China

An economist claims that China’s economy is undergoing a “slow, painful, grinding adjustment.”
17Sep By TheGreenZoneNo Comments
Asia, China, Market

An economist claims that China’s economy is undergoing a “slow, painful, grinding adjustment.”

SINGAPORE — Following a slew of data released over the weekend from China that painted a fairly bleak outlook for its economy, analysts have tapered their expectations for the country’s full year GDP growth. “There hasn’t been much good news in this latest round of data, and this has been the pattern for the last few months,” said Eswar Prasad, professor of international trade and economics at Cornell University, on CNBC’s “Street Signs Asia” on Monday. “Both the long term issues related to property prices and so on, and the short term issues related to domestic demand in particular, especially private investment and household consumption have not been doing well at all,” Prasad said. He warned that Beijing’s economic outlook for the second half of the year is now “flas...
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Expert: China has the funds to handle the real estate crisis without affecting the rest of the world.
12Sep By TheGreenZoneNo Comments
Asia, China, Market, World

Expert: China has the funds to handle the real estate crisis without affecting the rest of the world.

China’s property market remains the biggest downside risk to its economic growth target this year, with policymakers seemingly not in a hurry to make significant changes because its impact is mostly confined to the world’s second-largest economy, according to the chief economist for a global ratings agency. “China has the savings to deal with this. It’s not really spilling over too much to the rest of the world,” said Paul Gruenwald, global chief economist at S&P Global Ratings. “So they’re not going to be forced into dealing with the property excesses by any external or market pressure. They can do it at their own time, but we are not at the bottom yet.” In May, China unveiled wide-ranging measures to stabilise its property sector, which has been in contraction sin...
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China’s Housing Rescue Math Is Unworkable, Extending the Crisis
12Sep By TheGreenZoneNo Comments
China

China’s Housing Rescue Math Is Unworkable, Extending the Crisis

(Bloomberg) -- In May, China’s central government urged more than 200 cities to buy unsold homes to ease oversupply. More than three months later, only 29 have heeded the call. The glacial pace of implementation — driven in large part by the unattractive economics of the plan for local governments — underscores the challenge President Xi Jinping faces as he tries to arrest a record property slump that’s threatening to undermine the country’s growth targets. The plan has been a key part of the government’s attempt to shore up the real estate sector, while achieving Xi’s goal of creating more affordable housing. The disappointing progress raises the pressure for more forceful measures as China tries to deal with 382 million square meters of excess inventory, equivalent to the size of ...
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Chip shortage hits Huawei’s Mate70 manufacturing
11Sep By Michael SmithNo Comments
China, Market

Chip shortage hits Huawei’s Mate70 manufacturing

Huawei Technologies, based in Shenzhen, is facing challenges in securing enough high-end chips for its upcoming Mate70 smartphone. This struggle is a direct result of the ongoing the trade war against China which includes thechip war also. Both Huawei and its partner, Semiconductor Manufacturing International Corp (SMIC), are under US sanctions. They aimed to produce 2.5 million chips for the Mate70's September launch but fell short due to limited manufacturing capacity and productivity issues. According to The Information, the primary reason for this shortfall is the persistent impact of a four-year-old US ban on supplying chip manufacturing tools to Huawei and SMIC.  Initially, it was expected that Huawei would launch the Mate70 in China on September 10, a day after Apple's ...
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7Sep By TheGreenZoneNo Comments
Asia, China, Market

Xi is immobilized due to China’s economic chaos. The entire world will compensate.

Just about everyone has a view on China’s economic troubles. Its deepening property crisis, deflationary currents, and increasing protests are all Asia observers can talk about. Yet one very important voice is barely saying a word about the state of Asia’s biggest economy: President Xi Jinping. This is true both rhetorically and by way of policy actions. The deafening silence on the latter front is especially perplexing as virtually every Chinese growth engine—from investment to exports to household spending—sputters. Less quiet are commodity traders bidding down prices of oil, copper, and other commodities as China turns further inward. Hopes for smoke signals from Beijing that fresh stimulus might be coming are being dashed day after day. And keeping global marke...
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PwC, a ‘Big 4’ auditing company, is apparently prepared for a six-month suspension in China.
22Aug By TheGreenZoneNo Comments
China, World

PwC, a ‘Big 4’ auditing company, is apparently prepared for a six-month suspension in China.

Beijing is reportedly considering a huge fine on PwC in addition to the business ban. The fine could go as high as 1 billion yuan ($140 million), Bloomberg reported in May, which would be the largest fine imposed on an auditing firm in China.  Regulators are scrutinizing PwC for its role in auditing China Evergrande Group, the embattled property developer that has become the poster child of China’s property crisis. In March, authorities accused Evergrande of inflating its revenue by almost $80 billion in 2019 and 2020.  Evergrande defaulted on its debts in 2021, helping to trigger China’s still-ongoing real estate crisis, which is continuing to drag down the economy. A Hong Kong court ordered Evergrande’s liquidation earlier this yea...
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US and China form crisis committee to strengthen financial resiliency.
21Aug By TheGreenZoneNo Comments
China, World

US and China form crisis committee to strengthen financial resiliency.

The U.S. Treasury Department and People’s Bank of China (PBOC) have unveiled plans to form a special contact group to manage potential financial stress events. This resolution follows the fifth round of talks in the Financial Working Group, aiming to encourage mutual financial resilience amid increasing interdependence of the two economies. The new contact group’s mission is to handle potential fiscal crises, playing an integral role in decreasing global financial instability. This plan heralds a significant move in U.S.-China economic cooperation. Following U.S. Treasury Secretary Janet Yellen’s visit to China, the two nations compiled a catalog of critical contacts focused on preserving financial stability. This effort aims to enhance coordination in financial crises times and bet...
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Plummeting iron ore prices on the basis of China’s property crisis might wipe out $3 billion from the government budget.
19Aug By TheGreenZoneNo 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...
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Chinese steel giant warns of “long, cold winter”
16Aug By TheGreenZoneNo 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...
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Deep in economic woes, China faces rise in blue-collar workers-led unrest
16Aug By 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...
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