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☆ Goldman joins Wall Street banks in cutting China's growth outlook as post-Covid bounce fades
▼ + stars: | 2023-06-19 | by ( Jihye Lee | ) www.cnbc.com time to read: +3 min

(Photo by Costfoto/NurPhoto via Getty Images) Nurphoto | Nurphoto | Getty ImagesGoldman Sachs became the latest Wall Street bank to downgrade its growth forecast for China, as the world's second-largest economy stutters and loses momentum after its coronavirus reopening. "With the reopening boost quickly fading, medium-term challenges such as demographics, the multi-year property downturn, local government implicit debt problems, and geopolitical tensions may start to become more important in China's growth outlook," they said. Stock Chart Icon Stock chart iconUBS also sees continued weakness in China's economy ahead, particularly focusing on the second quarter of the year. Wang noted that uncertainty in China's property sector remains a central risk to its forecast and could bring its growth outlook even lower. "Risks to our forecast is slightly biased towards the downside, mainly from uncertainties in property market and path of property policy support ahead, as well as weaker external demand," she said.

Persons: Goldman Sachs, Chief China Economist Hui Shan, Wang Tao, Wang Organizations: Getty, Nurphoto, Chief China Economist, UBS, Bank of America, JPMorgan, U.S, People's Bank of, Federal, UBS Investment Bank's Locations: Nanjing, East China's Jiangsu Province, China, People's Bank of China, saar

☆ China's economic recovery is stalling. Here's what to expect next
▼ + stars: | 2023-06-16 | by ( Clement Tan | ) www.cnbc.com time to read: +4 min

watch nowA raft of weak Chinese economic data in May has raised hopes of decisive policy intervention. A slew of economic data from industrial production and fixed asset investment to retail sales and trade fell short of expectations, with China teetering on the brink of deflation as its post-pandemic economic recovery stalls. "Weak investments data suggest that authorities are unlikely to stop at the monetary easing we saw this week," Oxford Economics' lead economist Louise Loo wrote in a note after Thursday's China data release. "We therefore continue to expect announcements of further 'piecemeal' property sector easing measures to follow in the coming weeks," Loo wrote. Goldman Sachs economists said last month that getting young people back to work would give China's economic recovery a sizable boost, given that they account for almost 20% of consumption in China.

Persons: China teetering, Helen Qiao, Louise Loo, Loo, Goldman Sachs, America's Qiao Organizations: China's State Council, Communist, China's National Statistics Bureau, Bank of America's, CNBC, People's Bank of, Oxford, Afp, Getty, Bank Locations: China, People's Bank of China, Chinese, Chongqing, America's

☆ China cuts medium-term lending rate as youth unemployment hits new record high
▼ + stars: | 2023-06-15 | by ( Michelle Toh | ) edition.cnn.com time to read: +2 min

The People’s Bank of China lowered its key policy rate — the medium-term lending rate — from 2.75% to 2.65%. It was the first such rate reduction since last August, and largely expected following a surprise cut by the central bank Tuesday to China’s seven-day reverse repo rate. The trimming of the repo rate — also by 0.1 percentage points to 1.9% — marked its first since August. Urban youth unemployment — already at record levels — hit another new high in May, reaching 20.8%. “They need [economic] growth.”The youth unemployment rate could get even worse when a record 11.6 million college students enter the job market this summer, as estimated by the education ministry earlier this year.

Persons: —, Jamie Dimon, “, ”, Larry Hu Organizations: Hong Kong CNN, People’s Bank of, Urban, JPMorgan, Bloomberg Locations: Hong Kong, China, People’s Bank of China, China’s

☆ China central bank seen cutting medium-term policy rate: Reuters poll
▼ + stars: | 2023-06-14 | by ( ) www.reuters.com time to read: +2 min

SHANGHAI/SINGAPORE, June 14 (Reuters) - China's central bank is widely expected to cut the borrowing cost of medium-term policy loans for the first time in 10 months on Thursday, after it lowered two key short-term policy rates, a Reuters poll showed. China remains an outlier among global central banks as it loosens monetary policy to shore up a stalling recovery but further rate cuts will widen the yield gap with U.S. assets and risk greater outflows. The MLF rate serves as a guide to the benchmark loan prime rate (LPR), and markets usually use the medium-term rate as a precursor to any changes to the lending benchmark. Looking ahead, we expect another 10bp cut in the MLF rate in 3Q23." The PBOC last cut the MLF rate in August 2022 to prop up the broad economy disrupted by stringent zero-COVID measures.

