China state planner sees consumer, property prices rising in 2016 China's consumer prices are likely to rise modestly this year while property prices in some major cities could climb, the state planner said in a report published in the China Securities Journal on Tuesday. "Consumer price rises will not be too large as economic growth will continue to steadily slow," the price monitoring center of the National Development and Reform Commission (NDRC) said in the report. China aims to keep consumer inflation at around 3 percent in 2016 to reflect factors such as rising labor costs, price fluctuations of agricultural products and the impact of further price reforms. China's producer prices will continue its clear downward trend, but the extent of its decline will be reduced, the report added. Annual consumer inflation edged up to 2.3 percent in February - the fastest pace since July 2014, while producer prices slowed their slide for a second straight month, taking some pressure off policymakers to rush out more monetary easing. The government aims to keep annual consumer inflation around 3 percent this year. Property prices in some of China's second-tier cities may rise significantly, and prices in Beijing, Shanghai and Shenzhen will also continue to rise, it said. Real estate in third and fourth-tier cities will continue to face downward pressures, the report said, but prices in some third and fourth-tier cities may rise. Municipal authorities in Shanghai have tightened mortgage down payment requirements for second home purchases, in a move to cool an overheating property market and reduce fears of a bubble. The Chinese yuan is likely to face slight depreciation pressures in 2016, with fluctuations increasing as the U.S. dollar strengthens, the report said. Wage rises will slow as the economy continues to slow, profit growth decreases and more businesses lose money or go bankrupt, the report said. Job opportunities will also decrease as China tackles overcapacity and automation increases.
China's economy shows signs of improvement in first quarter China's economic indicators showed signs of improvement in the first quarter but a sluggish world economy and volatile markets deprive the changes of a solid basis, state television quoted Premier Li Keqiang as saying on Friday. Li said the overall economic situation was better than expected and he was confident the government would be able to maintain medium- to high-speed economic growth, despite the difficulties. "In the first quarter of this year, China's economic indicators showed more improvement," Li said, but added, "The basis of such improvement is not solid due to the impact of sluggish world economy and market volatility." Li made the remarks during a meeting with the visiting German foreign minister, Frank-Walter Steinmeier. Top Chinese officials have said the economy was showing signs of improvement while capital outflows were easing. The government is due to release key economic data, including first-quarter economic growth, next week. China's economic growth slowed to 6.8 percent in the fourth quarter, its weakest since the financial crisis that began in 2007 and 2008. Separately, in a paper published on Friday, researchers at the central bank said China should gradually adjust banks' reserve requirement ratio (RRR), based on the balance of payments and economic changes. The People's Bank of China has cut interest rates six times since November 2014 and reduced its RRR - the proportion of deposits banks must hold with the central bank as reserves - several times, to support the slowing economy. The central bank is widely expected to cut the RRR further, to support economic growth. LINK - http://www.reuters.com/article/us-china-economy-growth-idUSKCN0X51C6
China steel exports hurt market economy status, industry official says A flood of Chinese steel product exports is damaging to the country's market economy status, the head of the steel association said in comments at a conference in Beijing on Saturday. China Iron and Steel Association Secretary General Liu Zhenjiang said the recovery in prices in 2016 had created a "vicious circle," driving up raw material costs and also production. "Cutting steel capacity is important but controlling steel output is more important," he said. China is seeking to be granted market economy status by the European Union, where its flood of steel exports, combined with new tariffs imposed on foreign imports, has prompted a fierce political debate, particularly in Britain. LINK - http://www.reuters.com/article/us-china-steel-exports-idUSKCN0X602N
China March consumer inflation stable, but producer prices fall again China's consumer price inflation rose less than expected in March, flattening out after a four-month strengthening trend, but wholesale prices remained stubbornly in deflation. Consumer prices in March rose 2.3 percent, below a median forecast of 2.5 percent in a Reuters poll but equal to February's increase of 2.3 percent. Although the prior month's figure represented the fastest rise in more than a year, the increase was driven largely by sharp gains in food prices following an unexpectedly harsh winter. Economists have been watching closely to see how inflation evolves in China this year following a prolonged easing campaign by the central bank beginning in late 2014, which has boosted credit, but has yet to result in substantial price increases. Producer prices fell 4.3 percent in March, extending their decline to a full four years, but at a slower rate than forecasts of a 4.6 percent decline. Falling commodity prices and overcapacity in key industrial sectors have helped mire producer prices in a lengthy slump, although declines have eased in recent months. A key factor supporting consumer prices, which have trended sideways around 1.5 percent year-on-year since late 2014, has been the relative strength of the labour market. However, recent data paints a mixed picture on conditions for China's workers. While the official manufacturing purchasing managers' index (PMI) for March showed job losses slowing, a separate private survey from Caixin showed deteriorating labour market conditions in both the manufacturing and service sectors. China grew at its slowest pace in more than two decades in 2015, as the economy struggled with an extended correction in the real estate market, weak global demand and high corporate debt levels. LINK - http://www.reuters.com/article/us-china-economy-inflation-idUSKCN0X8037
