Readings and Current Events
US-China Relations
Xi-Biden talk: Assurances, clearer line on Taiwan, a new framework (Beijing Channel)
On the heels of the Xi-Biden talks, Beijing Channel reached out to multiple authoritative U.S. hands in China to get their takes.
The experts expressed unanimous optimism regarding the outcome of the talks, saying readouts from both sides offered sufficient evidence that both leaders reached a broad consensus that expanded beyond previous talks over the phone or video.
Key points made by experts:
▪ Both sides were giving each other more strategic assurances, which bode well for the stability of the bilateral relationships.
▪ Both sides suggested likely talks on setting an overarching framework for bilateral relationships.
▪ Clearer red line is drawn on the Taiwan question.
China Economy
Goldman sees China's real GDP growth rising to 4.5% in 2023 (Reuters)
China is likely to post real gross domestic growth (GDP) of 4.5% next year, largely due to the country's gradual exit from its zero-COVID policy that could lead to a rise in consumption, Goldman Sachs wrote in a research note on Thursday.
China is battling coronavirus outbreaks in numerous major cities, including the capital Beijing, while it takes steps to try to ease the burden of its strict zero-COVID policy, which has caused severe economic damage and widespread frustration nearly three years into the pandemic.
Only a revived economy can save China’s property industry (The Economist)
In an aggressive attempt to cure these maladies, China’s policymakers have created several others. The flow of finance to property developers has slowed abruptly since the government imposed limits on their borrowing in 2020, forcing dozens into default. This has reduced the pace of construction for flats, many of which were sold in advance. And these delays have in turn contributed to a sharp slowdown in property sales, especially among people who now doubt that they will receive any flat they might purchase.
On November 11th China’s central bank and banking regulator issued a plan to tackle some of these problems. They will encourage commercial banks to help finance stalled homebuilding projects, alongside state-directed “policy banks”. They will temporarily suspend limits on banks’ exposure to real estate and urge them to extend the maturities of loans which are due in the next six months. And regulators will guarantee new bonds issued by developers they consider viable, including private-sector firms.
Guangzhou to build 250,000 quarantine beds as China COVID cases rise (Reuters)
The southern Chinese city of Guangzhou is setting up makeshift hospitals and quarantine sites with capacity for nearly 250,000 beds for COVID-19 infections, officials said on Thursday, as cases across the country hit their highest level since April.
China is battling coronavirus outbreaks in numerous major cities, including Chongqing and the capital Beijing, while it takes steps to try to ease the burden of its strict zero-COVID policy, which has caused severe economic damage and widespread frustration nearly three years into the pandemic.
Alibaba’s Revenue Misses Forecasts as China’s Covid Policy Weighs (Wall Street Journal)
Chinese e-commerce company Alibaba Group Holding Ltd. BABA 7.70%increase; green up pointing triangle reported one of its weakest revenue expansions since going public, underscoring the persisting weight of Beijing’s zero-Covid policy on domestic consumption and business activities.
The Hangzhou-based company said Thursday that its July-September quarter revenue rose 3% from the same period year earlier, marking a return to growth from the slim dip in the previous quarter when widespread pandemic lockdowns disrupted supply chains and logistics.
Sales were $29.1 billion, missing the average forecast by analysts polled by S&P Global Market Intelligence.
China Asks Banks to Report on Liquidity After Bond Slump (Bloomberg)
Chinese regulators asked banks to report on their ability to meet short-term obligations after a rapid selloff in bonds triggered a flood of investor withdrawals from fixed-income products, according to people familiar with the matter.
The unscheduled regulatory queries coincided with the biggest decline in China’s short-term government bonds since mid-2020. The slump -- spurred by a shift toward riskier assets including stocks -- prompted retail investors to pull money from wealth-management products, fueling a spiral of price declines and accelerating withdrawals. Losses also spread to top-rated corporate bonds, stoking a record surge in yields this week.
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