Persons: Ting Lu, Larry Hu, Wu Fang, Winni Zhou, Tom Westbrook, Jacqueline Wong Organizations: People's Bank of China, Nomura, Macquarie, Thomson Locations: SHANGHAI, SINGAPORE, China, lockstep

☆ China has the potential to be a 'powerful competitor' in artificial intelligence, BofA says
▼ + stars: | 2023-06-14 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailChina has the potential to be a 'powerful competitor' in artificial intelligence, BofA saysWinnie Wu, chief China equity strategist at the investment bank, discusses the "massive challenges" that the country faces in the development of artificial intelligence as well as its vast potential for growth in the area.

Persons: Winnie Wu Organizations: China Locations: China

☆ China makes surprise rate cut as economic recovery loses steam
▼ + stars: | 2023-06-13 | by ( Laura He | ) edition.cnn.com time to read: +3 min

The rate will drop to 1.9% from 2%, according to the People’s Bank of China. The rate cut reveals “growing concerns among policymakers” about the health of China’s recovery, Capital Economics analysts said on Tuesday. “The … rate cut came earlier and sharper than our and market expectations, highlighting the sense of urgency to alleviate economic momentum and business confidence,” said Becky Liu, head of China macro strategy for Standard Chartered Bank. That rate cut also came as a surprise and followed a week of turmoil in global financial markets triggered by the failure of some regional US banks. In the language of China’s policymakers, that implies a bias towards easing monetary policy, said Larry Hu, chief China economist for Macquarie Group.

Persons: ”, Becky Liu, Zhaopeng Xing, Betty Wang, Yi Gang, Larry Hu, “ Governor Yi Organizations: Hong Kong CNN, People’s Bank of China, Capital, Standard Chartered Bank, PMI, ANZ Research, Macquarie Group, “ Locations: Hong Kong, China

☆ Economic stimulus in China would be a win for 3 stocks tied to Chinese consumers
▼ + stars: | 2023-06-13 | by ( Paulina Likos | ) www.cnbc.com time to read: +6 min

The recovery in China has been much slower than what other major countries experienced when they lifted their pandemic restrictions. Still, the Chinese consumer has proved to be resilient in the face of these broader economic challenges. It marked the fastest pace of growth since the first quarter of 2022, fueled by higher spending from Chinese consumers. Club stock results Recent financial results from our China-exposed companies show that Chinese consumers have been holding up even as broader economic recovery is delayed. China is a growth market for each company and improvement in economic activity there should be a catalyst for these stocks.

Persons: Estee Lauder, —, Ting Lu, WYNN, hasn't, Jim Cramer's, Jim Cramer, Jim, Jason Lee Organizations: Starbucks, Wynn Resorts, WYNN, China Index Academy, National Bureau of Statistics, Club, Gaming, Prestige, CNBC Locations: China, China's, Beijing, Macao, Asia, SBUX

☆ China, Its Economy Flagging, Prods Consumers to Save Less and Spend More
▼ + stars: | 2023-06-09 | by ( Daisuke Wakabayashi | ) www.nytimes.com time to read: +3 min

Why It MattersA reduction in the deposit rates is one lever that policymakers can use to stimulate spending. The hope is that the lower rates will give consumers an incentive to spend or invest money instead of parking their savings in the bank. After China scrapped its Covid restrictions late last year and reopened the economy, there were expectations that pent-up demand would push consumers to start spending freely — but that has not played out in many sectors of the economy. In the first three months of the year, China’s economy grew at 4.5 percent, helped by a pickup in spending on dining out and luxury goods. Betty Rui Wang, senior China economist at the Australia-based bank ANZ, said confidence in the economy is weak across Chinese households and private-sector businesses.

