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☆ China's factory activity extends declines in November
▼ + stars: | 2023-11-30 | by ( ) www.reuters.com time to read: +1 min

Employees work on the production line of glass panels for mobile phones at a factory in Zunyi, Guizhou province, China March 6, 2023. cnsphoto via REUTERS/File Photo Acquire Licensing RightsBEIJING, Nov 30 (Reuters) - China's manufacturing activity contracted for a second straight month in November and at a quicker pace, an official factory survey showed on Thursday, suggesting more policy support measures are needed to help shore up economic growth. The official purchasing managers' index (PMI) fell to 49.4 in November from 49.5 in October, staying below the 50-point level demarcating contraction from expansion. China's economy has struggled this year to mount a strong post-pandemic recovery, held back by a deepening crisis in the property market, local government debt risks, slow global growth and geopolitical tensions. A flurry of policy support measures has had only modest effect, raising pressure on authorities to roll out more stimulus. Reporting by Joe Cash; Editing by Sam HolmesOur Standards: The Thomson Reuters Trust Principles.

Persons: Joe Cash, Sam Holmes Organizations: cnsphoto, REUTERS, Rights, Reuters, Thomson Locations: Zunyi, Guizhou province, China, Rights BEIJING

The official purchasing managers' index (PMI) fell to 49.4 in November from 49.5 in October, staying below the 50-point level demarcating contraction from expansion, data from the National Bureau of Statistics showed on Thursday. The new orders sub index contracted for a second consecutive month, while the new export orders component extended its decline for a ninth month. "Today's PMI reading will further raise expectations towards policy support," said Zhou Hao, economist at Guotai Junan International. "Fiscal policy will be under the spotlight and take centre stage over the coming year and will be closely monitored by the market." Factory PMI has contracted for seven out of the past eight months - rising above the 50-point mark only in September.

Persons: Goldman Sachs, Zhou Hao, Joe Cash, Kim Coghill, Jacqueline Wong Organizations: cnsphoto, REUTERS, National Bureau, Statistics, Standard Chartered, PMI, Guotai, Thomson Locations: Zunyi, Guizhou province, China, BEIJING

☆ China’s growth is buried under great wall of debt
▼ + stars: | 2023-09-13 | by ( Yawen Chen | ) www.reuters.com time to read: +8 min

Most of these 3,000-plus entities were created by local governments during the 2008 crisis to skirt a central government ban on direct state borrowing. These vehicles had already accumulated 80 trillion yuan of liabilities at the end of 2022, according to analysts at Guosheng Securities. At a more optimistic 30% discount, the proceeds would jump to 55 trillion yuan, which would cover all outstanding interest-bearing debt. S&P analysts calculate that about 20 trillion yuan of LGFVs’ loans may be at risk of restructuring. If Xi won't boost property wholeheartedly and is not able to count on consumers, his efforts to revive China’s growth have to focus on smashing the great wall of local debt.

Persons: Wen Jiabao, Xi Jinping, Wen, Xi, Peter Thal Larsen, Sharon Lam, Aditya Sriwatsav Organizations: Reuters, HK, Guosheng Securities, Citi, Finance, Reuters Graphics, Financial Times, Investment, Oxford Economics, Thomson Locations: Beijing, China, Shanghai, New York, China's Southwestern Guizhou, United States

Hong Kong CNN —Luckin Coffee has joined forces with Kweichow Moutai, the maker of China’s fiery national liquor baijiu, for an unusual offering: alcoholic lattes. The popular Chinese coffee chain rolled out the so-called “sauce-flavored latte” with a jolt of liquor for 38 yuan ($5.20) on Monday. The “sauce” in the name is an apparent reference to the slightly savory notes of Moutai’s liquor that has been compared by some drinkers to soy sauce. The new drink quickly became a hot topic on Chinese social media, with many users wondering if it was safe to consume on the go. Luckin Coffee has made a comeback with consumers after becoming mired in a fraud scandal that caused its ejection from Wall Street three years ago.

Persons: Kweichow Moutai, ”, Moutai’s, Gan Organizations: Hong Kong CNN, Weibo, Luckin, Wall Street Locations: Hong Kong, Zunyi, China’s Guizhou, China

☆ Morning Bid: China surprise lifts mood before US payrolls
▼ + stars: | 2023-09-01 | by ( ) www.reuters.com time to read: +3 min

Meanwhile, a pleasant surprise emerged from China, where a private-sector survey showed factory activity in the world's second-largest economy ticked back into expansive territory. It's a little too early to celebrate a major shift in recent trends, though, with the property sector and weak household consumption still weighing heavily. China's stock market shook off its recent gloom in the Asian morning, with the blue-chip index's (.CSI300) real estate (.CSI000) and financial (.CSIFN) sub-indexes leading the charge. The parade of PMI data marches on, with surveys due from a host of countries in the euro bloc on Friday. The euro zone final PMI will be in focus after the survey last month showed manufacturing activity slowing at the fastest pace since the start of the pandemic.

Persons: Brigid Riley It's, nonfarm payrolls, haven't, Mester, Brigid Riley Organizations: cnsphoto, REUTERS, Federal, Reuters Graphics Reuters, PMI, European Central Bank, Thomson Locations: Zunyi, Guizhou province, China, U.S, It's, Europe, Spain, Switzerland, Italy, France, Germany, Sweden

☆ China's cities are struggling to pay their bills from three years of Covid and a real estate crash
▼ + stars: | 2023-01-31 | by ( Laura He | ) edition.cnn.com time to read: +9 min

Rolling lockdowns seriously dented household incomes, leading many to reduce spending, which in turn resulted in less tax revenue for local governments. “China’s runaway local debt poses a serious threat to the country’s overall economic health and will weigh heavily on China’s still-nascent recovery,” said Singleton. Debt that is backed by local governments but which doesn’t show up on their balance sheets could be much bigger. That’s more than 20% higher than the estimate of 53 trillion yuan made by Goldman Sachs in 2021. Their debt squeeze could pose a serious threat to China’s financial system, particularly to small regional banks.

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