| China economy - weekly wrap up | |
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| Apr 25, 2009 07:27 |   |
 | China Economic Scan Weekly Economic Review – 24 April 2009 In the past week some high profile estimates of 2009 GDP growth surfaced, ranging from 7% to 8.3% for China. Meanwhile bank regulators said bad loans had fallen and held industry discussions on loan growth. Unemployment data came in only slightly weaker, and a report confirmed that corporate earnings had slipped in 2008. The Chinese Academy of Social Sciences (CASS) announced forecasts for Chinese economic growth in 2009 of 8.3%. Wang Tongsan, Director at CASS, said "Basically, the target of GDP growth of 8% is achievable, although China's economy is still facing downward pressure,” Elsewhere, Goldman Sachs economists Helen Qiao and Yu Song said China GDP growth might be 8.3% in 2009 (higher than an earlier estimate of 6%). “Policy makers in China have been pushing the envelope on policy easing in only one direction -- for more and more,” they said. “In the next three quarters, we expect domestic demand growth to further strengthen, bolstered by loose financial conditions and continued policy stimulus.” Other Investment Bank forecasts for 2009 GDP growth included: Barclays Capital 7.2% (previously estimated 6.7%); UBS 7.5% (previously estimated 6.5%); Royal Bank of Scotland 7% (previously estimated 5%); CLSA Asia-Pacific Markets 7% (previously estimated 5.5%); and Merrill Lynch 8%. In March China's bad loans fell to 2.04% of total credits. “I’m being responsible when I say that we will continue to see declines in both the outstanding bad loans and the ratio of non-performing loans,” said the China Banking Regulatory Commission Chairman, Liu Mingkang. Chinese banks had 549.5 billion yuan (about US$80 billion) in non-performing loans as of March; down by 10.7 billion yuan from the beginning of 2009. The People's Bank of China met with officials from the top 5 commercial banks to discuss the next steps in the country's credit management policy; "The central bank will not control the scale of credit extended by commercial banks, but we do hope that banks can lend loans more steadily and rationally in the coming three quarters," said Yi Gang, vice governor of the central bank. New loans in the first quarter totaled 4.58 trillion yuan ($671 billion). The State-owned Assets Supervision and Administration Commission (SASAC), is working with the Finance Ministry of China to launch an agency to restructure and consolidate SOEs. The Central Huijin-like fund is expected to have at least 50 billion yuan ($7.3 billion) of capital and to be directly led by SASAC, and will likely team up with Chinese private equity funds for investments it makes e.g. CITIC, CIC etc. China's unemployment rate rose to 4.3% in Q1 2009 (versus the 2008 year-end figure of 4.2%) according to Yin Chengji of the Ministry of Human Resources and Social Security. see the rest here: http://www.chinaeconomicscan.com/ |
| Apr 26, 2009 06:22 | #1 |
| There is some light around. The export of Japan is showing signs of growth. Business to China is going up again. The IMF estimates 0,5 percent growth to Japan 2010. In the US, after a long time some good news: Ford don´t need government dollars. Europe, there may be a bank crisis ahead. The depression have not affected yet, but if there will be growing unemployment, house loans may blow into hands. Perhaps China will survive quickly and save the world, otherwise there may be a black autumn coming. Carlos |
| May 1, 2009 14:58 | #2 |
| China Economic Scan Weekly Economic Review – 1 May 2009 1/05/2009. Source: China Economic Scan. Callum Thomas, Managing Director, China Economic Scan In the past week SASAC revealed SOE profits dropped 42%, and the government announced it would spend an additional 70 billion yuan of its 4 trillion yuan stimulus package. Internationally, China and Taiwan finished talks productively and positively, and China signed a free trade deal with Peru after a year of negotiations. The Chinese government announced it is preparing to spend an additional 70 billion yuan ($10.3 billion), mostly on infrastructure projects. The spending will be the 3rd installment of the 4 trillion yuan ($586 billion) package, which was announced in November. The central government has so far spent 230 billion yuan ($33.8 billion) of the package: 100 billion yuan ($14.6 billion) in Q4 08 and 130 billion yuan ($19 billion) in Q1 09. The 138 SOEs directly controlled by the central government, reported profits of 119.49 billion yuan in the first quarter, down 