Persons: Larry Hu, Betty Rui Wang, “, ”, Wang, Li You Organizations: China, Macquarie Group, People’s Bank of China, ANZ, Communist, Commerce Locations: China, Australia, Beijing

☆ 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 stimulus could focus on its 'dire' property sector. Here's what economists expect
▼ + stars: | 2023-06-07 | by ( Jihye Lee | ) www.cnbc.com time to read: +3 min

China's economic recovery is losing momentum after an initial burst in consumer and business activity early in the year, prompting calls for more policy stimulus to bolster growth. // "The stimulus package could be centered on the property sector, with expansionary monetary and fiscal policies to keep up growth momentum," Citi economists led by Xiangrong Yu wrote in a Tuesday note. Don't expect a 'bazooka'Nomura's Chief China economist Ting Lu said "the situation of China's property sector appears dire." The Japanese investment bank doesn't expect a "bazooka" stimulus package but predicts it will be introduced in a cautious manner. They pointed to the latest wording from top policymakers and their emphasis on "security" – how this is an indicator for the scale of a stimulus package to come.

Persons: Qilai Shen, Xiangrong Yu, Ting Lu, Nomura Organizations: Bloomberg, Getty Images Bloomberg, Getty, Citi Locations: Wuxi, China, Beijing

☆ Is China heading for Japan-like stagnation? Economist says the worst is likely behind us
▼ + stars: | 2023-06-05 | by ( Evelyn Cheng | ) www.cnbc.com time to read: +3 min

Jade Gao | Afp | Getty ImagesBEIJING — China's economic recovery from the pandemic is set to broaden, meaning the country isn't headed toward Japan-style stagnation just yet, according to Macquarie's Chief China Economist Larry Hu. The meeting, led by Premier Li Qiang, noted the foundation of China's economic recovery is not yet solid. Similar, but not the same as, Japan"While the worst is behind us, the recovery is far from being self-sustaining," Macquarie's Hu said. Stock Chart Icon Stock chart icon iShares MSCI China ETF"The absence of a self-sustained recovery in China today is mainly a cyclical, not structural, phenomenon," Hu said. The iShares MSCI China ETF is down by about 4% so far this year.

Persons: Jade Gao, Larry Hu, Hu, Macquarie, China's, Premier Li Qiang, Macquarie's Hu, Japan's Organizations: Afp, Getty, BEIJING, China, State Council, Premier, Companies Locations: Beijing, Japan, China

☆ New warning signs emerge for China's property market
▼ + stars: | 2023-05-31 | by ( Evelyn Cheng | ) www.cnbc.com time to read: +1 min

Construction on a real estate development project gets underway near the Bund in Shanghai, China, on May 25, 2023. BEIJING — New data show China's massive property sector is still struggling to turn around, despite signs of recovery earlier this year. Beijing has eased its pressure on real estate developers in the last year, following a crackdown on their debt levels in August 2020. The property sector and related industries have accounted for more than a quarter of China's economy, according to Moody's estimates. Both weeks' sales volume was lower than during the same period in 2019, prior to the pandemic, the report said.

Persons: That's, Ting Lu Organizations: Bund Locations: Shanghai, China, BEIJING, U.S, Beijing

☆ Very few U.S.-China flights are back despite the end of Covid
▼ + stars: | 2023-05-31 | by ( Evelyn Cheng | ) www.cnbc.com time to read: +2 min

Previously, the only regular direct flights by Chinese carriers between mainland China and New York since the pandemic were from Shanghai and Guangzhou. Flights of Air China are parked on the tarmac of Beijing Capital International Airport in Beijing, China, March 28, 2016. watch nowIn March, Delta announced it resumed direct flights between the U.S. and China — from Shanghai to Seattle and Detroit. Overall, mainland China's international flights remains below 40% of 2019 levels, the Nomura report said. The analysts expect that level to pick up to 70% by the end of the year as international flights recover around the summer holiday season.

Persons: Nomura, Ting Lu, Kim Kyung Hoon Organizations: China, U.S, Air, U.S . Department of Transportation, Beijing Capital International Airport, Reuters, American Airlines, Delta Locations: BEIJING, U.S, China, Egypt, Saudi Arabia, Italy, Variflight, Middle East, Iran, Beijing, Ukraine, Air China, New York, Shanghai, Guangzhou, Los Angeles, Delta, United, Seattle, Detroit

☆ China's disappointing rebound could bring in more stimulus, economists say
▼ + stars: | 2023-05-30 | by ( Elliot Smith | ) www.cnbc.com time to read: +5 min

