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International Economy
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17 Jul 2020
The Chinese economy reverted to growth of 3.2 percent YoY in 2Q20, versus the 6.8 percent YoY contraction reported for 1Q20, thanks to the government’s effective measures in combating the coronavirus (COVID-19) pandemic, thus allowing economic activity in the country to return to normalcy. Its industrial production resumed a 4.8 percent YoY growth in June, ... Read more
17 Apr 2020
The Chinese economy contracted by 6.8 percent (YoY) in 1Q20, marking the first time that the Chinese economy has experienced a contraction since statistical reports began in 1992. The main reason for this phenomenon is the stringent COVID-19 disease control and prevention measures issued by the Chinese authorities, including lockdown orders and orders for domestic tour operators to cease tour package sales. Such measures have caused a partial stagnation of economic activity throughout China. Some of the impacts can be seen in retail sales and industrial production figures in 1Q20, which declined by 19.64 percent (YTD, YoY) and 8.4 percent (YTD, YoY), respectively.... Read more
30 Jan 2020
The transmission of the 2019 Novel Coronavirus (n-CoV) continues to escalate, prompting the Chinese authorities to take extreme measures to prevent the virus from spreading. For example, they locked down 18 cities in Hubei province by closing off access to the cities and transportation in the province. Moreover, group tours and travel packages organized by both domestic and international travel agents are suspended.... Read more
17 Jan 2020
China’s economy, in 4Q19, slowed from the previous quarter to grow 6.0 percent YoY, driven by positive factors from the latest development of the US trade conflict with China. The partial agreement was attributed to the turnaround of China’s export and manufacturing sectors in 4Q19 with acceleration of exports after the US had hinted at delaying tariff imposition and resuming talks with China. Nonetheless, overall China’s economic indicators in 2019 declined significantly from the figures in 2018. China’s economy grew 6.1 percent in 2019, which was a substantial drop from the 6.6 percent growth in 2018. The positive economic figures in 4Q19 were pushed mainly by short-term factors and a low base. The stimulus measures somewhat sustained the growth in 2019 amid a fragile domestic economy. ... Read more
21 Oct 2019
The Chinese economy grew 6.0 percent YoY in 3Q19, representing the slowest growth in almost 30 years and declining from the 6.2 percent pace recorded during 2Q19. The disappointing economic performance, which stands at the lower end of China’s growth target, will likely force the government to introduce new economic stimuli in order to ensure that its 2019 economic growth remains within the set target band of 6.0-6.5 percent YoY. Meanwhile, weak internal and external demand has steadily inhibited the Chinese economic growth while a series of economic stimuli implemented by the government may not be sufficient to shore up the economy. In addition, risk in the financial sector as a result of lofty debt has forced Beijing to be cautious over its economic stimuli, in particular monetary policy.... Read more
20 Sep 2019
The People’s Bank of China (PBOC) has announced a plan to release its own central bank digital currency (CBDC) with an aim to increase the role of the Chinese Yuan on the world market and to combat money laundering. The new currency will be retail CBDC that Chinese can use in lieu of cash. It will be backed 1:1 by Renminbi fiat and managed by a two-tiered structured system. PBOC will issue and circulate the digital currency to commercial banks and other players in China’s digital currency system (the first tier), enabling these commercial banks and other players to offer deposit and withdrawal services for digital currency to the general public (the second tier).... Read more
7 May 2019
The trade talks between the US and China last week did not produce a satisfactory outcome either side. Moreover, the US President Donald Trump announced plans to further raise tariffs on USD200 billion of Chinese goods from 10 to 25 percent starting Friday, May 10. The latest move puts greater pressure on world trade and reflects Washington’s effort to force Beijing to pursue negotiation guidelines in order for both sides to reach a mutually-satisfying agreement and stop the trade war by the end of 2019.... Read more
17 Apr 2019
Chinese economy in 1Q19 expanded 6.4 percent YoY compared to 6.6 percent growth in 2018, while exports increased only 1.0 percent YoY versus 9.9 percent in 2018. Nonetheless, the government’s stimulus policy has begun to bear fruit to support the growth momentum of the Chinese economy. The Chinese government has given an approval to 16 infrastructure projects since December 2018 with a combined investment of CNY1 trillion (USD160 billion), pushing the fixed asset investment in 1Q19 to accelerate 6.3 percent YoY versus 5.9 percent YoY in 2018. Additionally, the domestic consumption begins to recover, thanks to the government’s economic stimulus measures. China’s retail sector surged at the highest rate in six months at 8.7 percent YoY. ... Read more
22 Jan 2019
China’s economy grew 6.6 percent in 2018, declining substantially from the 6.8 percent pace recorded in 2017. Its economy has weakened steadily, especially during 4Q18 to 6.4 percent, representing the lowest growth in 28 years. The sharp decline in 4Q18 economic performance was attributable chiefly to a decelerated export growth of 4.3 percent YoY against the 11.1 percent pace reported for 3Q18. China’s disappointing export performance was clearly a result of the protracted trade war, which has crippled its business sector to make profit. In November 2018, profit in the Chinese business sector contracted for the first time in over three years at only 1.8 percent despite attempts by the government to sustain economic growth through numerous policy tools, including liquidity injection via financial institutions and easing control of local government investment. A slower growth in M1 at only 1.5 percent in December also shows that the effectiveness of China’s monetary policy has become increasingly restricted and liquidity injection into the economic system was intended only to maintain financial costs. As a result, private investment will continue to be subdued ahead. In addition, the slowing GDP growth seen in the tertiary industry signals that domestic demand has began to decline. ... Read more
19 Oct 2018
China’s economic growth slipped to 6.5 percent YoY in 3Q18, representing a record low since 2009. The decelerated growth was attributable to steady drop in its industrial production amid the country’s trade dispute, which is expected to escalate ahead, plus persistent sluggishness seen in household consumption from 2Q18. However, exports overall grew 11.2 percent YoY, sustained by accelerated industrial production since 2Q18. China’s increased shipments to the US also helped support its 3Q18 economic performance. ... Read more
19 Dec 2017
China’s latest economic indicators show that the Chinese economy has maintained momentum. Although China’s domestic economic activity shows signs of a mild slowdown, their external trade remained solid. China’s economy continues to expand, but industrial manufacturing and investment have cooled, underscored by November industrial output rising 6.1 percent YoY, below the 6.2 percent gain in October, decelerating for a second month in a row. At the same time, China’s fixed-asset investments have slowed from early in the year to 7.2 percent growth YoY over January-November (11M17), versus the 7.3 percent YoY increase over January-October (10M17), marking a fifth consecutive monthly decline and the lowest growth so far this year.... Read more
17 Nov 2017
The latest set of economic indicators unanimously point to a Chinese slowdown, whether in terms of production, investment, or consumption. Indeed,... Read more
4 Jan 2007