China

Would China’s latest stimulus be sufficient to boost its economy?
17Oct mmBy Joe RodriguezNo Comments
Asia, China, Market

Would China’s latest stimulus be sufficient to boost its economy?

In September, China’s central bank announced its most aggressive measures since the pandemic to get its economy back on track after it became clear the country might miss its 5 percent gross domestic product (GDP) growth target for 2024. The world’s second-largest economy is still struggling from the lingering side-effects of COVID-19 – when China implemented some of the longest and harshest lockdowns – to the collapse of its property sector in 2021, and deeper societal changes like a falling birthrate and ageing population. Beijing has so far avoided the kind of 4 trillion RMB ($586bn) stimulus it used in 2008 following the global financial crisis, but its latest moves have been met with a positive response from investors. Observers, however, wonder whether it will be enough. Wh...
Read More
<strong>China’s stimulus plan disappoints</strong>
15Oct mmBy Joe RodriguezNo Comments
China

China’s stimulus plan disappoints

China's recent stimulus plan has left many analysts and investors underwhelmed, as it falls short of addressing the deep-rooted economic challenges facing the country. Despite hopes for a robust package to revive growth, the measures announced have been seen as insufficient to tackle issues such as sluggish consumer spending, mounting debt, and a faltering property market. The plan includes modest tax cuts, increased infrastructure spending, and support for small businesses, but critics argue that these steps lack the boldness needed to spur significant economic recovery. Additionally, the plan's limited scope has raised concerns about the government's commitment to structural reforms and long-term economic stability. As a result, market reactions have been tepid, with stock indices a...
Read More
A detailed examination of China’s economic predicament and the ways in which inexperience is escalating it
15Oct mmBy Joe RodriguezNo Comments
China, Market

A detailed examination of China’s economic predicament and the ways in which inexperience is escalating it

This is the first in a three-part series delving into the unprecedented challenges China is facing on its road to economic recovery, from inexperience in dealing with such crises to the compounding implications of internal demographic shifts and external trade hurdles. The topsy-turvy roller-coaster ride that has seen China’s economy teetering on the rails for the past four years has left Zack Yao clinging to whatever business he can muster while struggling to determine when the wild ride will end. At 37 years old, the seller of electric power tools in the eastern province of Zhejiang has never experienced anything like the series of ups and downs that accompanied China’s pandemic years and subsequent attempts to return to economic normality. “I can still feel the sting...
Read More
Can China’s lethargic economy be revived by the massive stimulus spending the government is planning?
15Oct mmBy Joe RodriguezNo Comments
Asia, China, Market

Can China’s lethargic economy be revived by the massive stimulus spending the government is planning?

China’s relentless economic growth used to be the marvel of the world. Oh, what a memory. The past couple of years have seen China contend with an economic slowdown amid colliding crises, many of which make it internationally unique. Consumer prices have been approaching deflationary territory, there’s an oversupply of housing, and youth unemployment has soared. Mounting pressure has forced the Chinese government to step in. Over the past month, Beijing has put forward a set of significant economic stimulus measures aimed at reviving China’s faltering economy. According to a research note by Deutsche Bank, this stimulus could potentially become “the largest in history” in nominal terms. But there’s still a lot we don’t know. So what kinds of measures that are ...
Read More
14Oct mmBy Joe RodriguezNo Comments
Asia, China, Market, World

Goldman Sachs upgraded their predictions for China’s economic expansion.

Analysts expect China's GDP to grow by 4.9% in 2024 Goldman Sachs has improved its forecasts for China’s economic growth in 2024 and 2025, Bloomberg  The forecast has been improved on the back of Beijing’s unveiling of a number of stimulus measures, including recent plans to increase government spending. Goldman Sachs expects China’s GDP to grow by 4.9% this year, up from 4.7% previously forecast. According to a new research note, the investment bank also raised its forecast for Chinese economic growth in 2025 to 4.7% (previously 4.3%). On October 12, China promised to “significantly increase” debt issuance to revive its economy, Reuters writes, but left investors guessing about the total amount of the stimulus package. Finance Minister Lan Foan said: Beijing will help...
Read More
14Oct mmBy Walter ParezNo Comments
Asia, China, Market

The pendulum of Chinese economic policy has swung in favor of stimulus, but moderate expectations are advised.

