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☆ China's politburo meeting leaves many economic headaches unaddressed
▼ + stars: | 2023-07-26 | by ( ) www.reuters.com time to read: +5 min

Encouraging higher wages requires unleashing the private sector from tight Communist Party controls, as well as boosting workers' bargaining power. Another headache for the Communist Party is youth unemployment surpassing 20%. The onus is on the private sector to provide those jobs, but many businesses lack confidence after years of crackdowns on the tech, financial and other industries. Chinese courts answer to the Communist Party. More profound structural reforms will have to wait until a key Party conference in December.

Persons: weren't, Marius Zaharia, Lincoln Organizations: Communist Party, Thomson Locations: HONG KONG, CHINA, China, United States, Japan, Beijing, crackdowns

[1/5] A worker sweeps a street in the Central Business District on a rainy day in Beijing, China, July 12, 2023. REUTERS/Thomas PeterBEIJING, July 18 (Reuters) - China is entering an era of much slower economic growth, raising a daunting prospect: it may never get rich. He expects growth to slow to 3%, which "will feel like an economic recession" when youth unemployment is already above 20%. The April-June data puts 2023 growth on track for roughly 5%, with slower rates thereafter. But China's annual growth averaged around 7% last decade, and more than 10% in the 2000s.

Persons: Thomas Peter BEIJING, Desmond Lachman, year's, Wang Jun, Zheng Shanjie, Zheng, Richard Koo, Juan Orts, Xi Jinping's, Zhao, Cai Fang, Zhu Ning, Koo, Liangping Gao, Ellen Zhang, Ziyi Tang, Kevin Yao, Joe Cash, Marius Zaharia, David Crawshaw Organizations: Central Business District, REUTERS, American Enterprise Institute, Reuters, Communist, Huatai Asset Management, Reform Commission, Overseas, Nomura Research Institute, Fathom Consulting, Shanghai Advanced Institute of Finance, Thomson Locations: Beijing, China, Japan, United States, Young, Africa, Latin, U.S, Central

☆ China's choice of PBOC party chief signals financial stability worries
▼ + stars: | 2023-07-04 | by ( Kevin Yao | ) www.reuters.com time to read: +5 min

The central bank did not immediately respond to Reuters' request for comment. Pan, central bank deputy governor since 2012 who turns 60 this month, is not expected to deviate from China's measured pace of policy easing to support the recovery, analysts said. "His professional ability will help safeguard the bottom line of systemic financial risks, especially as the property sector is slowing, and fend off a big systemic crisis." In an unexpected move, the ruling Communist Party appointed Pan as the central bank's party secretary on Saturday, taking over from Guo Shuqing. China has taken a series of steps this year to tighten party control over the country's vast, but largely closed, financial system, including plans to set up the Central Financial Commission to oversee the PBOC and other financial regulators.

Persons: Gongsheng, Jason Lee, Pan, Yi Gang, Gu Tianyong, Guo Shuqing, Yi, Yi's, Zhou Xiaochuan, Zhou, Xu Hongcai, Marius Zaharia, Jacqueline Wong Organizations: People's Bank of China, National People's Congress, REUTERS, outflows, Reuters, cryptocurrencies, prudential, Central University of Finance, Economics, Communist Party, Pan, Street, Cambridge University, Harvard University, Central Financial Commission, China Association of Policy, Thomson Locations: Beijing, China, BEIJING

☆ Their parents made China the world's factory. Can the kids save the family business?
▼ + stars: | 2023-06-19 | by ( David Kirton | ) www.reuters.com time to read: +9 min

Du, like tens of thousands of other young Chinese factory bosses, is inheriting a basic manufacturing business that can no longer rely on the labour-intensive model that made China the world's largest exporter of goods. Those skills would come in handy in a factory the Chinese state set up in 1951 and privatised in 2002. Like five of the other chang er dai who spoke to Reuters, Zhang never planned to take over the factory. Chang er dai, however, help lift the bottom, which is also important for preserving China's share of world manufacturing, two industry experts told Reuters. Not all chang er dai will get there.

