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BEIJING, June 9 (Reuters) - China's factory gate prices fell at the fastest pace in seven years in May and quicker than forecasts, as faltering demand weighed on a slowing manufacturing sector and cast a cloud over the fragile economic recovery. "The risk of deflation is still weighing on the economy," said Zhiwei Zhang, chief economist at Pinpoint Asset Management, in a note. China's economy grew faster than expected in the first quarter, but recent indicators show demand is rapidly weakening with exports, imports and factory activity falling in May. Food price inflation, a key driver of CPI, slowed to 1.0% year-on-year from 2.4% in the previous month. On a month-on-month basis, food prices fell 0.7%.

Persons: Zhiwei Zhang, Julian Evans, Pritchard, Dan Wang, Joe Cash, Sam Holmes Organizations: National Bureau of Statistics, Australia, Reuters, Capital Economics, Hang Seng Bank China, Bank of China, China's, Thomson Locations: BEIJING, United States, Europe, China

☆ China's producer prices plunge the most in seven years as deflation hangs over economy
▼ + stars: | 2023-06-09 | by ( Jihye Lee | ) www.cnbc.com time to read: +2 min

People walk past buildings in Shanghai, Shanghai, China, on Friday, April 21, 2023. Producer price index in May fell 4.6%, marking the steepest year-on-year drop in seven years, when producer prices saw a year-on-year drop of 7.2% in May 2016. China's low consumer inflation and deflation in its producer prices come in contrast to relatively high inflation in major economies around the world. The mining and raw material industries led declines in producer prices, while food, tobacco and alcohol prices led consumer price gains, the data showed. Nearing bottomDespite the softness in the latest price indexes, one China market watcher seemed to be holding on to an optimistic "long China" call.

Persons: Zhiwei Zhang, Zhang, Andrew Maynard of Organizations: Bloomberg, Getty, Reuters, CPI, U.S . Federal Reserve, U.S ., CSI, China's National Bureau, Statistics Locations: Shanghai, China, Canada, Australia, Shenzhen, Andrew Maynard of China

☆ China's big banks cut deposit rates, signaling monetary easing ahead
▼ + stars: | 2023-06-08 | by ( Evelyn Cheng | ) www.cnbc.com time to read: +2 min

Bloomberg | Bloomberg | Getty ImagesBEIJING — China's largest banks cut interest rates for savers on Thursday in a bid to boost growth in an economy where consumption has been slow to recover. The country's six state-owned commercial banks' websites all showed updated yuan-denominated demand deposit interest rates of 0.2%, down from 0.25% last year, according to CNBC checks. The banks cut rates for other deposit products, including reducing the interest rate for five-year time deposits to 2.5% from 2.65%, according to their websites. The state-run Securities Times reported the deposit rate cuts in the Thursday edition of the newspaper. However, it's not a given that lower deposit rates will translate immediately into greater spending.

Persons: Nomura, Ting Lu, Zhang, it's Organizations: of, Bloomberg, Getty, BEIJING, CNBC, Securities Times, People's Bank of China, China, Management Locations: of China, China, Shanghai

☆ China's exports tumble much more than expected in May
▼ + stars: | 2023-06-07 | by ( ) edition.cnn.com time to read: +2 min

Beijing Reuters —China’s exports shrank much faster than expected in May and imports fell, albeit at a slower pace, as manufacturers struggled to find demand abroad and domestic consumption remained sluggish. Exports from the world’s second-largest economy fell 7.5% year-on-year in May, the biggest decline since January and swinging from 8.5% growth in April. Chinese stocks trimmed gains and the Australian dollar, a commodity currency that is highly sensitive to swings in Chinese demand, fell after the trade data. “The weak exports confirm that China needs to rely on domestic demand as global economy slows,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management. The PMI subindexes showed factory output swung to contraction from expansion while new orders, including new exports, fell for a second month.

