowing limits are dampening construction and sales in the all-important real estate sector. .

The Beijing Winter Olympics from February 4 to 20 are likely to have “limited overall impact”, National Bureau of Statistics spokesman Fu Linghui told reporters, as pandemic restrictions limit travel and other activites.

Fu said the global environment was becoming “more complex and severe”, but China still expects to meet its economic targets for this year.

The new coronavirus was first reported in China and the ruling Communist Party has defended its success in containing the pandemic. Sporadic outbreaks and the emergence of new variants of the virus remain a constant challenge for both public health policies and the country’s economic recovery.

Concerns have been raised about the economic price paid to keep the virus under control through repeated lockdowns and other strict measures, including limits on international travel.

The economy grew at a surprisingly slow annual rate of 4.9% in July-September, compared to 7.9% in April-June.

In November, retail sales increased by 3.9% over the previous year, against 4.% the previous month. Industrial production picked up only slightly, rising 3.8% last month from 3.5% in October.

Leaders promised tax cuts and support for entrepreneurs after the campaign to curb rising corporate debt sparked bankruptcies and defaults among property developers.

Investors are waiting to see what happens to Evergrande Group, according to a developer analyst, which looks increasingly likely to default on $310 billion in debt. Small developers defaulted on millions of dollars in debt or went bankrupt.

Meanwhile, a crackdown on what regulators say is improper behavior by Chinese tech giants, including Alibaba Group, the world’s biggest e-commerce platform, has prompted jittery investors to slash more than 1,000 billions of dollars the price of their shares abroad.

Fu seemed to dismiss these concerns.

“Through the coordination of pandemic prevention and control and economic and social development, as well as the effective implementation of macroeconomic policy adjustments, the major economic and social development goals for this year are expected to be achieved. “, did he declare. “There is still strong support for the economy to overcome the difficulties and remain stable next year.”

]]>
China’s economy slows as virus outbreaks disrupt recovery https://bizchina-update.com/chinas-economy-slows-as-virus-outbreaks-disrupt-recovery-2/ Wed, 15 Dec 2021 08:00:00 +0000 https://bizchina-update.com/chinas-economy-slows-as-virus-outbreaks-disrupt-recovery-2/ The Beijing Winter Olympics from February 4-20 are likely to have “limited overall impact”, National Bureau of Statistics spokesman Fu Linghui told reporters, as pandemic-related restrictions limit travel and other activities. Fu said the global environment was becoming “more complex and severe”, but China still expects to meet its economic targets for this year. The […]]]>

The Beijing Winter Olympics from February 4-20 are likely to have “limited overall impact”, National Bureau of Statistics spokesman Fu Linghui told reporters, as pandemic-related restrictions limit travel and other activities.

Fu said the global environment was becoming “more complex and severe”, but China still expects to meet its economic targets for this year.

The new coronavirus was first reported in China and the ruling Communist Party has defended its success in containing the pandemic. Sporadic outbreaks and the emergence of new variants of the virus remain a constant challenge for both public health policies and the country’s economic recovery.

Concerns have been raised about the economic price paid to keep the virus under control through repeated lockdowns and other strict measures, including limits on international travel.

The economy grew at a surprisingly slow annual rate of 4.9% in July-September, compared to 7.9% in April-June.

In November, retail sales increased by 3.9% over the previous year, against 4.% the previous month. Industrial production picked up only slightly, rising 3.8% last month from 3.5% in October.

Leaders promised tax cuts and support for entrepreneurs after the campaign to curb rising corporate debt sparked bankruptcies and defaults among property developers.

Investors are waiting to see what happens to Evergrande Group, according to a developer analyst, which looks increasingly likely to default on $310 billion in debt. Small developers defaulted on millions of dollars in debt or went bankrupt.

Meanwhile, a crackdown on what regulators say is improper behavior by Chinese tech giants, including Alibaba Group, the world’s biggest e-commerce platform, has prompted jittery investors to slash more than 1,000 billions of dollars the price of their shares abroad.

Fu seemed to dismiss these concerns.

“Through the coordination of pandemic prevention and control and economic and social development, as well as the effective implementation of macroeconomic policy adjustments, the major economic and social development goals for this year are expected to be achieved. “, did he declare. “There is still strong support for the economy to overcome the difficulties and remain stable next year.”

(Copyright 2021 by The Associated Press. All rights reserved.)

]]>