Persons: Steven Du, Du, Zhang Zhipeng, Mao Zedong's, Du said, Zhang, Zhang Zeqing, Chang, Zhou Yuxiang, Tian Weihua, Tian, Zhang Ying, David Kirton, Marius Zaharia, David Crawshaw Organizations: Shenzhen Research Institute of High, Reuters, Apple, Agricultural Products, Lake Technologies, Science, Technology Innovation Research Institute, University of Arts, Workers, Thomson Locations: RUICHANG, China, Shanghai, Southeast Asia, India, New Zealand, United States, TW, Wisconsin, Ruichang, France, London, Ningbo

New rules imposed in February force infant formula makers to invest heavily to re-make, test, certify and re-register their products for China, before potentially conducting new marketing campaigns. “The new standard requires higher product quality as well as stronger manufacturing techniques which are expected to eliminate many small-to-medium-size players,” said Quinn Mai, analyst at Euromonitor International, which estimates China’s infant formula market will fall 12.5% to $21 billion by 2025 due to shrinking demand. China's National Health Commission (NHC) cited infant safety when announcing the latest rules. Celia Ning, director at the nutrition research institute of formula maker Junlebao, said the registration process could "easily" take a year. Another, Fonterra (FCG.NZ), said it was progressing through the re-registration process but that infant formula made up a relatively small part of its China business, with declining birth rates and regulation driving industry consolidation.

Persons: ”, Quinn Mai, Jane Li, Li, Celia Ning, Junlebao, Ning, SAMR, Nestle, Marius Zaharia Organizations: Euromonitor, Health Commission, NHC, State Administration, Market, “, Unicef, Companies, Abbott Laboratories, Reuters, New Zealand's Ministry, Primary Industries, Milk, Global, Nestle, Danone, HK, “ Companies, Thomson Locations: HONG KONG, China, Auckland, “ Beijing, India, U.S, Hong Kong, Beijing, Lincoln

☆ Cheap 'like cabbage' apartments in some Chinese cities draw buyers, and caution
▼ + stars: | 2023-06-16 | by ( Liangping Gao | Marius Zaharia | ) www.reuters.com time to read: +4 min

Real estate agents said low-cost apartments in smaller Chinese cities such as Huainan and Rushan in the east, and Gejiu in the southwest, are also being bought, largely by people living outside those locations. The deals come at a time the picture for China’s property market is getting darker. For buyers with the means to get back into the market, the rock-bottom prices of second-hand apartments in the smaller cities have been hard to resist. ‘BUYERS ARE NOT LOCALS’Real estate agents said buyers in the small cities are mostly from out of town. “The fact that there are so many people buying low-cost flats in smaller cities reflects caution,” said Hwabao Trust economist Nie Wen.

Persons: Hu Yongwei, Thomas Peter, Hu, “, Zhao, Liu Yong, Gejiu, ”, Nie Wen Organizations: Reuters, REUTERS, Beijing, Hwabao Locations: BEIJING, HONG KONG, Beijing, Hebi, Zhengzhou, Henan province, China, Huainan, Rushan, Anjuke, Chongqing, COVID

[1/5] People wait for bus near a billboard of JD.com advertisement for the "618" shopping festival, in Beijing, China June 12, 2023. Retail sales growth in May slowed from the previous month, missing forecasts. In 2022 China's online retail sales amounted to 13.8 trillion yuan ($1.93 trillion), according to Ministry of Commerce data. "Everyone's making excuses but at the end of the day, it's a super-soft retail market." Last year, JD.com posted 10% annual growth in total 618 sales, its slowest ever.

Persons: Tingshu Wang, Josh Gardner, JD.com, Trudy Dai, Jason Yu, Kantar, Yu, Iris Zhang, Gardner, Data, Casey Hall, Sophie Yu, Marius Zaharia Organizations: REUTERS, HK, of Commerce, Kungfu, Burberry, Apple, Alibaba, Jefferies, Citi, Thomson Locations: Beijing, China, SHANGHAI, Tmall

Exports and factory output in the world's second-largest economy tumbled in May, as looming downturns force the United States and Europe to pare back orders for goods made in China. Some factories closed or are struggling to pay wages or severance for laid-off workers as a result, according to Chinese labour researchers. "We believe that the drop in manufacturing orders and that factory closures will continue," said Aidan Chau, researcher at Hong Kong-based rights group China Labour Bulletin (CLB). Labour unions were central to the Communist Party's proletariat beginnings but play only a marginal role in modern authoritarian China. However, some analysts say factory strikes could become a political headache for the Party.