Photographer: Qilai Shen/Bloomberg via Getty Images Qilai Shen | Bloomberg | Getty ImagesChina's much-vaunted economic rebound after its emergence from strict zero-Covid lockdown measures has yet to fully materialize, prompting some economists to speculate that further fiscal stimulus or monetary policy easing could be coming down the pipeline. Data from China's Bureau of Statistics shows that 6 million of the 96 million 16 to 24-year-olds in the urban labor force are currently unemployed. watch nowIn a research note Monday, Capital Economics assessed that, despite losing some momentum, China's economic recovery was still progressing at the start of the second quarter, with scope for further service sector-led improvement. But we do not expect policy rate cut or major fiscal stimulus, barring a precipitous fall in exports in the coming months." Any consensus among economists as to the trajectory of fiscal and monetary policy seems to be unraveling in light of the tenuous recovery.

☆ 3 reasons why even China doesn't want the yuan to replace the dollar as the world's reserve currency
▼ + stars: | 2023-05-29 | by ( Huileng Tan | ) www.businessinsider.com time to read: +8 min

The Chinese yuan is one of the top contenders challenging the USD's dominance as a reserve currency. However, Beijing may not be fully supportive of making the yuan the reserve currency of choice. Here's why even China isn't that keen on de-dollarizing the world economy and making the yuan the top reserve currency. So, the US will need to contend with ever larger amounts of deficit, in order to maintain its pre-eminent reserve currency position. Given the issues standing in Beijing's way, it's unlikely for the yuan to take over the greenback's position as the world's reserve currency of choice, said Green.

☆ As G-7 Summit kicks off in Hiroshima, China and Russia are on everyone’s minds
▼ + stars: | 2023-05-18 | by ( Jihye Lee | ) www.cnbc.com time to read: +5 min

A man rides his bicycle past a "G7 Hiroshima" flower sign at the Peace Memorial Park in Hiroshima, ahead of the G7 Leaders' Summit, on May 17, 2023. (Photo by Philip FONG / AFP) (Photo by PHILIP FONG/AFP via Getty Images) Philip Fong | Afp | Getty ImagesThe annual Group of 7 summit officially kicks off on Friday in Hiroshima, Japan. A sign of G7 Hiroshima Summit is pictured in Hiroshima, ahead of the G7 Leaders' Summit, on May 16, 2023. G-7 finance leaders and central bankers finalized a three-day meeting in Niigata last week. "The U.S. will have a package of sanctions associated with the G-7 statement that will center on this enforcement issue," he told reporters.

The consumer price index (CPI) in April rose 0.1% year-on-year, the lowest rate since February 2021, and cooling from the 0.7% annual gain seen in March, the National Bureau of Statistics (NBS) said. Reuters GraphicsPBOC TESTEDOverall inflationary pressures remain low with the core consumer inflation, which excludes volatile food and energy prices, up 0.7%, unchanged from the previous month. The statistics bureau attributed the weaker consumer inflation to the base effect. Vegetable prices extended their decline to 13.5% and pork, a major driver of CPI, slowed its price growth to 4.0% from 9.6% in March. "Securing income growth and improving consumer confidence remain key policy priorities for delivering a more sustainable consumption recovery," said Pang.

☆ Consumer prices in China rose 0.1% in April, the slowest rate in two years
▼ + stars: | 2023-05-11 | by ( Jihye Lee | ) www.cnbc.com time to read: +1 min

The People's Bank of China (PBOC) building in Beijing, China, on Tuesday, April 18, 2023. Source: BloombergChina's consumer price index rose 0.1% in April year-on-year, the slowest since early 2021. Economists surveyed by Reuters expected to see consumer prices rise 0.4% from a year ago and remain unchanged from the previous month. Inflation in China was led by food and services, according to the National Bureau of Statistics – food prices rose by 0.4% and service prices rose 1% from a year ago. That's a stark contrast to the latest U.S. inflation data overnight which showed consumer prices rose 4.9% in April – easing in the wake of the Federal Reserve's efforts to tame inflation by hiking rates 10 consecutive times.

Economists in a Reuters poll had predicted no growth in imports and an 8.0% increase in exports. Other recent data also showed 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 coal imports fell in April from a 15-month high in the prior month, snapping back as demand weakens in Asian giant. Imports of copper - a proxy for global growth - and natural gas were also down in the same period. "The global economy is deteriorating and will weaken China's manufacturing sector," said Iris Pang, chief China economist at ING.