41.8% year on year, on sales revenue of 2.36 trillion yuan, down 9.1% year on year, according to the State-owned Assets Supervision and Administration Commission (SASAC). The profit for March was 62.29 billion yuan, up 85.7% from February, on sales of 935.54 billion yuan, up 26.8% versus Feb. In 2008, SOEs recorded the first annual decline since 2002, falling more than 30% year on year to 665.29 billion yuan. Internationally, talks last Sunday between the Association for Relations Across the Taiwan Straits (ARATS) and the Straits Exchange Foundation (SEF) resulted in an initiative that will see Chinese mainland companies being allowed to invest in Taiwan for the first time in 60 years. Another initiative involves setting up a regulatory framework for financial services firms to operate in both markets. Including gradually setting up a clearing system for the Taiwan dollar and the yuan. "This will drive new investment in the domestic market and bring strong interest from foreigners as well," Standard Chartered economist Tony Phoo was quoted as saying. A few days following this development, China Mobile said it would buy a 12% stake in Taiwan's Far EasTone for $529 million; one of the biggest investments by a Chinese firm in Taiwan. Chinese Vice President Xi Jinping and his Peruvian counterpart Luis Giampietri Rojas witnessed the signing of a free trade agreement (FTA) between China and Peru, after a year in the making. "The pact covers a wide range of fields and features a high-degree of openness," said Zhu Hong, deputy director general of the International Department of China's Ministry of Commerce. The FTA includes opening service sectors and offering favourable treatment of each other’s investors. Trade between the 2 countries reached $7.5 billion in 2008. see the rest here: http://www.chinaeconomicscan.com/ |
| May 1, 2009 15:01 | #3 |
| I agree Carlos, there are some positive signs in China, very strong stock markets, some corporates profits are up, gdp growth although slower is still positive... i think the govt spending is having a good impact |
| May 8, 2009 20:05 | #4 |
| GUEST02110 | China Economic Scan Weekly Economic Review – 8 May 2009 8/05/2009. Source: China Economic Scan. Callum Thomas, Managing Director, China Economic Scan In the past week the major economic developments in China included comments on monetary policy by the PBOC, stats showing the CLSA PMI rising above 50 in April, estimates that new lending in April was over 600 billion yuan, and revelation that China passed the US as the top ranked trading partner with Brazil. The Central bank of China indicated that it would follow a moderately loose monetary policy, reducing speculation of a normalization of monetary policy. A People's Bank of China (PBOC) report said. "The central bank will continue to ensure ample liquidity in the banking system and reasonably increase loans to fund the economy," Tao Dong, chief Asia economist at Credit Suisse, Hong Kong, said "The PBOC is likely to maintain the one-year lending rate at 5.31% this year and raise it by 99 basis points only next year." On a related note, the figure for China's new bank lending in April is likely to come in above 600 billion yuan ($87.8 billion). New loans in March totaled 1.9 trillion yuan ($220 billion), and new lending in the first quarter was 4.58 trillion yuan ($670.6 billion). "Clearly, new lending in the rest of the year at the same pace ... or half as fast ... as in the first quarter would be unthinkable and too fast," UBS economist Tao Wang said. The Chinese yuan rose 0.16% in April, its best month this year, following a 0.09% advance in March. China allows the yuan to trade a limit of 0.5% against the dollar, on either side of the central parity rate. The yuan has traded to as much as 6.82 against the USD, and was 6.8221 at the time of writing. The CLSA Purchasing Managers' Index (PMI) rose to a nine-month high of 50.1 in April from 44.8 in March. It was the first time since July 2008 that the PMI has been above 50 (indicating expansion). "China's government has been extremely successful in stimulating investment and, combined with a sharp improvement in export orders, this has pushed the PMI back into positive territory in April," said Eric Fishwick, head of economic research at CLSA. Cargo throughput at the main ports across China was estimated to reach 500 million tonnes in April, down 1.9% year on year according to the Ministry of Transport (MOT). The breakdown was 340 million tonnes as domestic trade, and 160 million tonnes as foreign trade. China replaced the United States to become Brazil’s top-ranked trading partner according to officials. The sum of Brazil's exports and imports with China reached $3.2 billion in April, greater than the $2.8 billion in its trade with the U.S. According to Brazil's official statistics, bilateral trade volume between Brazil and China reached $36.44 billion in 2008, increasing 55.9% from 2007. Brazil's export volume to China was up 50.8% to $16.4 billion, and import volume.... http://www.chinaeconomicscan.com/ |