Persons: pare, Aidan Chau, CLB, Dian, Xin Dian, Zhong Min, Xu Tianchen, Xu, Laurie Chen, Nicoco Chan, Marius Zaharia, Sam Holmes Organizations: China Labour Bulletin, Min, Goods Shenzhen Ltd . Co, Dian Cable Ltd . Co, Reuters, China's Ministry of Public Security, Ministry of Human Resources, Shenzhen, China Federation of Trade Unions, Manufacturers, Workers, Security, Labour, Party, Economist Intelligence Unit, Thomson Locations: BEIJING, United States, Europe, China, Hong Kong, Guangdong province, Shenzhen, Communist, Beijing, Shanghai

☆ One of two giant rubber ducks in Hong Kong harbour deflates
▼ + stars: | 2023-06-10 | by ( ) www.reuters.com time to read: +1 min

[1/3] One of the inflatable yellow ducks created by Dutch artist Florentijn Hofman is seen deflated at Victoria Harbour in Hong Kong, China June 10, 2023. REUTERS/Tyrone SiuHONG KONG, June 10 (Reuters) - One of two giant rubber ducks anchored in Hong Kong's Victoria Harbour as part of an art installation by Dutch artist Florentijn Hofman deflated on Saturday, to the disappointment of residents coming to see them in scorching heat. I originally thought I could see two rubber ducks,” said Moon Lam, 72, who came to the harbour wearing rubber duck-themed t-shirt, face mask, earrings and socks. A single rubber duck first floated in Hong Kong in 2013. Maybe because it’s too hot in Hong Kong,” said Tiffany Chen, 28, a tourist from the northern neighbouring city of Shenzhen.

Persons: Florentijn Hofman, Tyrone Siu, “, ”, Moon Lam, Hofman, it’s, Tiffany Chen, Jessie Pang, Marius Zaharia Organizations: Harbour, REUTERS, Thomson Locations: Hong Kong, China, Tyrone Siu HONG KONG, Hong, Victoria Harbour, Netherlands, France, Brazil, Shenzhen

Economists expect such examples to become increasingly common in coming years, as a glut of university graduates and a shortage of factory labour due to an ageing workforce deepen China's job market imbalances. The industries most popular among fresh Chinese graduates, such as tech, education, real estate and finance, have all faced regulatory crackdowns in recent years. Reuters Graphics'ROLL UP YOUR SLEEVES'It is unclear exactly how many graduates are taking jobs below their skill level, but state media has acknowledged the trend. President Xi Jinping repeatedly exhorted young people to "seek hardships" in a recent state media article emphasising his suffering during the Cultural Revolution. China's education and human resources ministries did not immediately respond to requests for comment.

Persons: Thomas Peter, Liang Huaxiao, Liang, Keyu Jin, Xi Jinping, today's, Chim Lee, Jobs, Han Zhaoxue, master's, Wang, Laurie Chen, Marius Zaharia Organizations: REUTERS, Economist Intelligence Unit, Thomson Locations: Beijing, China, BEIJING, Taiyuan, Shanghai, Jining

☆ China's domestic travel recovery marred by anti-spending 'special forces'
▼ + stars: | 2023-05-17 | by ( Casey Hall | Thomson Reuters | Casey Has Reported On China'S Consumer Culture Her Base In Shanghai For More Than A Decade | ) www.reuters.com time to read: +4 min

[1/2] Passengers wait to board trains at Shanghai Hongqiao railway station ahead of the five-day Labour Day holiday, in Shanghai, China, April 28, 2023. To get to the ancient temples, pagodas and grottoes she wanted to visit, she walked roughly 30,000 steps a day. "I can control the expenses, to go to many places for the least amount of money, but it is really tiring." "Maybe I didn't wear the right shoes, but my feet started to hurt after walking more than 10,000 steps," she said, joking that she exemplified "the battle-scarred version of special forces travel." ($1 = 6.9121 Chinese yuan renminbi)Reporting by Casey Hall and Shanghai newsroom; Editing by Marius Zaharia and Lincoln Feast.

☆ Chinese baby product firms seek to age up, sell more abroad as population falls
▼ + stars: | 2023-05-10 | by ( Farah Master | Thomson Reuters | Farah Master Is A Senior Correspondent At Reuters Where She Focuses On Health | ) www.reuters.com time to read: +5 min

HONG KONG, May 11 (Reuters) - For many of China's manufacturers of baby and children's products, painful reverberations from last year's historic decline in the country's population are already upon them. Hong Kong-listed Health and Happiness (H&H) (1112.HK), which gains nearly half of its revenue from baby products such as infant formula, food and diapers, is one such company. China's market for baby food and diapers is the world's largest at $37.9 billion, accounting for around a third of global sales annually, according to research from Euromonitor. Adult diaper revenue, however, shot up 13% - highlighting how China's rapidly ageing population is prompting shifts in consumer spending. Reuters GraphicsShares for the three firms now trade between a third and a fifth of their all-time highs.