Persons: ”, Zhiwei Zhang Organizations: Beijing Reuters —, Imports, Reuters, Australian, PMI Locations: Beijing, China

Imports contracted at a slower pace, dropping 4.5%, a slower pace of decline 7.9% than the previous month. The Australian dollar , a commodity currency that is highly sensitive to swings in Chinese demand, fell after the trade data. "The weak exports confirm that China needs to rely on domestic demand as global economy slows," said Zhiwei Zhang, chief economist at Pinpoint Asset Management. "There is more pressure for the government to boost domestic consumption in the rest of the year, as global demand will likely weaken further in the second half." The PMI subindexes showed factory output swung to contraction from expansion while new orders, including new exports, fell for a second month.

Persons: Zhiwei Zhang, Joe Cash, Sam Holmes Organizations: Imports, Reuters, PMI, Thomson Locations: BEIJING, China

Summary Manufacturing PMI unexpectedly fallsNon-manufacturing PMI falls, as services slowPMIs show economic recovery losing steamMarkets skid on PMI weaknessBEIJING, May 31 (Reuters) - China's factory activity shrank faster than expected in May on weakening demand, heaping pressure on policymakers to shore up a patchy economic recovery and knocking Asian financial markets lower. "The PMI data reveal that China may heading to a K-shaped recovery," said Bruce Pang, chief economist at Jones Lang LaSalle. "The sluggish domestic demand could weigh on China's sustainable growth, if there are no efficient and effective policy moves to engineer a broad-based recovery," said Pang. The PMI subindexes for May showed factory output swung to contraction from an expansion while new orders, including new exports, fell for the second month. Last month, imports contracted sharply, factory gate prices fell, property investment slumped, industrial profits plunged and factory output and retail sales both missed forecasts.

Persons: Bruce Pang, Jones Lang LaSalle, Pang, Jones Lang LaSalle's Pang, Li Qiang, Zhiwei Zhang, Liangping Gao, Ryan Woo, Sam Holmes Organizations: PMI, National Bureau of Statistics, . Service, New, Jones, Labor, Nomura, Barclays, Thomson Locations: BEIJING, Asia, New Zealand, China, Japan

It was well below expectations for a 10.9% increase in a Reuters poll of analysts although it marked the quickest growth rate since September 2022. Retail sales jumped 18.4%, speeding up sharply from a 10.6% increase in March for their fastest increase since March 2021. The growth target for this year is set at a low level, which leaves room for the government to wait and see." China has set a modest growth target of about 5% in 2023, after badly missing last year's goal. ($1 = 6.9121 Chinese yuan renminbi)Reporting by Ellen Zhang, Joe Cash, Albee Zhang and Kevin Yao Editing by Shri NavaratnamOur Standards: The Thomson Reuters Trust Principles.

BEIJING, May 9 (Reuters) - China's imports contracted sharply in April, while exports grew at a slower pace, reinforcing signs of feeble domestic demand despite the lifting of COVID curbs and heaping pressure on an economy already struggling in the face of cooling global growth. Economists in a Reuters poll had predicted no growth in imports and an 8.0% increase in exports. Analysts say cooling global growth pointed to a longer road to recovery for the Asian giant after Beijing abruptly ended tough COVID curbs in December. South Korean exports to China, a leading indicator of China's imports, were down 26.5% in April, continuing 10 consecutive months of decline. China's economy grew faster than expected in the first quarter thanks to robust services consumption, but factory output has lagged amid weak global growth.

☆ China factory activity unexpectedly cools in April
▼ + stars: | 2023-04-30 | by ( Ellen Zhang | Ryan Woo | ) www.reuters.com time to read: +3 min

BEIJING (Reuters) -China’s manufacturing activity unexpectedly shrank in April, official data showed on Sunday, raising pressure on policymakers seeking to boost an economy struggling for a post-COVID lift-off amid subdued global demand and persistent property weakness. That missed expectations of 51.4 tipped by economists in a Reuters poll and marked the first contraction since December, when the official manufacturing PMI was at 47.0. The world’s second-biggest economy grew faster than expected in the first quarter thanks to robust services consumption, but factory output has lagged amid weak global growth. The manufacturing sector, which employs about 18% of China’s workforce, remains under pressure due to slack global demand. The composite PMI, which includes manufacturing and non-manufacturing activity, dropped to 54.4 from 57.0.

