Tag: Chinese economy

China’s Economy Grew More Than Expected Over the Summer

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China’s economy grew more than expected over the summer, as the government offset some of the harm from a real estate crisis by pouring money into infrastructure construction projects, like building rail lines. Data released on Wednesday showed that gross domestic product grew from July through September compared with the prior three months. Industrial production of everything from chemicals to steel began to stabilize as the government built more roads, sewage lines and other public works. China’s economy, the world’s second largest, has struggled since the spring, as housing sales…

Former Bank of China boss arrested on corruption charges

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China has arrested the former head of one of the country’s largest commercial banks on charges of accepting bribes and illegally granting loans, amid a two-year anti-corruption drive targeting the financial sector. China’s Central Commission for Discipline Inspection (CCDI), which is investigating corruption within the ruling Communist party, said on Monday that Liu Liange had been arrested, after announcing the start of the investigation in March. President Xi Jinping has made fighting corruption a key part of his political project as he has cemented his position as paramount leader. A…

In China Businesses Cut Prices as Consumers Spend Less

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To understand today’s penny-pinching Chinese consumers, behold the vicious price war playing out among the country’s coffee store giants. Luckin Coffee, a popular Chinese chain, rose to prominence and opened 10,800 stores by successfully undercutting Starbucks’s prices. But now, Cotti Coffee, an upstart rival started by the same two people who founded Luckin, is undercutting Luckin’s prices. Cotti has opened stores near Luckin shops, and it is charging — in some cases — 1 yuan, or 15 cents, less than its rival for the same drink. Earlier this year, Cotti…

China’s Country Garden warns it could default on debt

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China’s largest private developer has warned it could default on its international debts, dealing another blow to the country’s embattled property industry. Country Garden has about $200bn (£163bn) in liabilities and nearly $11bn in dollar-denominated offshore bonds. It has not defaulted so far, but has missed coupon payments on some dollar bonds since last month and faces the end of 30-day grace periods for making payments from next week. It said in a statement to the Hong Kong stock exchange the company said that it “expects that it will not…

Beijing’s mixed messages leave businesses ‘questioning’ investments in China

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In July 2021, Chinese markets braced for a buzz. Syngenta, the Swiss agritech giant, filed for a $10bn-dollar listing on Shanghai’s STAR Market, a tech-focused stock exchange. It should have been a win-win for China; Syngenta said it would invest some of the new financing into agricultural technology, promising an injection of cash into an important sector. But, more than two years later, Syngenta still hasn’t listed. Beijing insists that China is open for business and that it is committed to supporting the private sector. But a renewed focus on…

How China’s Property Crisis Is Testing Its Too-Big-to-Fail Banks

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China’s giant banking system, the world’s largest, is heavily exposed to the real estate crisis: Nearly 40 percent of all bank loans are related to property. And pressure is building on those banks as dozens of real estate developers have defaulted or missed payments on overseas bonds, led by China Evergrande, the world’s most indebted developer. The scale of China’s property problems — enormous levels of debt, an oversupply of apartments and consumers increasingly wary of buying — means the government could be forced in the coming years to spend…

Hong Kong Says It Calls the Shots, Not Beijing. Investors Are Wary.

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Isolated from the world and pulled closer into Beijing’s orbit over the past three years, Hong Kong is finding that its fortunes are tied more than ever to China. The city’s stock market, which is seen as a proxy for China’s economy, is among the world’s worst performing this year. The rivers of money that flowed into companies, minting new wealth, have slowed to a trickle. And there is the gnawing feeling that the once-vibrant international city that staked its reputation on being separate from China has itself become more…

Peak China? Jobs, local services and welfare strain under economy’s structural faults

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When finding a job feels as unlikely as winning the lottery, playing the actual lottery may seem like a more productive use of time. In the first half of 2023, faced with a struggling economy, Chinese consumers spent 273.9bn yuan ($37bn/£30bn) on lottery tickets, an increase of more than 50% on the same period in 2022. It’s just the latest symptom of an economy in distress. A record high youth unemployment rate of 21.3% in June prompted the government to stop publishing data on the issue – along with other…

What Retail Sales and Other Data Say About China’s Economy

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China’s trains, planes, stores and beaches were a little fuller last month than a year ago, and the pace of activity picked up at factories, particularly those making mobile phones and semiconductors. A batch of numbers released on Friday by China’s National Bureau of Statistics showed a modest improvement in the country’s overall retail sales and industrial production during August. A series of small steps taken by the government over the summer, including two rounds of interest rate cuts, seems to be yielding a slightly better-than-expected improvement in the country’s…

People’s Bank of China Cuts Reserve Requirement to Spur Bank Lending

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China’s central bank announced a policy change on Thursday that will allow the country’s banks to lend more money, but a nationwide economic slowdown has left many companies and households wary of borrowing. The move is the latest in a series of economic stimulus measures by the Chinese government as growth has failed to rebound strongly this year as many expected after nearly three years of stringent pandemic-control regulations. Other measures taken to strengthen borrowing and spending have included government-guided interest rate cuts in June and a round of rate…