The fifth of young Chinese without jobs among a highly-educated generation is a record. The number of master's and Ph.D graduates in Beijing exceeds undergraduates for the first time, education authorities said. "However, young people who really pin their hopes on the gods and Buddhas when under pressure are also clearly going astray." "I don't believe I will ever find my ideal job," said the urban planning graduate, who spoke on condition of anonymity to protect her job prospects. "Why, instead of helping private enterprises develop, do you blame 11.58 million graduates for not taking off their scholar gowns?"

☆ Analysis: China's 'atypical' deflation cycle gives central bank a headache
▼ + stars: | 2023-04-19 | by ( Kevin Yao | ) www.reuters.com time to read: +5 min

China GDP"China is entering an 'atypical' deflation cycle, which means deflation amid economic recovery," said Jinyue Dong, senior economist at BBVA research. China's new bank lending hit an all-time high in the first quarter. The central bank cut lenders' reserve requirements ratio (RRR) for the first time this year in March. But analysts say that is largely due to last year's low base caused by COVID-19 curbs that hit consumers the hardest, rather than underlying household demand. Reuters GraphicsNew household loans, mainly mortgages and consumer loans, accounted for 16% of total new loans in the first quarter, despite a jump in mortgages in March, while corporate loans made up for the rest.

In February, over 150,000 Chinese tourists travelled to Thailand, the latest data from the Thai Ministry of Tourism show - a three year high but still 85% below February 2019 levels. Chinese tourists used to make up 10% of European arrivals from outside the continent. Flights to Europe are up to 80% more expensive than before the pandemic, according to ForwardKeys, a travel data firm. Chinese tourists making a comeback is crucial for regional economies. Reuters GraphicsPre-pandemic, China was Australia's top source of tourists, but numbers following Beijing's reopening of borders have only trickled back.

[1/3] A staff member attends to visitors at an oven retailer at the China Import and Export Fair, also known as Canton Fair, in Guangzhou, Guangdong province, China April 16, 2023. REUTERS/Ellen ZhangGUANGZHOU, April 16 (Reuters) - Chinese exporters exhibiting their products at the country's largest trade fair said the weak global economy was hurting their businesses, with many freezing investments and some cutting labour costs in response. Lin said the company cannot afford to sell at lower prices, but it may look to reduce labour costs. Vicky Chen, foreign trade manager at socket producer Qinjia Electric, said she did not expect a big sales boost at the fair, which runs until May 5. "The whole global economy is fairing poorly at the moment, and the fair won't change that."

"I was previously considered wealthy in the area," said Liu, who also owns some commercial property in the northeastern city of Liaoyuan. In play now in China, where around 70% of household wealth is in property, this phenomenon is weighing on the post-pandemic recovery of household consumption, which Chinese policymakers have vowed to make a more prominent driver of economic growth. Capital Economics estimates net household wealth declined 4.3% overall last year, due to falling house and stock prices, the first decline since at least 2001. Indeed, deposits rose a further 9.9 trillion yuan in the first quarter of this year. ($1 = 6.8376 Chinese yuan renminbi)Additional reporting by Shuyan Wang; Editing by Marius Zaharia and Kim CoghillOur Standards: The Thomson Reuters Trust Principles.

☆ Chinese officials step up foreign travel in race to find investors
▼ + stars: | 2023-04-06 | by ( Clare Jim | ) www.reuters.com time to read: +5 min

Their urgency highlights the pressure local governments face in boosting growth while burdened with cumulative debt of $9 trillion, said the sources who met Chinese officials in Hong Kong. The other executive and Yim said they had often attended as many as eight to 10 events a day with Chinese officials. Fengze, a district in the nearby city of Quanzhou, signed up procurement deals of up to 30 billion yuan from Hong Kong, the city's social media accounts showed. Shenzhen’s Boao district alone aims to attract 100 billion yuan in foreign investment this year, with 26 business managers and 10 officials responsible for key streets committing themselves to the task in a letter, Chinese media said. ($1=6.8810 Chinese yuan renminbi)Reporting by Clare Jim; Editing by Marius Zaharia and Clarence FernandezOur Standards: The Thomson Reuters Trust Principles.