☆ China factory activity unexpectedly shrinks in April
▼ + stars: | 2023-04-30 | by ( Ellen Zhang | Ryan Woo | ) www.reuters.com time to read: +3 min

☆ China PMI factory activity unexpectedly cools in April
▼ + stars: | 2023-04-30 | by ( ) edition.cnn.com time to read: +3 min

The official manufacturing purchasing managers’ index (PMI) declined to 49.2 last month from 51.9 in March, according to data from the National Bureau of Statistics, below the 50-point mark that separates expansion and contraction in activity. That missed expectations of 51.4 tipped by economists in a Reuters poll and marked the first contraction since December, when the official manufacturing PMI was at 47.0. The world’s second-biggest economy grew faster than expected in the first quarter thanks to robust services consumption, but factory output has lagged amid weak global growth. China's manufacturing activity unexpectedly shrank in April, according to official data. The composite PMI, which includes manufacturing and non-manufacturing activity, dropped to 54.4 from 57.0.

GDP growth last year slumped to one of its worst in nearly half a century due to COVID restrictions. "The strong export growth in March also likely helped to boost GDP growth in Q1." China's rebound has so far remained uneven as its investment-fuelled growth of the past to one now reliant on consumption faces challenges. Consumption, services and infrastructure spending have perked up but factory output has lagged amid weak global growth, while slowing prices and surging bank savings are raising doubts about demand. The government has set a modest GDP growth target of around 5% for this year, after badly missing the 2022 goal.

BEIJING, April 13 (Reuters) - China's exports unexpectedly surged in March, with officials flagging rising demand for electric vehicles, but analysts cautioned the improvement partly reflects suppliers catching up with unfulfilled orders after last year's COVID-19 disruptions. Exports in March shot up 14.8% from a year ago, snapping five straight months of declines and stunning economists who predicted a 7.0% fall in a Reuters poll. "Sluggish external demand and geopolitical factors will bring greater challenges to China's trade development," he added. Factory surveys showed export orders falling in March, a contrast to more upbeat readings for the services sector, which has benefited from China's reopening. Reporting by Joe Cash and Ellen Zhang; Editing by Clarence Fernandez and Sam HolmesOur Standards: The Thomson Reuters Trust Principles.

BEIJING, April 13 (Reuters) - China's exports unexpectedly surged for March, driven by strong shipments of solar products, new-energy vehicles and lithium batteries and as supply chain conditions continued to improve from their COVID paralysis. This came as a surprise to the market," said Zhiwei Zhang, chief economist at Pinpoint Asset Management. Lv Daliang, spokesperson of the General Administration of Customs, attributed the upside surprise to strength in demand for electric vehicles, solar products and lithium batteries. "Sluggish external demand and geopolitical factors will bring greater challenges to China's trade development," he added. Reporting by Joe Cash and Ellen Zhang; Editing by Clarence Fernandez and Sam HolmesOur Standards: The Thomson Reuters Trust Principles.

☆ Smaller Chinese banks cut deposit rates on squeezed margins
▼ + stars: | 2023-04-11 | by ( ) www.reuters.com time to read: +3 min

BEIJING, April 11 (Reuters) - Several small and mid-sized banks in China have lowered their deposit interest rates, a move that could help ease costs as loan growth faces more pressure amid rising economic risks. "But the costs of liabilities of banks remain relatively rigid, and net interest margins continue to shrink, which added to their operating pressures," he said. Nicholas Zhu, a banking analyst at Moody's, said smaller banks' pricing changes usually follow larger banks' initiatives with a time lag. In September, China's largest banks lowered deposit rates in their first broad-based move since 2015 to ease margin pressure. Lower deposit rates could also help ease banks' margin pressures at a time when investors have raised their hopes for a cut in lending rates to prop up the economy.