☆ China’s shrinking imports, slower exports growth darken economic outlook
▼ + stars: | 2023-05-09 | by ( ) edition.cnn.com time to read: +4 min

Economists in a Reuters poll had predicted no growth in imports and an 8.0% increase in exports. Other recent data also showed 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 coal imports fell in April from a 15-month high in the prior month, snapping back as demand weakens in Asian giant. Imports of copper, a proxy for global growth, and natural gas were also down in the same period. “The global economy is deteriorating and will weaken China’s manufacturing sector,” said Iris Pang, chief China economist at ING.

BEIJING, May 8 (Reuters) - China's exports were expected to have risen again in April, albeit at a less robust pace than a month earlier, a Reuters poll showed, supported by unfulfilled orders after last year's COVID disruptions though slowing global growth is darkening the outlook. With many of China's major trade partners on the brink of recession, analysts remain wary about the outlook, noting that the stunning improvement in March partly reflects suppliers catching up with unfulfilled orders from last year's COVID disruptions. 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. The government has set a modest GDP growth target of around 5% for this year, after badly missing the 2022 goal.

☆ China investment consensus cracks as politics fuel fears
▼ + stars: | 2023-04-28 | by ( Tom Westbrook | ) www.reuters.com time to read: +5 min

It is unlikely to be resolved quickly even if the markets keep rallying and China economy keeps global growth ticking. Data paints a murky picture, but supports brokers' analysis that the bid from long-only money managers is absent. Allocation analysis from data firm EPFR shows a broad downtrend, especially to U.S.-domiciled China funds. EPFR figures show allocation to China funds outside the U.S. has increased for two years and mainland markets' recent performance has also been encouraging. "Our reservations about China's long-term investment prospects are based on our outlook for returns to capital."

☆ JPMorgan, Citi raise full-year forecasts for China's economy
▼ + stars: | 2023-04-19 | by ( Jihye Lee | ) www.cnbc.com time to read: +4 min

Steven Han | Moment | Getty ImagesAnalysts at JPMorgan and Citi raised their full-year forecasts for China's economy after it delivered an impressive first-quarter gross domestic product growth of 4.5% on Tuesday. Citi economists noted that while services outperformed in the consumption-driven growth for the first quarter, they remain cautious on their forecasts. "The release of pent-up demand during Covid and holiday helped, but we remain cautious on its outlook without big stimulus in sight and the discounts intensifying," Citi economists wrote. With economy stabilization playing out, structural reform could be the next theme to watch," Citi economists wrote. "Risks facing our full-year GDP forecast of 5.7%Y is now skewed to the upside given a strong entry," Morgan Stanley economists led by Zhipeng Cai wrote.

☆ China's economy grew 4.5% in the first quarter, the fastest pace in a year
▼ + stars: | 2023-04-18 | by ( Jihye Lee | ) www.cnbc.com time to read: +3 min

The economy grew 3% in 2022, less than Beijing's official target of around 5.5% set in March last year. For 2023, the government last month set a modest growth target of "around 5%." On pace to exceed targetGoldman Sachs said China's first-quarter growth of 4.5% supports the firm's full-year outlook for the economy to grow 6%. "Today's data are in line with our full-year bullish view for China growth," Goldman Sachs' chief China economist Hui Shan told CNBC. We keep the full-year GDP forecast at 5% as external demand should be a concern for the year," Pang wrote.

☆ From hotpot to bubble tea, BOFA says China may be seeing signs of consumption recovery
▼ + stars: | 2023-04-12 | by ( Lee Ying Shan | ) www.cnbc.com time to read: +1 min

Signs of recovery may be emerging in China's luxury and consumer discretionary goods sectors, said an analyst from Bank of America, even as China released data showing consumer inflation at an 18-month low. "In terms of luxury high-end [consumption] — we're seeing quite strong recovery," said the bank's chief China equity strategist Winnie Wu. "On the lower end, the bubble tea, the Shabu Shabu, those hotpots — we're seeing good recovery." China's luxury market fell 10% in 2022, declining for the first time in five years, according to Bain & Company. Wu, however, maintained that a good overall recovery across China's consumer sector has yet to be seen.

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