In poorer areas, which are bleeding people and private business to urban centres, the task of providing jobs falls more squarely on local governments at a time they are struggling to raise revenue through income tax and state land sales. However, "budgetary and debt pressures are more acute for these provinces, so increasing expenditure comes with additional fiscal risks," Yuan noted. The local governments adding the most jobs in relative terms are also among the most indebted. The local governments of Gansu, Yunnan and Guangxi did not respond to a request for comment and Reuters could not establish exactly why the governments are ramping up hiring and how it will impact their finances. Moody's Yuan said local governments including Gansu have faced increased refinancing pressure to meet their debt obligations.

☆ Time and money for love: China brainstorms ways to boost birth rate
▼ + stars: | 2023-03-15 | by ( Farah Master | ) www.reuters.com time to read: +3 min

China dug itself into a demographic hole largely through its one-child policy imposed between 1980 and 2015. Young people cite high childcare and education costs, low incomes, a feeble social safety net and gender inequalities, as discouraging factors. "But without any fertility encouragement policy then fertility will decline even further." China's birth rate last year fell to 6.77 births per 1,000 people, from 7.52 births in 2021, the lowest on record. Demographer Yi Fuxian remains sceptical whether any measures would have a significant impact by themselves, saying China needed a "paradigm revolution of its entire economy, society, politics and diplomacy to boost fertility."

Starbucks (SBUX.O) warned of a "cautious" recovery in its China sales. "Consumers have become more meticulous in their spending," its chief executive, Xu Lei, said in an earnings call on Thursday. "Now the Chinese tourists are either super rich or very poor," said the owner, who spoke on condition of anonymity. "This suggests that once the initial reopening rebound has happened, we shouldn't expect a further surge in consumer spending," he wrote in a note to clients. ($1 = 6.8780 Chinese yuan renminbi)Editing by Marius Zaharia and Bradley PerrettOur Standards: The Thomson Reuters Trust Principles.

☆ 'Steady hand': China surprisingly retains central bank chief
▼ + stars: | 2023-03-12 | by ( Kevin Yao | ) www.reuters.com time to read: +4 min

BEIJING, March 12 (Reuters) - Yi Gang's surprise re-appointment as China's central bank governor on Sunday means a pro-market mind of high international stature will continue to represent the world's second-largest economy on the global stage. The PBOC governor has high global exposure through institutions such as the Group of 20, the International Monetary Fund, the World Bank and others. "The central bank governor is not a job that can be easily taken over by someone else. Under Yi, the central bank has cut the reserve ratio 14 times since early 2018, pumping more than 10 trillion yuan into the economy. "Yi has been a steady hand in managing policy and the appointment underlines the importance of policy stability," said a policy insider who spoke on condition anonymity.

[1/5] Elderly visitors enjoy the sunshine, at a nursing home of Lendlease's Ardor Gardens in Shanghai, China February 27, 2023. Lim says "stigma" around retirement homes in China is quickly disappearing. About 4% of people aged 65 and over in Britain live in retirement homes, according to information service Lottie. Ding Hui, China managing director at Australian real estate firm Lendlease (LLC.AX), expects demand for retirement homes to rise sharply in the next five to 10 years. Government-run nursing homes with basic facilities in Shanghai and Beijing are much cheaper, at about 2,000 yuan ($290) a month.

☆ Exclusive: China increasingly ambitious with 2023 growth target, may aim for up to 6%
▼ + stars: | 2023-03-02 | by ( Kevin Yao | ) www.reuters.com time to read: +5 min

Four of the sources said China was likely to aim for growth up to 6%, while three others said China was targeting 5%-5.5%. "This year's growth target could be 5-6%," said one of the people involved in the discussions. "We need to achieve an economic recovery, boost employment, and confidence, these are the key factors we need to consider." It was also the biggest ever miss of a growth target. Yu said a growth target of above 6% would help "boost morale and stimulate China's economic growth potential."

[1/7] Farmer Wang Zhanling sits next to his wife in their house in Quansheng village, Heilongjiang Province, China, February 8, 2023. The state-run Chinese Academy of Sciences sees the pension system running out of money by 2035. "If the pension system does not change, this is unsustainable," said Xiujian Peng, senior research fellow in the Centre of Policy Studies at Victoria University in Australia. The province has the lowest birth rate in China, with just over 100,000 births in 2021 and 460,000 deaths. Many experts, including Macquarie's chief China economist Larry Hu, suggest implementing a unified national pension system, backstopped by the more resourceful central government rather than cash-strapped local administrations.

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