☆ Slower China factory activity growth challenges economic recovery prospects
▼ + stars: | 2023-03-31 | by ( ) www.reuters.com time to read: +4 min

China's economic activity picked up in the first two months of 2023 as consumption and infrastructure investment drove a recovery after the end of COVID-19 disruptions and retail sales swung back to growth. "However, amid rapidly worsening geopolitical tensions and financial concerns outside of China, this may not last long," they added in a note. While business and consumer sentiment is starting to pick up, the manufacturing sector remains under pressure amid sluggish global demand and stubbornly high costs. Any fallout from a recent crisis of confidence in the global banking sector could also affect demand for China's goods, adding to pressure on manufacturers. Factory activity was hit by slowing growth in production and customer demand, with the output and new orders sub-indexes showing declines from February's levels.

☆ China’s economic recovery is on track. But youth unemployment is getting worse
▼ + stars: | 2023-03-15 | by ( Laura He | ) edition.cnn.com time to read: +3 min

Hong Kong CNN —China’s economic recovery appears to be on track as it gradually emerges from three years of its strict zero-Covid policy. But rising youth unemployment underscores the tough challenges ahead for the new government to achieve its economic targets and maintain social stability. “The economic data released today confirmed the recovery in China was well on track,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management. Recent PMI figures had indicated a strong recovery in China’s economic activity, with February’s factory output from large, state-owned enterprises hitting the highest level in more than a decade. A large number of employment seekers line up outside a job fair in Nanning, Guangxi province on February 18, 2023.

As debt obligations mount, some local governments are pushing banks to extend maturities and cut interest rates, sources said. Reuters Graphics"BLACK HOLES""The LGFVs have become the black hole of the Chinese financial system. Chinese banks and other financial institutions have been cautious on new lending to LGFVs over the past years. In recent months, some state-owned banks, asset managers, and insurers have been looking into their portfolios to screen LGFV borrowers with weaker creditworthiness and dispose them, separate financial sector sources told Reuters. Offshore branches of Chinese financial institutions have been major buyers of the bonds, industry sources said.

☆ China urban employment, per capita spending logged rare declines in 2022
▼ + stars: | 2023-02-28 | by ( Joe Cash | ) www.reuters.com time to read: +2 min

BEIJING, Feb 28 (Reuters) - China's urban employment fell for the first time in six decades last year and per capita spending also marked a rare decline, as harsh COVID-19 curbs ravaged the world's second-biggest economy. The new data from the National Bureau of Statistics also showed the smallest income growth in more than three decades. The number of China's urban jobs dropped by 8.4 million to 459.31 million, the first drop since 1962. Per capita spending fell 0.2% in real terms, the statistics bureau data showed. Disposable income per capita in China grew by just 2.9% in real terms, the second smallest rise since 1989.

☆ China's economic recovery is off to a slow start
▼ + stars: | 2023-02-15 | by ( Evelyn Cheng | ) www.cnbc.com time to read: +3 min

Hector Retamal | Afp | Getty ImagesBEIJING — China's economic recovery is off to a modest start. Migrant workers have mostly returned to work after China's biggest holiday of the year, and children went back to school this week. It also remains to be seen how demand from China's growth picks up as businesses resume work and travel after the Lunar New Year holiday. Robin Xing, chief China economist at Morgan Stanley, pointed out that in-person meetings are particularly important for doing business in China, and that such interactions weren't easily feasible last year. Ting Lu chief China economist, Nomura

☆ China set to launch long-awaited IPO reforms to reset the economy
▼ + stars: | 2023-02-02 | by ( Laura He | ) edition.cnn.com time to read: +3 min

A surveillance camera outside the China Securities Regulatory Commission (CSRC) building in Beijing on July 9, 2021. Tingshu Wang/ReutersUnder the new system, regulators will stop vetting planned share sales by companies. Currently, listings on the main boards of the Shanghai and Shenzhen stock exchanges must be reviewed and approved by regulators before they can be launched. Financial stress has surged, even as the economy has started to recover after three years of strict pandemic controls. Following a chaotic exit from its zero-Covid policy, Beijing is trying to reset the economy and rebuild the trust of investors and businesses.

