China Economic News

[greengiraffe]

Chinese consumer sentiment hits 2014 high
FERGUS RYAN NOVEMBER 19, 2014 2:15PM

Chinese consumer sentiment has hit its highest level this year following positive signals in the housing and stock markets and record e-commerce sales figures, according to a private survey.

The ANZ-Roy Morgan China Consumer Confidence report increased 2 points to 157.1 in November, the highest level in 2014 so far.

All five components that make up the survey rose in the month with attitudes towards the long-term economic outlook seeing the biggest increase.

Consumer confidence varied across the country, rising in Shanghai and Guangzhou but falling in the nation’s capital Beijing.

ANZ chief economist for Greater China Li-Gang Liu said the government’s gradual relaxation of its “purchase limit policy” has seen housing transactions start to rebuild. Beijing is expected to further other efforts to stabilise the property market.

“The November survey results suggest that consumer sentiments bode well for a steady rebound of [fourth quarter] GDP growth” he said.

“China’s stock market also outperformed in the past few months due to expectations of reform dividends and the official launch of the Shanghai-Hong Kong stock connect program” he said.

China’s online sales reached another record high on "Singles Day" this year, with e-commerce giant Alibaba setting a new record of RMB 57bn ($US9.3bn) is sales.

Mr Liu said 278 million packages were delivered during the e-commerce shopping extravaganza - one for every five people in China. He said the result suggests Chinese household consumption has great potential to increase over time.

"In addition, the continuous decline in inflation expectation suggests that China has entered a rapid dis-inflation process, indicating that the easing bias in China’s monetary policy will continue over the next year,” he said.

[greengiraffe]

Beijing under pressure to do more to spur growth
MARK MAGNIER AND RICHARD SILK THE WALL STREET JOURNAL NOVEMBER 21, 2014 12:00AM

CHINESE factory activity fell to its lowest level in six months in November, according to one early gauge, increasing pressure on Beijing to do more to spur growth as the world’s second-largest economy continued to weaken in the fourth quarter.

The reading released by HSBC Holdings and data provider Markit showed Chinese factory activity has been flat this month. New exports orders, a rare bright spot in recent months, also weakened, along with employment, although new orders overall showed some improvement.

“We still see uncertainties in the months ahead from the property market and on the export front,” said HSBC economist Hongbin Qu in a research note.

“We think growth still faces significant downward pressures, and more monetary and fiscal easing measures should be deployed.”

The preliminary HSBC China Manufacturing Purchasing Managers Index fell to 50.0 in November, compared with a final reading of 50.4 in October, HSBC and Markit said.

A reading above 50 indicates expansion from the previous month, while a reading below 50 indicates contraction. The manufacturing numbers are the latest in a string of weaker indicators in recent weeks. GDP growth slowed to 7.3 per cent on year in the third quarter, its slowest pace in more than five years, amid weaker credit growth, slower investment growth and a property slump. Moving into the fourth quarter, loan growth in October slowed to 12.9 per cent on year, its lowest growth since 2006, while fixed asset investment grew 15.5 per cent on year from January to October, its lowest since 2001.

Chinese authorities are likely to maintain their targeted fiscal and monetary policy approach, economists say, although pressure is building to take stronger steps, including an interest-rate cut or a reduction in the capital reserves that financial institutions must hold with the central bank.

“They still want to focus on innovative measures. They still want to be creative,” said OCBC economist Dongming Xie. “The chances of cuts are definitely higher, although they’re still quite reluctant.”

Signalling the government’s close watch on sliding growth, Xu Shaoshi, head of the National Development and Reform Commission, China’s main planning body, said in an internal meeting that the economy faces rising downward pressure in 2015.

Also the State Council, China’s cabinet, unveiled several measures aimed at helping smaller companies increase their access to credit, reduce borrowing costs and open access to foreign exchange.

Economists said despite challenges on several fronts,Beijing still has some leeway before it reaches for broadbased stimulus measures — which it fears could increase bad loans and spur overcapacity — so long as employment holds up, an area it has identified as a major priority.

[greengiraffe]

http://www.cnbc.com/id/102202289?trknav=...:topnews:2

Why you shouldn't sweat 5-6% China growth
Nyshka Chandran | @NyshkaC
7 Hours Ago
CNBC.com


Growth in the world's second largest economy could slow to as little as 5 percent in the near-term, but that's no cause for concern, one analyst said.

"We are facing an inevitable deceleration in the Chinese economy. I see 5 to 6 percent per annum growth over the five years commencing January 2016," said Jonathan Pain, author of investment newsletter The Pain Report.

Bearish views on China's economy are not uncommon, with many analysts citing smaller dividends from investment-led growth, but Pain's view boils down to simple arithmetic.

Read MoreChina's factory activity stalls in November
"7.5 percent growth this year in China is equivalent to 12 percent in 2008, because the Chinese economy is 65 percent bigger today than it was then. So, we are going to see some natural deceleration in the headline rate of growth," he told CNBC on Thursday.

The world's second-largest economy grew 7.3 percent on year during the July-September period, its slowest pace in more than five years, jeopardizing Beijing's 7.5 percent target for 2014.

China's economy will grow to $10 trillion next year from around $9.3 trillion currently, Pain said, noting the prospect of 5-6 percent growth in a $10 trillion economy is not alarming.

Read MoreSigns of a floor in China's property market


ChinaFotoPress | Getty Images
Staying optimistic

A sub-6 percent growth rate over the next decade is possible, but it's not inevitable, said Julian Evans-Pritchard, China economist at Capital Economics. While Julian expects gross domestic product (GDP) growth to slow to 6.5 percent by 2016, it could stabilize and even pick up in the future should officials pass structural reforms, he said.