| May 16, 2009 08:12 | #5 |
| GUEST02110 | China Economic Scan Weekly Economic Review - 15 May 2009 15/05/2009. Source: China Economic Scan. Callum Thomas, Managing Director, China Economic Scan In the past week a number of key indicators of economic activity came out, painting a positive picture for economic growth in China, but CPI and PPI stats showed prices continued to fall. Among those data released were output, retail sales, food exports, and urban fixed-asset investment. China's consumer price index (CPI), fell 1.5% year on year in April 2009, according to the National Bureau of Statistics (NBS). Food prices (comprising a 3rd of CPI) dropped 1.3%, dragged down by a 28.6% decline in pork prices as demand plummeted on pig flu fears. Non-food prices fell 1.5%. The index was down 0.2% since March, and the YTD fell 0.8% from the same period last year. China's producer price index (PPI), a major measure of inflation at the wholesale level, also fell 6.6% in April year on year, according to the NBS. The decline compared with a 6.0% year on year drop in March and 4.6% in Q1 2009. Prices of production materials fell 8.1% in April year on year, the NBS said, and PPI for January-April fell 5.1% over the same period last year. Meanwhile, China’s output rose 7.3% from a year earlier, according to the NBS, after gaining 8.3% in March, and less than analyst estimates of 8.6%. In another positive sign, retail sales grew 14.8%, above estimates of 14.5% (and 14.7% in March). The data adds to evidence that a 4 trillion yuan ($586 billion) stimulus plan is buoying domestic growth, while the global recession takes a toll on exports and related industries. On a similar note, Morgan Stanley raised its forecast for China economic growth to 7-8% from 5% for 2009. Morgan Stanley Asia Chairman Stephen Roach said growth could fall back to 5.5 to 7% in 2010, as external demand will remain weak. "It's premature to say China is enjoying a V-shaped recovery. I think the outcome is going to be closer to the letter W." he said. New orders placed with China’s shipyards fell 95% during the first four months of this year, the Ministry of Industry and Information Technology said. Orders from January to April dropped to 990,000 deadweight tons. While new orders last month reached 200,000 deadweight tons, taking total order books to 195 million deadweight tons at the end of April - 7% higher than a year earlier. Another key indicator, China’s urban fixed-asset investment, climbed 30.5% in the first four months from a year earlier compared with a 28.6% increase in the first three months and analyst estimates of 29.1%. “Fixed-asset investment is the most important driver for economic growth this year,” said Sun Mingchun, chief China economist at Nomura Holdings. China's food exports reached US$2.62 billion in March 2009, up 8.9% from a year earlier, presenting the first year-on-year growth in the last five months, said General Administration of Customs (GAC). Exports of fruit led ... |
| May 23, 2009 22:50 | #6 |
| GUEST21855 | China Economic Scan Weekly Economic Review - 22 May 2009 22/05/2009. Source: China Economic Scan. Callum Thomas, Managing Director, China Economic Scan During the past week a number of commentators highlighted issues in the Chinese economy, including interest rate movements and foreign trade. There were also some data releases such as SOE revenue, foreign financial asset holdings, and Hong Kong GDP figures. Former Chinese ambassador to Brazil, Chen Duqing, said that the two countries have huge potential to expand trade. Bilateral trade rose 63.2% year on year to $48.98 billion in 2008, according to data released by the General Administration of Customs. Brazil imported $268 million worth of farm produce from China, up 125.2% year on year. China imported vegetable oil, cotton and fruit worth $8.79 billion from Brazil last year, an increase of 82.4% from a year ago. China's foreign financial assets rose 23% in 2008 to reach a total of $2.92 trillion, the State Administration of Foreign Exchange (SAFE) said. Of that amount, nearly $2 trillion, or 67%, were foreign exchange and gold