Readings and Current Events
China Economy
China’s No 1 priority is still GDP growth, senior economic official asserts, amid focus on ‘common prosperity’ (South China Morning Post)
China needs to regard development as the No 1 priority and ensure a “reasonable growth” of the national economy in a persistent way, a senior economic official said, outlining goals for the next five years.
The comments from Han Wenxiu, deputy director at the General Office of the Central Economic and Financial Affairs Commission, come amid market worries that China’s emphasis on high-quality development and common prosperity could sideline the decades-old priority for growth, with the current slowdown feared to jeopardise the development trajectory.
Han, 59, is expected to rise to a prominent role in the next government line-up to be revealed when the national legislature convenes next spring.
His explanation indicated that regardless of domestic and external headwinds, the world’s second-largest economy will continue to highlight gross domestic product (GDP) growth in the first year of President Xi Jinping’s third five-year term.
China’s exports unexpectedly shrink in October, badly missing expectations for growth (CNBC)
China’s exports unexpectedly fell in October, with a drop in the value of goods sold to the U.S. and EU, according Chinese customs data released Monday.
China’s exports fell by 0.3% in October from a year ago in U.S.-dollar terms, missing Reuters expectations for a 4.3% increase.
The drop marked a sharp decline from a 5.7% year-on-year increase in September, and the first year-on-year drop since May 2020, according to Refinitiv Eikon data
Chinese exports fall for first time since 2020 (Financial Times)
President Xi pledges to further open China’s markets, offering ‘big opportunities’ to the world ahead of trade fare (South China Morning Post)
China’s president has pledged to open the country’s markets further as he reaffirmed his commitment to globalisation ahead of the world’s largest import trade fair, in Shanghai.
“We have been offering big opportunities for the world economy by opening up China’s huge market,” Xi said in a televised speech to kick off the fifth edition of the China International Import Expo (CIIE), the government’s tentpole annual event for promoting a consumption-led economic development model.
“The opening [of markets] will brighten the future of economic development globally.”
China's current account surplus up 56 % in first 3 quarters (China Daily)
China's current account surplus stood at a record $310.4 billion in the first three quarters of 2022, up 56 percent year on year, official data showed Friday.
The ratio of the current account surplus against the gross domestic product of the same period was 2.4 percent, which is within a reasonable and balanced range, said the State Administration of Foreign Exchange.
Of the total, the surplus under trade in goods increased 37 percent year on year to hit a record $521.6 billion, while the deficit under trade in services narrowed by 23 percent, the data showed.
Direct investment logged a net inflow of $46.9 billion, according to the administration.
The Chinese economy retains its robustness, huge potential and sound long-term fundamentals, and its recovery is gaining ground, which will help underpin the country's balance of payments, said Wang Chunying, deputy head of the administration.
China Markets Set for More Volatility as Covid-Zero Stays (Bloomberg)
The yuan dropped at the start of what may be another volatile week for Chinese markets after health officials vowed to “unswervingly” stick to a Covid Zero approach, damping optimism that Beijing was working toward easing restrictions.
The offshore yuan dropped 0.8% to 7.24 per dollar, unwinding some of Friday’s 2% surge. The Australian dollar -- a China-risk proxy -- fell over 1%, while the greenback advanced on haven demand.
Assets from equities to oil rallied last week on conviction China would take concrete steps toward reopening. The Hang Seng China Enterprises Index had its best weekly gain since 2015, Brent crude closed at the highest in two months.
PBOC Chief Hopes for ‘Soft Landing’ for China’s Housing Market (Caixin)
Sales and lending in China’s property sector have seen marginal improvement recently, the country’s central bank chief said at a Hong Kong summit on Wednesday, as he sought to address worries about a prolonged real estate crisis that has plagued the world’s second-largest economy.
“With ongoing urbanization in China, we hope the housing market can achieve a ‘soft landing,’” People’s Bank of China (PBOC) Governor Yi Gang said in an interview conducted by Hong Kong Monetary Authority Chief Executive Eddie Yue, which was pre-recorded and broadcast at the Global Financial Leaders’ Investment Summit.
US-China Relations
Why US moves to contain China’s rise are having the opposite effect in Asia (South China Morning Post)
The gloves are coming off in the US-China chip war as Washington announces sweeping trade and investment restrictions on semiconductors. There will be no winners and many losers in this bid for technological, economic and strategic supremacy between the world’s biggest economic powers.
There is far more at stake than just chips as the two economic giants enter their monumental struggle. For example, the International Monetary Fund (IMF) has noted that, “given its strong trade and supply chain links, Asia has a lot to lose in the event of fragmentation where the world divides into separate trading blocs”.
China Semiconductors
China’s chip imports see biggest drop in 2022 with accelerated decline in October amid US restrictions and weak demand (South China Morning Post)
China’s chip imports shrank by more than 13 per cent this year through October, according to Chinese customs data, as an escalating tech war with the US and economic slowdown weighed on the world’s biggest semiconductor market.
For the first 10 months of the year, China imported 458 billion integrated circuits (IC), a 13.2 per cent decline from the 527.9 billion units imported in the same period last year, according to data released by the General Administration of Customs on Monday. It marked an accelerated decline from the first nine months, when imports were down 12.8 per cent.
The reduced volume is also a reversal over 2021, when IC imports jumped 21.3 per cent year on year in the same 10-month period.
China Internal Politics
Xi vowed "political, diplomatic, economic, & law" countermeasures against "long-arm," but few noticed (Pekingnology)
Photo by Marek Piwnicki on Unsplash