"If you compare China's growth path with other countries of a similar export-driven model such as Korea or Taiwan, it doesn't look out of the ordinary," he said. "The only extraordinary thing in China is how long they've experienced massive growth."

Read MoreChina's rush to green vehicles fuels bubble concerns
"Looking at extrapolations of growth, there are some people who say current rates look quite ridiculous but you have to remember the scale of the economy and how large it is."
What about the headwinds?

Many expect China's labor force could pose downside risks to growth, with Chinese officials repeatedly stressing their tolerance for lower growth as long as employment remains steady.

Despite ample anecdotal evidence of skilled labor shortages, Pain doesn't consider employment a serious challenge if growth decelerates down his envisioned path.

Read MoreNext big thing in government bonds: China?
In fact, according to Citi, China faces a labor shortage. High school and postgraduate degree holders are in relatively high demand, the bank said in a note this month. Undergraduate degree-holders, however, struggle with unemployment.

[cfa]

BEIJING--China cut lending rates for the first time in more than two years, in an acknowledgment that its piecemeal efforts to bolster its flagging growth have failed.

The surprise move by the People's Bank of China on Friday comes amid wide expectations that China could miss its annual growth target of about 7.5%. Growth in investment, factory production, exports and retail sales all slowed in October. The economy grew by 7.3% year-over-year in the third quarter, its slowest pace in more than five years.

http://www.marketwatch.com/story/china-c...beforebell

[greengiraffe]

leakage liao... no wonder regional markets so strong on a Friday...

BEIJING--China cut lending rates for the first time in more than two years, in an acknowledgment that its piecemeal efforts to bolster its flagging growth have failed.

The surprise move by the People's Bank of China on Friday comes amid wide expectations that China could miss its annual growth target of about 7.5%. Growth in investment, factory production, exports and retail sales all slowed in October. The economy grew by 7.3% year-over-year in the third quarter, its slowest pace in more than five years.

http://www.marketwatch.com/story/china-c...beforebell

[BlueKelah]

Desperate liao lah, if property crash china finished lo. How much effect it has on upcoming ipos and commodity markets remains to be seen

via tapatalk

[greengiraffe]

China is in a sweet spot...

i) monetary policies remaining effective,
ii) largely a closed economy despite highly integrated with the world,
iii) ability to attract foreign investors when they are ready to open up,
iv) enjoying low in put prices now without the need to be a global policeman and remains ally to lone ranger Putin plus other rogue regime...

Caveat here remains - how much can we trust the available and investible Chinese exposures...

China cuts rates for first time since July 2012
PUBLISHED: 21 NOV 2014 22:41:00 | UPDATED: 22 NOV 2014 05:46:23

A string of recent data suggested the Chinese economy had avoided a hard landing, but the latest PMI reading will raise concerns that the slight recovery of recent months is waning. Photo: AFP
ANGUS GRIGG AND LISA MURRAY Shanghai
Why it’s time to invest in China, India
China manufacturing activity at six-month low: HSBC
China has cut interest rates for the first time in more than two years, suggesting growth in the world’s second biggest economy is slowing sharply.

The People’s Bank of China said on Friday evening it would reduce its benchmark one-year lending rate by 0.4 percentage points to 5.6 per cent. The deposit rate will be lowered by 0.25 percentage points to 2.75 per cent.

The PBOC said it would further free up the setting of interest rates by lifting the ceiling for deposit rates to 1.2 times the benchmark level, from 1.1 times previously.

The announcement by the central bank follows Yao Jingyuan, the former chief economist of China’s National Bureau of Statistics, saying this week it was imperative that China maintained growth above 7 per cent to keep the unemployment rate low.

China will need to find more than 7 million jobs for university graduates this year.

The surprise rate cut will be welcomed by Australian iron ore producers, as it is likely to spur activity in the steel-intensive housing market. The iron ore price dropped to a fresh five year low of $US70.20 on Friday, amid weak demand from China and a rapid increase in supply.

China last cut interest rates in July 2012.

China is targeting growth of 7.5 per cent this year, its slowest pace since 1990.

The move by the PBOC follows activity in China’s giant manufacturing sector slumping to a six month low in the first half of November, amid warnings the economy was still under pressure from the weak property sector and sluggish export markets.

The HSBC Flash Purchasing Managers Index came in below expectations at 50.0 on Thursday, as the spectre of deflation was one again raised.

“Disinflationary pressures remain strong and the labour market showed further signs of weakening,” said Qu Hongbin the chief China economist at HSBC. “We still see uncertainties in the months ahead from the property market and on the export front. We think growth still faces significant downward pressures, and more monetary and fiscal easing measures should be deployed.”

The Flash reading followed the final HSBC PMI for October rising to 50.4, a three month high.

A string of recent data suggested the Chinese economy had avoided a hard landing, but the latest PMI reading will raise concerns that the slight recovery of recent months is waning.

The Australian Financial Review

BY ANGUS GRIGG
Angus is a China correspondent, based in Shanghai.

@AngusGrigg

[cfa]

Face value to Chinese is especially important , Xi will show to the World that he is the '' Right Person'' for that JOB !

[Behappyalways]

China blinks as economic downturn deepens
http://www.telegraph.co.uk/finance/econo...epens.html

[greengiraffe]

economists are funny people... slowdown ease up also want to make so much noise... anyway better to have tools to work on then no tools right...

Inflation is certainly better than deflation...

China blinks as economic downturn deepens
http://www.telegraph.co.uk/finance/econo...epens.html