☆ Instant View: China's economy slows sharply in Q4, 2022 growth one of the worst on record
▼ + stars: | 2023-01-17 | by ( ) www.reuters.com time to read: +10 min

As a result, the Chinese economic growth rate will be below the Chinese government's target of 5% plus." This could weigh on their potential economic growth in the mid-and long-term, and we really need to be paying attention to that." MARCO SUN, CHIEF FINANCIAL MARKET ANALYST, MUFG BANK (CHINA), SHANGHAI"China's Q4 and full-year 2022 GDP growth rates came in higher than expected. Economic growth will have to depend more on productivity growth, which is driven by government policies." IRIS PANG, GREATER CHINA ECONOMIST, ING, HONG KONG"The biggest surprise is the retail sales number, which is really a big beat...

☆ China records first population decline in 60 years
▼ + stars: | 2023-01-16 | by ( Simone Mccarthy | ) edition.cnn.com time to read: +2 min

Hong Kong CNN —China’s population shrank in 2022 for the first time in more than 60 years, a new milestone in the country’s deepening demographic crisis with significant implications for its slowing economy. The population declined in 2022 to 1.411 billion, down some 850,000 people from the previous year, China’s National Bureau of Statistics (NBS) announced during a Tuesday briefing on annual data. The birth rate also fell to a record low of 6.77 births per 1,000, down from 7.52 a year earlier and the lowest level since the founding of Communist China in 1949. To arrest the falling birth rate, the Chinese government announced in 2015 that it would allow married couples to have two children. But after a brief uptick in 2016, the national birth rate has continued to fall.

☆ China's trade shrinks sharply as feeble demand, domestic COVID woes take toll
▼ + stars: | 2022-12-07 | by ( ) www.reuters.com time to read: +4 min

"Of much greater consequence will be the downturn in global demand for Chinese goods due to the reversal in pandemic-era demand and the coming global recession." Inbound shipments were down sharply by 10.6% from a 0.7% drop in October, weaker than a forecast 6.0% decline. But analysts remain sceptical the steps could achieve quick results, as Beijing has not announced a full reopening from COVID containment yet. China's economy grew just 3% in the first three quarters of this year, well below the annual target of around 5.5%. "As global demand weakens in 2023, China will have to rely more on domestic demand," he said.

☆ Reaction to China loosening COVID restrictions
▼ + stars: | 2022-12-07 | by ( ) www.reuters.com time to read: +4 min

Here's what people are saying about the latest moves to ease China's COVID curbs;FRANK BENZIMRA, HEAD OF ASIA EQUITY STRATEGY, SOCIETE GENERALE, HONG KONG"MSCI China has rebounded nicely, valuations have risen and can very gradually normalise. "The next checkpoint will be Chinese New Year; I think markets are looking for further relaxation to facilitate return to their hometowns by Chinese New Year." MITUL KOTECHA, HEAD OF EMERGING MARKETS STRATEGY, TD SECURITIES, SINGAPORE"These are significant steps, and the reality is the current policy had become very difficult to administer given how widespread COVID is in the country. SAKTIANDI SUPAAT, REGIONAL HEAD OF FX RESEARCH & STRATEGY, MAYBANK, SINGAPORE"I think markets have, in some ways, priced in that element (of further easing). I mean, it's better for China to deregulate its COVID restrictions but even if it's a booster for the Chinese economy and commodity prices, that will work negatively for a Fed pause because it tightens monetary conditions."

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