China

Plummeting iron ore prices on the basis of China’s property crisis might wipe out $3 billion from the government budget.
19Aug By Online DeskNo Comments
Asia, China, World

Plummeting iron ore prices on the basis of China’s property crisis might wipe out $3 billion from the government budget.

Plummeting iron ore prices could cost the federal government $3 billion in revenue, which is likely to push the budget further into deficit this financial year. China's property market is in a precarious state, which has seen demand for iron ore — the key component for making steel – drop significantly. Australia has done exceptionally well riding the boom in the Chinese economy. But the political and economic uncertainty surrounding the world's two biggest economies — the US and China — points to tougher times ahead. But that decline has accelerated in recent weeks, with prices now sitting around $82 per tonne, which is below the price the Treasury had anticipated at this point. It had forecast the iron ore price gradually declining to settle at $60 per tonne by the first qua...
Read More
Chinese steel giant warns of “long, cold winter”
16Aug By Online DeskNo Comments
China, World

Chinese steel giant warns of “long, cold winter”

The statement by China’s top steelmaking firm, which accounts for 7 percent of global output, that the industry faces a severe crisis, underscores the extent of the slowdown in the Chinese economy and its global significance. Outlining the company’s half-year position on Wednesday, Hu Vangming, chair of China Baowu Steel Group, said the “winter” would be “longer, colder and more difficult than we expected.” In comments to Bloomberg, he said in the process of resolving it, cash was more important than profit and “financial departments at all levels should pay more attention to the security of the company’s funding.” His remarks were echoed by Hou Augui, the general manager at the state-owned firm, who said “the current situation in the steel industry is more severe that the downtu...
Read More
Deep in economic woes, China faces rise in blue-collar workers-led unrest
16Aug mmBy Joe RodriguezNo Comments
China

Deep in economic woes, China faces rise in blue-collar workers-led unrest

Facing economic headwinds with almost all sectors, including property and manufacturing showing no signs of turnaround even in near future, China is now grappling with unrest among blue-collar workers as social safety nets and compensations that helped them overcome their day, today challenges, have started dissipating amidst harsh and discriminatory labour landscape in the East Asian country.  Subdued by a continued downturn in the property sector, which saw investment falling 10.1% in the first half of 2024 from a year earlier and low household demand, China’s economic growth slowed to 4.7% in the second quarter, from 5.3% in the first quarter of this year.  On the other hand, China’s Caixin/S&P Global manufacturing PMI (Purchasing Managers’ Index) sank to 49.8 i...
Read More
15Aug By Online DeskNo Comments
Asia, China, Market

China’s Economy at a Glance – August 2024

Overview There was nothing in China’s latest data release to fundamentally change our views around its economy – authorities continue to prioritise the supply side of the economy, which, in the face of subdued domestic demand, is expanding export volumes and leading to growing trade tensions with other major economies. Our forecasts are unchanged – we see growth at 4.7% this year (below the full year target) and easing further to 4.6% in 2025 and 4.4% in 2026. Growth in industrial production has trended lower in recent months, down to 5.1% yoy in July (compared with 5.3% yoy in June and 6.7% yoy in April). While conditions in construction related sectors remains weak, output in the electronics sector remains comparatively strong. There was a noticeable slowing in real investment...
Read More
Baowu Steel warns of a catastrophic catastrophe in China’s steel sector.
15Aug By Online DeskNo Comments
China, World

Baowu Steel warns of a catastrophic catastrophe in China’s steel sector.

China’s steel industry is facing a crisis more serious than the recessions of 2008 and 2015. The world’s largest steelmaker, China Baowu Steel Group, warned of this, Bloomberg reports. The crisis is likely to be longer and more severe than the steel sector expected, said Hu Wangming, chairman of Baowu Steel Group, at the company’s semi-annual meeting. The group produces about 7% of the world’s steel, and this message from it is likely to cause concern among competitors in Asia, Europe and North America who are trying to cope with the new wave of Chinese exports. Baowu Steel will focus on minimizing risks. The company recommends that financial departments at all levels pay more attention to the security of financing and strengthening control, including overdue payments and the d...
Read More
The threat to stock markets comes from China and the Middle East, not the United States.
12Aug By Online DeskNo Comments
China, World

The threat to stock markets comes from China and the Middle East, not the United States.

