China

World economy, World politics 24th May 2023

China-Russia trade ties enhanced in response to Western sanctions

Alicia García herrero (Natixis) | During the past fifteen months after the outbreak of the Ukraine war, China and Russia’s trade value increased by 36.5% compared to pre-war levels, showing their much-enhanced ties in merchandise trade. Meanwhile, in addition to the upswing of the headline amount, some new patterns in their trade structure are also worth watching. For example, Russia has moved up rapidly in the rank of China’s external…

In the World 17th May 2023

China: industrial production and retail sales up 5.6% and 18.4% in April, respectively

Banca March: Activity accelerates in China, but at a slower pace than expected. The April set of activity indicators showed a rebound in growth, as industrial production accelerated to 5.6% while retail sales advanced 18.4%. Although these data are very positive and confirm that the reopening of the economy is boosting activity, they fell short of expectations (10.9% and 21% respectively). On the consumer spending side, the best performing components…

World economy, World politics 16th May 2023

China and the US might not be decoupling but their technologies are bifurcating

Alicia García Herrero (Natixis) | The strategic competition between the US and China started in early 2018 when the Trump administration implemented untargeted import tariffs and reoriented most of its trade efforts towards widening the technology gap between China and the US with a special focus on deep tech, such as semiconductors. The Biden administration has pushed even further in that direction. However, one should not forget that well before…

In the World, World economy 19th April 2023

China GDP expands 4.5% year-on-year in 1Q2023, largest increase since 1Q2022

Link Securities | China’s Gross Domestic Product (GDP) expanded by 4.5% year-on-year in 1Q2023, beating FactSet’s analyst consensus reading of 3.4%, and following a 2.9% rise in the previous quarter. The reading represents its largest increase since 1Q2022, amid the government’s post-pandemic economic recovery momentum, although the growth is somewhat lower than the government’s forecast of 5% growth for the year as a whole. Meanwhile, China’s industrial production rose by…

World economy, World politics 12th April 2023

Will Lula find his El Dorado in China?

Alicia García Herrero (Natixis) | Brazilian President Luiz Inácio Lula da Silva is currently in Beijing with a huge official and business delegation. His goals are clear: first and foremost, bringing growth opportunities to Brazil, whose economy has been battered by the Covid pandemic. Brazilian exports of commodities into China have ballooned since Beijing’s fiscal binge in 2008 that led to pent-up demand for commodities. More recently, Brazil’s large lithium reserves,…

In the World, World economy 11th April 2023

Low CPI in March suggests Chinese economy growing below potential

Bankinter | CPI falls back in March to +0.7% year-on-year from +1.0% and Industrial Prices remain negative at -2.5% year-on-year. This is the lowest CPI reading since September 2021 and Industrial Prices (IPP) since June 2020. The CPI Underlying Rate stands at +0.7% year-on-year from +0.6% previously. Analysis: Consumer and producer price inflation remains at exceptionally low levels in China. CPI has remained below the government’s target of +3% for…

World economy, World politics 11th April 2023

Li Keqiang’s last Two Sessions

Alicia García Herrero (Natixis) | China’s so-called Two Sessions, the country’s most important annual political gathering, marked a transition this year. Held in early March, it included the final work report – or summary of government business – delivered by outgoing Prime Minister, Li Keqiang, who after two five-year terms as China’s prime minister, handed over to Li Qiang. Against this backdrop, Li Keqiang’s 2023 work report was blissfully short,…

In the World, World economy 3rd April 2023

China’s March manufacturing PMI stands at 51.9 (52.6 previous), services PMI rises to 58.2 (56.3 previous)

Link Securities | China’s official advance manufacturing activity index, the manufacturing PMI, came in at 51.9 in March, above the 51.6 expected by the analysts’ consensus, although it was below the 52.6 of the previous month. We recall that a reading above 50 points indicates expansion of activity from the previous month, while a reading below that level indicates contraction of activity. Most components decelerated after February, although production, new…

Relevant News Item 15th March 2023

China reopening already noticeable: industrial production and retail sales up 2.4% and 3.5% in February

Bankinter : Several positive data in China. While Retail Sales (Jan+Feb) improve to +3.5% year-on-year, as expected vs -1.8% previously, Industrial Production (Jan+Feb) improves to +2.4% year-on-year vs +2.6% esp. and +1.3% previously. Also, the Unemployment Rate (Feb) rebounds to 5.6% vs 5.3% esp. and 5.5% previously. Finally, the PBoC injected the largest amount of liquidity since December 2020 via a medium-term credit line. Specifically, it amounted to CNY 281…

In the World, Relevant News Item 13th March 2023

New Chinese Premier Li Qiang believes 5% growth target ‘will not be easy’

Link Securities | In his first press conference after becoming China’s new premier, Li Qiang said it will not be easy for China to reach the 5% growth target, and that it will require redoubled efforts. Li reiterated the specific policies developed last December at the Central Economic and Labour Conference (CEWC) and prioritised stability in growth, prices and employment. In addition, Li said China will coordinate macroeconomic policies by…

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