Policymakers in Beijing have spent the past three weeks trying to convince the world that they are determined to deliver meaningful support to China’s sagging economy.  Since late September statements have come from the central bank, which promised to cut interest rates, release liquidity, and provide funding to securities firms; from the politburo, which said it wanted to stabilize the real estate market, boost the capital market and shift towards looser fiscal and monetary policy; from the government’s main planning body, which promised a package of policies to support domestic demand; and from the finance minister himself, who at the weekend committed to issue more debt to recapitalize banks, support local governments and aid unhappy consumers. Though details have been scant...
Read More
China’s stimulus plan targets its largest debt wall.
14Oct mmBy Joe RodriguezNo Comments
Asia, China

China’s stimulus plan targets its largest debt wall.

Chinese policymakers trying to fire up growth in the world’s second-largest economy appear intent on smashing through a wall of debt, opens new tab that poses a systemic financial risk and on not repeating past mistakes in delivering fiscal stimulus. That is some consolation for the fact that Beijing, so far, has mapped out only half of a plan. At a highly anticipated press conference on Saturday, the Ministry of Finance signaled it is ready to significantly boost spending but it declined to say by how much. The lack of a concrete number will disappoint those looking for quick fixes; Chinese benchmark stock indices including the Hang Seng (.HSI), opens new tab opened largely unmoved on Monday. To spur consumption, economists reckon the People’s Republic may need to spend up to 10 trill...
Read More
13Oct mmBy Brian ThompsonNo Comments
Asia, China, Market, World

India starts to reconcile its economic ambitions with security fears about China.

Indian Prime Minister Narendra Modi's government tightened scrutiny of foreign direct investment amid security concerns during the COVID-19 pandemic, largely curtailing China's economic influence. But as India aspires to become the world's third-largest economy by 2029 and a developed nation by 2047, it must grapple with balancing economic ambitions with security concerns and is beginning to cautiously accept Chinese investments in sectors such as electronics manufacturing to boost local production capabilities. Since first assuming office in 2014, Prime Minister Narendra Modi’s government has aimed to increase the share of manufacturing in India’s GDP. In 2014, the government launched the Make-in-India campaign, which pushed for more manufacturing and invited foreign direct ...
Read More
China’s most recent threat, large ships, awakens the US
12Oct mmBy Joe RodriguezNo Comments
China, World

China’s most recent threat, large ships, awakens the US

In a belated recognition that China has cornered the construction of ocean-going commercial vessels, those ships crucial to secure sea-borne supply chains, the United States is this year turning to its Asian allies to help it catch up in a hurry and thwart another geopolitical threat. In June, South Korean shipbuilder Hanwha Ocean bought the loss-making Philly Shipyard in Philadelphia for US$100 million, a deal approved by Washington in September. This may not sound like much, but it allows a foreign shipbuilder into an industry that has been highly protected to its considerable detriment. Under America’s century-old Jones Act, vessels transporting goods between US ports must be built, owned and crewed by Americans. China’s 13 shipyards (and growing) has more capacity...
Read More
Economists urge stronger action from China to combat deflation.
12Oct mmBy Walter ParezNo Comments
China, Market

Economists urge stronger action from China to combat deflation.

China moved to further ramp up support for the economy, promising more aid for the slumping property sector and indebted local governments. But officials still haven’t convinced economists that they’re doing enough to defeat deflation. At a highly anticipated briefing on Saturday, Finance Minister Lan Fo’an refrained from putting a price tag on China’s fiscal stimulus as investors expected, signaling that details would come when China’s legislature meets in the coming weeks. The supportive measures he did announce, however, gave little indication Chinese authorities felt any urgency to ramp up consumption, which many economists see as essential to reflating the economy and putting it on a more positive growth trajectory. “The policy to support consumption sounds quite...
Read More