Chinese leaders who have been predicting an end to the country’s deflation would have been heartened by official statistics this week showing consumer prices had increased for the first time in six months. The news came as the ruling Communist party used its annual gathering in Beijing to declare the economy would clock up growth of “around 5%” in 2024. However in his speech, Premier Li Qiang warned dutiful delegates they “should not lose sight of worst-case scenarios and should be well prepared for all risks and challenges”. And little…
Tag: Chinese economy
Embattled China property giant Country Garden faces liquidation petition
Country Garden Holdings has said a liquidation petition has been filed against the property developer for non-payment of a loan worth $205m, adding to the woes for China’s liquidity crisis-hit property sector. Country Garden said in a regulatory filing to the Hong Kong Stock Exchange it would “resolutely” oppose the petition, which was filed by a creditor, Ever Credit Limited, a unit of Kingboard Holdings. A court hearing has been set for 17 May. Country Garden’s shares fell more than 12% in early trading on Wednesday. The petition is set…
‘It’s legalised robbery’: anger grows at China’s struggling shadow banks
Wang Jin felt sure that he could invest in Sichuan Trust, an institution that was part of one of what he describes as the “four pillars” of China’s financial system: banks, securities, insurance and trusts. Promised a return on his investment of 8.3%, he handed over 1.6m yuan (£178,000) in 2019. “The trust had a state licence, so we believed in its integrity,” Wang (not his real name) recalls. Unluckily for him, in May 2020, the company said that it would be unable to repay 20bn yuan of investments. Protests…
China holds citizen on spying charges after she did ‘admin’ work for US company
China has detained one of its citizens on spying charges after she did some work for a US company, in a case that experts say highlights the potential risks of working for foreign businesses in the country. Emily Chen, 50, disappeared after flying into Nanjing Lukou international airport in December on a visit from Doha, where she lives. According to her husband, US citizen Mark Lent, Chen messaged her family to say that she had landed but she then did not emerge from the airport. Four days later, her son…
China has seen a fourth month of falling prices, but will it act to curb deflation?
China’s economy has gone from bad to worse – and it is only February. Figures released on Thursday showed consumer prices fell by 0.8% in January compared with a year earlier, outstripping economists’ expectations and marking the biggest contraction in 15 years. Prices in China have been flat or falling nearly continuously since July. Although the country’s zero-Covid policy was abandoned more than a year ago, consumers are still cautious about spending, both on everyday goods and on property, which has traditionally been the driver of growth in China’s gross…
China consumer prices plunge at fastest rate for 15 years as deflation fears deepen
China’s consumer prices fell at their fastest pace in 15 years in January, as the world’s second-largest economy sank deeper into deflation amid weakening demand. Data released on Thursday showed that China’s consumer price index tumbled last month, falling by 0.8% compared with a year earlier. It marks the fourth consecutive month of declines, as well as the sharpest drop since September 2009, when the global economy was still grappling with aftershocks from the 2008 banking crisis. Food prices were the biggest drag on the headline inflation figure, having fallen…
Snookered by China? Masters tournament owner plots Asia expansion
The owner of the Masters snooker tournament is plotting an expansion trail across Asia after the pandemic exposed the company’s reliance on China, its chair has said. Steve Dawson, who chairs World Snooker, said it was considering staging tournaments in India, Pakistan, Malaysia and Thailand, after its business was held back by three years of Beijing-imposed Covid lockdowns. He also hopes young players in the sport can take inspiration from 16-year-old Luke Littler’s astonishing run to the PDC World Darts Championship final, which is also run by World Snooker’s owner…
China’s many systemic problems dominate its outlook for 2024 | George Magnus
There were contrasting reactions when the US rating agency Moody’s downgraded China’s A1 credit rating outlook from stable to negative last month. Financial markets, focused on the economy, paid it barely any attention. Chinese state media, looking at the politics, saw red. Global Times called it “biased and unprofessional”. A few days later, the Ministry of State Security issued a statement stipulating that the only purpose of “negative talk” was to doubt or deny China’s socialist system, and to contain its development. The Chinese Communist party’s prickly attitude to criticism…
China cracks down on negativity over economy in bid to boost confidence
China is cracking down on negative commentary about the financial market and other sectors as the authorities seek to boost public confidence despite challenging economic headwinds. This month the Weibo account Weibo Finance, which has more than 1.5 million followers, issued an instruction against posting any comments “that bad-mouth the economy”. The post appears to have since been deleted. Bloomberg reported that several other finance influencers had been told by Weibo to “avoid crossing red lines” and to post less about the economy. Weibo did not reply to a request…
EU expected to issue veiled warning to China over supply of cut-cost goods
The EU is to tell China that its €400bn (£343bn) trade deficit is not sustainable long term amid fears that it will flood the bloc with subsidised electric cars, solar panels and medical devices, threatening European manufacturing and jobs. Ursula von der Leyen, the European Commission chief, and Charles Michel, the European Council president, will meet Xi Jinping at a summit on Thursday, the second of its kind this year. They are expected to issue the Chinese president with a veiled warning that unless China does something about the supply…