Back in the 1930s, the French government constructed what it thought was an impregnable defence system to prevent a repeat of the German invasion at the start of the first world war. The Maginot Line might have looked impressive but proved to be a white elephant because when the attack came in 1940 it was in a different place altogether. In the past week the financial markets have displayed something of a Maginot Line mentality. They are right to think there is a threat lurking out there but they are wrong to think the biggest danger is a recession in the US. The real threat comes from elsewhere. To be sure, the US economy is slowing down, but it is not remotely close to recession. Unemployment is rising but from historically low levels. The US central bank, the Feder...
Read More
Risk or opportunity? Outcomes for China amid worries of a US recession
8Aug By Online DeskNo Comments
China, World

Risk or opportunity? Outcomes for China amid worries of a US recession

Global stock markets, particularly those in Asia, experienced a significant downturn on 5 August 2024, with the Nikkei 225 Index shedding 12.4%, its worst day since the 1987 Black Monday crash. A confluence of factors, including fears of a US recession, had triggered a massive sell-off in stock exchanges worldwide. The ripple effects of a potential US recession are profound and far-reaching. As the US is a major consumer and importer, a slowdown in the American economy can significantly dampen global demand, impacting export-oriented economies in Asia, which rely heavily on the US market. This is particularly concerning given that the US accounts for a substantial share of many Asian countries’ exports. According to the World Bank, the US accounts for more than 15% of China’s and South...
Read More
6Aug By Online DeskNo Comments
China, Market

The Actual Economic Crisis in China

The Chinese economy is stuck. Following Beijing’s decision, in late 2022, to abruptly end its draconian “zero COVID” policy, many observers assumed that China’s growth engine would rapidly reignite. After years of pandemic lockdowns that brought some economic sectors to a virtual halt, reopening the country was supposed to spark a major comeback. Instead, the recovery has faltered, with sluggish GDP performance, sagging consumer confidence, growing clashes with the West, and a collapse in property prices that has caused some of China’s largest companies to default. In July 2024, Chinese official data revealed that GDP growth was falling behind 
Read More
6Aug By Online DeskNo Comments
China, Market

China’s Real Economic Crisis

Zongyuan Zoe Liu is Maurice R. Greenberg Fellow for China Studies at the Council on Foreign Relations and the author of Sovereign Funds: How the Communist Party of China Finances Its Global Ambitions. The Chinese economy is stuck. Following Beijing’s decision, in late 2022, to abruptly end its draconian “zero COVID” policy, many observers assumed that China’s growth engine would rapidly reignite. After years of pandemic lockdowns that brought some economic sectors to a virtual halt, reopening the country was supposed to spark a major comeback. Instead, the recovery has faltered, with sluggish GDP performance, sagging consumer confidence, growing clashes with the West, and a collapse in property prices that has caused some of China’s largest companies to default. In July 2024, Chinese o...
Read More
2Aug By Online DeskNo Comments
Asia, China, Market

How Chinese loans trapped Pakistan’s economy

After cash-strapped Pakistan secured a new $7 billion (€6.5 billion) bailout package from the International Monetary Fund (IMF) in July, Islamabad has started talks with Beijing on reprofiling billions in Chinese debt as it seeks to enact economic reforms. On the table are proposals to delay at least $16 billion in energy sector debt to China, along with extending the term of a $4 billion cash loan facility due to depleting foreign exchange reserves. Last week, Pakistani Finance Minister Muhammad Aurangzeb was in Beijing to present proposals on extending the maturity of debt for nine power plants built by Chinese companies under the multibillion-dollar Pakistan China Economic Corridor (CPEC). On Friday, Prime Minister Shehbaz Sharif told a feder...
Read More