China Economy

71

Australia: “China’s favourite punching bag”

 The Chinese Embassy in Australia claims Australian officials are playing “petty tricks” in calling for an independent investigation into the cause of the Wuhan Coronavirus. Meanwhile, the editor of CCP mouthpiece, The Global Times, has described Australia as a “chewing gum stuck on the sole of China’s shoes”. The above video from WION summarises

1

PMIs confirm meek Chinese rebound

Not v-shaped by a very long way. Remember that these indexes are directional not absolute. First, manufacturing: In April , China’s epidemic prevention and control situation was further consolidated, the production and living order accelerated, and manufacturing and non-manufacturing production and operation activities continued to improve. The manufacturing PMI was 50.8% , down 1.2 percentage points from the previous month ; the non-manufacturing business activity

74

Imagine if Australia threatened to withold iron ore from China

Perhaps we should. The CCP are such an unworthy pack of arseholes that they certainly have it coming. Even Murdoch got the memo: So, let’s imagine what would happen if Australia behaved as the CCP does. What would transpire if we threatened to withhold iron ore unless it shut all wet markets and gave international

12

Pettis: More government is all China has left

Nicely put by the doyen of Chinese imbalances, at the FT: China’s People’s Daily recently announced major new guidelines to improve the economy’s market-based allocation mechanisms. These measures signalled Beijing’s determination to liberalise the economy and implement supply-side reforms that will strengthen the private sector. They follow several years of slowing growth and surging debt,

6

China industrial profits destroyed

Via China’s NBS: 1 – 3 months, the national scale industrial enterprises realized a total profit of 7814.5 billion yuan, fell 36.7% (on a comparable basis, see Note II), a decline of more than 1 – 2 narrowed in February 1.6 percent. 1 – 3 months, above-scale industrial enterprises, state-owned holding enterprises realized a total profit of 2226.7 billion yuan, fell 45.5% ; joint-stock enterprises realized a total

1

China’s stalled recovery looks bad for iron ore

Via Captial Economics: Most noteworthy for Australia is that stalled property sales recovery. Volumes down one quarter is worse than the 2015 bust that crushed bulks. There are offsets in infrastructure with local governments on the move: But infrastructure is less steel intensive that realty. The stimulus is relatively modest in context: Hence rate cuts:

114

Developed economies bill Communist Party of China for COVID-19

Not China. Not the Chinese. The Communist Party of China. Germany largest paper, Bild, went in hard: The French are not far behind, via AFR: China’s coronavirus propaganda effort in Europe has been pushed onto the defensive, as politicians, press and the public gradually turn against Beijing over its perceived culpability for the COVID-19 pandemic.

15

Crashed retail may be structural

Chinese retail sales are the only post-virus leading indicator we have for global households so they are worth paying attention to. Via the NBS: 3 months, total retail sales of social consumer goods 26450 billion, fell 15.8% (after deducting price factors, the actual decline of 18.1% , the following are the nominal growth unless otherwise specified), a decline of more than 1 – 2 narrowed in

25

Japan pulls pin on Chinese production

Via Nikkei: Amid the coronavirus pandemic, Japanese Prime Minister Shinzo Abe has proposed building an economy that is less dependent on one country, China, so that the nation can better avoid supply chain disruptions. The call touched off a heated debate in the Chinese political world. In Zhongnanhai, the area in central Beijing where leaders

13

Are Chinese house prices about to bust?

There are signs. March price growth was barely positive at 0.1%, even if it lifted slightly from February’s -0.1%. Annual growth is falling at a good clip to 5.3%: The weakness is broad-based: Raw data: With the balance of flat or falling prices across 70 cities now 44, for first negative ratio for the first

151

Fox: Wuhan flu created in Chinese lab

Via Fox: EXCLUSIVE: There is increasing confidence that COVID-19 likely originated in a Wuhan laboratory not as a bioweapon, but as part of China’s effort to demonstrate that its efforts to identify and combat viruses are equal to or greater than the capabilities of the United States, multiple sources who have been briefed on the details of early actions

8

The Chinese recovery is dreadful

Why is anybody excited about it? It is terrible and a very poor leading indicator for everyone else coming out of lockdown. Via Capital Economics:   Since when was a recovery stalling at 80% of output anything other than a catastrophe? Asia is still getting worse: Europe too: And the US: I ask you, can

5

China unleashes flood stimulus!

Or does it? Over Easter, China reported new yuan loans for March. The numbers were big at 5.15tr yuan TSF and 2.85tr bank loans of that: Shadow finance has returned: But the three-month moving average adds some sobriety to the numbers, with it much lower than previous flood stimulus episodes: The rolling annual popped: M2

6

Wuhan opens as China braces for second virus wave

Cross-posted from Sinocism: Xi chaired another Standing Committee meeting, again focused on epidemic control and restarting the economy. The readout from this meeting makes it sound like the leadership is increasingly concerned about the risks of a second wave of infections as well as the deteriorating global environment which will have a significant drag on

7

Welcome to Japan, China

A series of articles from Bloomie today add up to more than the sum of the parts. First, this: Amid all China’s efforts to contain the economic damage of the coronavirus outbreak, a crucial development slipped by almost unnoticed — the creation of the first national bad-debt asset manager in 20 years. The economic dislocation