China

China may have increased its defence outlay and set up an ambitious growth rate of 5% for 2023, but perhaps for the first time, the communist leadership may not have been able to restrain itself from highlighting the myriad economic challenges the country faces. The rare outpouring of woe in the country came on March 3, at the first session of the 5th National People's Congress that opened at the Great Hall of the People in Beijing. Party and state leaders Xi Jinping, Li Keqiang, Li Zhanshu, Wang Yang, Li Qiang, Wang Huning, Han Zheng, Cai Qi, Ding Xuexiang, Li Xi, Wang Qishan and others attended the meeting. Premier Li Keqiang delivered a government work report to the conference on behalf of the State Council. Significantly, the meeting admitted that China, despite its image as an ...

BOC Research Institute released the 2023 Economic and Financial Outlook (the “Report”) in Beijing on November 30, 2022. The Report reviews the global and China’s economic and financial performance as well as the global banking performance in 2022. It also provides an outlook on the economic and financial situations and the global banking trends in 2023. In terms of the global economic and financial situations, the Report notes that the world economy faced a mounting risk of “stagflation” through 2022 due to the Russia-Ukraine conflicts, energy shortage and monetary tightening of developed economies. The US Dollar Index and US Treasury yields soared with the reshoring of capital to the United States, continuous tightening of offshore dollar liquidity and volatile financial markets. Look...

According to China’s National Bureau of Statistics (NBS), the annual GDP growth of the country fell to 3 per cent much below the 5.5 per cent official target in 2022. This was also slightly lower than forecasts published by the IMF in October 2022. IMF predictions expected a GDP growth rate of around 4.4 percent.  This marked a dramatic slowdown from 8.4 per cent in 2021. The NBS said, "despite the overall stable economic performance", the foundation for economic recovery remains "unstable". The annual GDP of the country stood at 121.02 trillion Yuan ( $17.94 trillion) in 2022. It declined from $18 trillion in 2021 mainly due to a sharp rise of the dollar against RMB.  This is the slowest growth of the Chinese economy since the 2.3 per cent registered in GDP in 1974. The effe...

While addressing the severe Covid outbreak and attempting to prevent an economic catastrophe brought on by the strict lockdowns that were only recently lifted in response to public pressure, the government is still facing a serious crisis involving thousands of unfinished apartments throughout China.  The country's real estate loan market is seeing an increase in bad loans. They currently account for 29% of all loans this year. People are just refusing to pay off their mortgages, and existing housing market price losses are now the sharpest in almost a decade. Since the majority of Chinese spend all of their resources on housing, the problem may soon jeopardise people's ability to support themselves. The government is desperately trying to ease the panic. The China Banking and ...

In two back-to-back reports in September and December 2022, the World Bank has projected a grim picture of the Chinese economy in 2022 and 2023. The second largest economy of the world is now falling back in the race, not only with the USA, the global leaders, but also its closest neighbour India with which China is vying to gain supremacy in Asia. The two World Bank reports said the growth rate of the Gross Domestic Product of China is expected to slow sharply to 2.7 percent in 2022, much below the 8.1 percent rate achieved in 2021. It could recover to 4.3 percent in 2023. The latest growth forecast for Indi in 2022-23 is seven percent. An AP report from Beijing on October 31, 2022, quoting an official survey in China, says the manufacturing sector in China has weakened, adding to ...

According to China Beige Book International, deflationary pressure in China exacerbated in the fourth quarter as the economy contracted, and price rise is likely to be muted even when the economy recovers later this year.  According to a report released by CBBI on Tuesday, businesses saw their wages and input costs grow at the slowest rate since mid-2020 in the final three months of 2022. According to the report, growth in sale prices has dropped to its lowest point since late 2020.  The study's foundation is a survey of 4,354 enterprises that was carried out by CBBI, a source of impartial economic data, during the relevant time. Sales price increase has slowed to a crawl, indicating that short-term disinflation is already underway, it claimed. The Covid hit to retail m...

Chinese growth story is facing a serious headwind China’s exports fell by 0.3% in October 2022 from a year ago in dollar terms, missing analysts’ expectations for a decent increase. There has been a drop in the value of goods sold to the U.S. and EU. China’s exports to its largest trading partner, the U.S, fell by 12.6% in October, a third-straight month of decline. Exports to the EU were down by 9%. High inflationary pressure forced the US and Europe to squeeze the money supply in their respective economies. The U.S. Federal Reserve is resorting to aggressive interest rate hikes ignoring the risks of triggering recessionary trends. As the demand slows down in the West, the pressure is felt in China. In a recent forecast, Barclays predicted that China’s exports will drop by 2% to...