reserves. Outbound direct investment, however, was just $169.4 billion, accounting for 6% of the total foreign financial assets. London based economist Mark Williams said the deflation in China means that “real rates have risen sharply,” and that “If the recovery disappoints, further interest-rate cuts could resume from the middle of the year.” The key one-year lending rate is 5.31% after 5 cuts in the final 4 months of last year. Williams predicts 81 basis points of cuts in lending and deposit rates by the end of 2009 on the back of falling CPI. Operating revenues of China's state-owned enterprises (SOEs) fell 7.3% year on year to 5.97 trillion yuan (854 billion U.S. dollars) in the first 4 months of 2009, the Ministry of Finance said. Profits of the 115,000 SOEs totaled 323.64 billion yuan in the first 4 months, down 32.3% from a year earlier. The fall was 4.5 percentage points lower than that of the 1st quarter. China's Ministry of Land and Resources announced a 30% cut in the minimum purchase price of industrial land to boost investment. The national average industrial land price was 721 yuan per square meter in Q1 2009, down 1.08% from Q4 2008, and down 1.1% year on year. Land prices in China ranged from 60 yuan ($8.77) per square meter in northwestern Xinjiang Uygur, to 840 yuan per square meter in Shanghai. Hong Kong's GDP for Q1 2009 fell 7.8% after a 2.6% drop Q4 2008. GDP for 2009 as a whole is now forecast to contract by 5.5 to 6.5% in real terms, down from the forecast decline of 2 to 3% earlier put out in the government budget. However there are positive signs e.g. a pick-up in the mainland economy and global stock markets. While on the downside is a sharp plunge in global demand and a fall-off in intra-regional exports. http://www.chinaeconomicscan.com/ |
| May 31, 2009 09:13 | #7 |
| GUEST21855 | China Economic Scan Weekly Economic Review - 31 May 2009 31/05/2009. Source: China Economic Scan. Callum Thomas, Managing Director, China Economic Scan In the week that was, the Chinese government revealed more statistics about spending of the stimulus package, and encouraged its local governments to match spending. Elsewhere growth forecasts were raised, energy prices were touted to increase and signs of gold fever stirred. China's central government has allocated 270 billion yuan (US$39.7 billion) for infrastructure investment so far this year, according to the National Development and Reform Commission (NDRC). The spending is part of a planned total of 367.6 billion yuan in the 2009 central budget and brings the total already allocated since Q4 2008 to 300 billion yuan. China has urged its local governments to cough up funds so that projects in its 4-trillion-yuan ($586 billion) stimulus plan can be completed on time. Estimates are that local governments will need to raise 170 billion yuan to match the central government's first two batches of investment of 230 billion yuan. Previously a National Audit Office report found that "only 48% of the funds local governments had to contribute for 335 projects are in place". That said, China’s growth prospects have apparently improved from three months ago, this is in spite of drops in steel and electricity output and the risk of a manufacturing contraction this month. The world’s third-largest economy will expand 7.5% this year, according to a median estimate of 14 economists surveyed by Bloomberg News, up from an earlier forecast of 7.1% in February this year. Internationally, China is looking to increase investment from multinational corporations, Vice Premier Li Keqiang said. "We continue our opening-up policy and oppose trade protectionism in any form," Li told visiting GE Chairman and Chief Executive Officer Jeff Immelt, saying that China offered opportunities for multinationals to expand their business and investment. Li said the government is trying to foster the development of high-tech and strategic emerging industries. China, the world’s second-biggest energy user, may raise gasoline and diesel prices by about 10% by next weekend. “We believe China is forced into a corner” and will raise prices “as soon as this weekend, and if not, very likely by next weekend following OPEC’s strong resolve to support higher oil prices,” said Gordon Kwan, the head of energy research at Mirae Asset Securities in Hong Kong. In signs of gold fever hitting China, gold prices quoted on the Shanghai Gold Exchange (SGE) increased by an average 6.74% in the past month to the current level of about 209 yuan a gram. http://www.chinaeconomicscan.com/ |
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