18 Apr 2022
International Economy
China’s economy grew 4.8 percent YoY and 1.3 percent QoQ in the first quarter of 2022 amid pressing issues. Details concerning China’s economic growth in 1Q22 are as follows... Read more
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16 Jan 2020
The US-China phase 1 trade pact was officially inked on January 15, 2020, lifting hopes that their 2-year tensions could ease. However, the US and China will continue to experience higher tariffs, in particular China, as some of its exports to US are still subject to additional tariffs at the rate of 7.5 percent despite the US decision to reduce tariffs on Chinese imports worth USD120 billion while other Chinese imports worth USD250 billion are still subject to tariffs at the rate of 25 percent in 2020. ... Read more
7 Aug 2019
The People's Bank of China allowed its currency to fall below 7 Yuan to the US Dollar for the first time in 11 years after the US announced last week that it would slap a 10 percent tariff on USD300 billion of Chinese goods. The latest move by Beijing signals its readiness to retaliate against the US by allowing the Yuan currency to depreciate. China may use additional currency depreciation measures as a retaliatory action, and to ease the negative impact of tariffs on the Chinese economy. KResearch views that the Chinese authorities are unlikely to let the Yuan currency significantly weaken, because a drastic change in currency value could adversely affect China’s financial stability and shake investor confidence. ... Read more
17 Jul 2019
China's economic growth in 2Q19 grew at 6.2 percent, the slowest growth rate in 27 years and down from 6.4 percent in 1Q19. Consequently, China’s gross domestic product in 1H19 rose only 6.3 percent. The slump is a result of a fall in the global and domestic demands. Moreover, the prolonged trade war between the US and China has increased the downward pressure on the Chinese economy. China's exports shrank 1 percent YoY in 2Q19 versus a growth of 1.3 percent YOY in 1Q19. The drop in Chinese exports has taken a toll on China’s industrial sector. China’s Caixin/Markit manufacturing Purchasing Managers’ Index for June declined to 49.4. The reading below 50 signals contraction in China’s manufacturing activity. Moreover, China experienced weaker domestic demand as imports continued to drop to minus growth of 4.1 percent in 2Q19, even though the Chinese government is trying to use various measures to stimulate the economy such as cuts in value added and import taxes and an increase in the government spending budget in infrastructure projects to over 2 trillion Yuan (USD297 billion). However, China’s economy is still losing steam. This shows that these measures may not be enough to boost the economy, and they may only help cushion the slump.... 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
25 May 2018
Finally, China and the US have reached a compromise to ease trade tensions. Recently, Beijing announced that it will cut tariffs on imported passenger cars from 25 to 15 percent and auto parts from 10 to 6 percent, effective July 1, 2018. Looking forward, China is set to announce a string of measures, starting from the latest tariff cuts on American goods to other areas as follows... Read more
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