China trade beats expectations as exports post first rise since June China's trade performance blew past expectations in March, with exports returning to growth for the first time in nine months, providing more evidence of stabilization in the world's second-largest economy. Read full article here: http://www.reuters.com/article/us-china-economy-trade-idUSKCN0XA07D
China Stocks Extend Decline as Financial, Industrial Shares Drop Chinese stocks fell for a second day as losses by financial and industrial companies overshadowed gains by energy producers. Read full article here: http://bloom.bg/1YHXsDe
China’s Stocks Extend Weekly Drop as Metals Shares Pace Retreat China’s stocks extended their longest streak of weekly declines since 2012, paced by a retreat in metals and technology companies Read full article here: http://bloom.bg/1X6R8Z8
The Chinese economy, after growing at double digit growth rates for three decades has been struggling with slowing growth since the last six years. Recently, the China Academy of Social Sciences(CASS),forecasted slower GDP growth (6.5%) in 2017 as well. Consider this: As per a recent article published on "thewire.in",China debt as a %of GDP is ~280% - higher than debt of developed countries like US(269%),Germany (258%) and emerging countries like Brazil (160%) and India (135%). Its total aggregate debt has risen from $2tn to $28tn in the past few decades. In this scenario, if the Fed keeps on raising rates, China would face a tough task of preventing capital outflows and maintaining stability of yuan. While its growth in 2016 was fuelled by the fiscal stimulus and debt, its ability to maintain a similar growth pace next year remains constrained in light of a heavy debt burden and threat of property bubble burst. Policy room for PBOC to propel growth is also constrained given the US rate hikes and higher inflation from excessive onshore liquidity. Another major headwind for China in the coming few years will be the impact of a Trump led trade war. While these threats (Fed rate hike, property bubble burst and Trump led trade war) are not expected to immediately impact China's growth in H1FY17, there is an increasing probability that these risks might push China's GDP growth rate to sub 6% levels beyond FY2017. Source: CityFALCON
#ChinaGDP Q4 at 6.8%,beats expectations.But expect softer growth going ahead as tailwinds from fiscal stimulus fade http://hubs.ly/H05Y_2P0
Most #Asianmarkets up,investors cautiously optimistic post #POTUS swearing-in. $Gold up too on protectionism concern http://hubs.ly/H05ZWM-0
The US bond market has faced multiple headwinds of late including rising inflation expectations and Fed raising interest rates after almost 8 years of zero interest environment. Yields have already risen from 1.86% during election to 2.45% by the end of the year 2016. But there is an additional headwind that the bond markets face: Sell off of US treasuries at record rates by China -the largest owner of US debt. According to a CNN article,China's holdings of US Govt. bonds fell $66bn in November, highest since 2011,to $1.05tn and have dropped $195bn since May last year. With China trying to defend its weakening currency, the reasons for this decline seem benign, but there remains a possibility that this sell-off could make the already increasing yields go even higher. This could have implications for the consumer borrowing costs given that Treasury rates serve as benchmarks for loan rates. The US may find it easier to attract capital to fund its increasing deficit given its high interest rates as compared with the very low / negative rates elsewhere in the developed nations. But it must be prepared with the possibility of not having China as its number 1 lender to finance its growing federal deficit.
#Asianmarkets up today from Fri. #Wallstreet rally after Trump move to slash bank regulations,strong labour report http://hubs.ly/H067fQD0
#ChinaFXreserves below $3tn,at 6yr lows as govt. defends currency slide. News triggers #Bitcoin rise of 2% on Tue.
#API:US crude stock up 14.2mnb,exceeds estimates more than 5x.$Oil extends Tue loss #Asianmarkets lower #Brent #WTI
Holiday demand ups #Chinainflation to multi-yr high. Sustainability doubtful amid tight money policy, property prices
I don't think so. China had a stable and steady economy in the last two quarters, (see Prediction for the Chinese economy in 2017). This is due to the rising exports and increasing employment rate.
Chinese Stocks Diverge Based on Market Cap Tue, Feb 11, 2020 Just like in the US where large caps have been outperforming their smaller-cap peers recently, we're seeing signs of the same trend playing out in the Chinese equity market as well; especially since the recent highs in January. For starters, though, it's pretty amazing to think that China's Shanghai Composite Index is down just 7% from its recent highs. With a large percentage of the country's citizens virtually under house arrest and many businesses and factories across the country closed, a 7% decline seems like a walk in the park. Admittedly, those declines were a lot steeper at this time last week, but the magnitude of the bounce, even if it was aided by government stimulus, is impressive. While the Shanghai Composite is down just 7%, the average stock in the index is down a full percentage point more at 8.13%. Looking at how stocks have performed based on market cap shows that there has been a clear relationship between size and performance. The chart below shows the average performance of the approximately 1,500 stocks in the Shanghai Composite Index since the close on 1/17 grouped by decile according to market cap. While the decile of the largest stocks in the Shanghai Composite is down less than 5%, the three deciles with the smallest components are all down 11% or more. When looking at the percentage of stocks in each decile with positive returns since 1/17, it's a similar picture as a higher percentage of larger components in the index have seen positive returns than their smaller peers. Whereas more than 21% of the Shanghai Composite Index's components have had positive returns since 1/17, barely 2% of the Shanghai Composite's smallest 150 components are positive during that span.
