Cross-posted from: https://beehaw.org/post/11211601

Across the dozens of economic indicators released by China’s National Bureau of Statistics last week, few demonstrated the difficulty of pinning down the state of the world’s second-biggest economy better than the steel data.

Just months ago, steel output – previously subject to an informal cap as Beijing sought to curb emissions and production – was on course to expand significantly in 2023 for the first time in two years.

But – in line with an official desire to reduce output – December production fell 15 per cent year-on-year to its weakest level since 2017, a rate of decline that meant total annual output edged up, but remained essentially flat at just over 1 billion tons.

New economic indicators revealed by the Chinese government paint a picture of an economy that is still struggling to find its footing in the wake of the COVID-19 pandemic, even though it surpassed the modest growth target set by the central government.

According to data released on Wednesday by the National Bureau of Statistics, the Chinese economy grew by 5.2% in 2023. However, the same report reveals that the country is still suffering from persistent deflation, an ongoing crisis in its real estate market, a high youth unemployment and long-term demographic decline.

Cross-posted from: https://feddit.de/post/8026033

Data this week out of Beijing showing GDP growth at its weakest since 1990, outside the pandemic years, added to concerns officials are not doing enough to provide support.

China's economy grew 5.2% in 2023, slightly more than the official target, but the recovery was far shakier than many analysts and investors expected, with a deepening property crisis, mounting deflationary risks and tepid demand casting a pall over the outlook for this year.

Expectations that the world's second-largest economy would stage a strong post-COVID bounce quickly fizzled as the year progressed, with weak consumer and business confidence, mounting local government debts and slowing global growth sharply weighing on jobs, activity and investment.

After two years of underperformance, global real estate investment trusts are expected to outperform in 2024 due to a decline of supply and resilient corporate valuations, according to a new report from Hazelview Investments.

It found global REITs saw a turnaround rally of 18.9 per cent over the last two months of 2023, leading the asset class to end the year with an increase of 10.8 per cent. Nonetheless, global REITs underperformed compared to global equities, lagging by 1,359 basis points.

China is Japan's largest trading partner, and one of the biggest investment destinations for Japanese companies.

Uncertainty about China's economic prospects and pessimism about weak demand were cited as top reasons why 48 per cent of the companies surveyed said they did not invest in China or reduced their investment in 2023 compared to a year earlier.

The companies also said they were concerned how Chinese laws on espionage and cross-border data flows would play out.

The producer price index (PPI) tumbled 2.7 per cent after a 3 per cent fall in November, marking the 15th straight month of declines. Analysts had expected a 2.6 per cent slide in December.

The latest data underscores the broader weakness in demand across the economy, keeping policymakers alert to any entrenched expectations of price falls. China's central bank has pledged to step up macroeconomic policy adjustments to support the economy and drive a rebound in prices.

Data from recent months suggests that price growth has lost momentum. The annual average inflation rate in 2023 remains the highest in the world, but everything indicates, according to experts, that more moderate levels are coming, along with a degree of economic expansion.

The state banks were seen swapping yuan for US dollars in the onshore swap market before quickly selling those dollars in the spot market to support the yuan from Wednesday to Friday, two of the sources said.

The overnight CNH Hong Kong Interbank Offered Rate benchmark (CNH HIBOR), a gauge that measures the yuan's borrowing cost in the financial hub, jumped to 3.3562 per cent on Friday, its highest since Dec 19.

The state bank actions come as the Chinese yuan faces renewed downside pressure against a globally resurgent US dollar. The yuan has fallen to a three-week low against the dollar.

Chinese state-owned banks usually trade on behalf of the nation's central bank in the foreign exchange market, but they could also trade on their own behalf.

In recent months, China has sought to stabilise the yuan.

Despite a litany of support measures, China's lingering property crisis impacted consumer confidence and weighed on the broader economy. This has led to calls for more aggressive stimulus amid fears of a deepening slowdown in the world’s second-largest economy.

Cross-posted from: https://beehaw.org/post/10753302

The Chinese Communist party’s prickly attitude to criticism is not uncommon. The reality, though, is that systemic problems have over the years become features in China’s $19 trillion economy. The real estate market has tipped over after an almost unbroken 20-year boom, which the government itself encouraged. At about a quarter of GDP, housing now faces years of shrinkage as it adjusts to chronic oversupply and lower household formation. Property developers, local governments and state enterprises have high levels of debt and many face debt service difficulties. The virtual absence of inflation reflects inadequate aggregate demand.

Stalled productivity growth, the politicisation of regulation and the business environment, rapid ageing, high youth unemployment and inequality also figure prominently.