China - Economic Data & News 20 (Nov 22 - Aug 23)

[winston]

CN Extends Purchase Tax Exemption for NEVs to End-2025

China's Ministry of Finance (MOF), State Administration of Taxation (SAT) and Ministry of Industry and Information Technology (MIIT) jointly issued a notice on extending the purchase tax exemption for new energy vehicles (NEVs).

According to the notice, NEVs purchased between 1 January 2024 and 31 December 2025 will be eligible for the exemption of vehicle purchase tax.

The vehicle purchase tax on NEVs purchased between 1 January 2026 and 31 December 2027, meanwhile, will be reduced by half.

Source: AAStocks Financial News

[behappyalways]

11.58 million graduates in the mainland take the job-seeking exam, to promote employment in various places

大陸1158萬畢業生求職大考 各地促就業｜方念華｜FOCUS全球新聞 20230620@tvbsfocus

https://m.youtube.com/watch?v=am7CAEvO9mw

[winston]

Chinese consumers remain cautious on spending, chase bargains and discounts amid slowing economy: study

The average selling price of FMCG products in mainland China fell 0.8 per cent year on year in the first quarter, according to a study by Bain & Co and Kantar Worldpanel

The price deflationary trend, which started in 2020, persisted in the first quarter of 2023 but became more divergent across categories, Kantar’s Jason Yu said

by Daniel Ren

Source: SCMP

https://www.scmp.com/business/china-bus ... 688941260a

[behappyalways]

Analysis of mainland China's interest rate cut: the market response is not enough

中國大陸降息 陳鳳馨分析：市場反應效果不夠【#風向龍鳳配 】

https://m.youtube.com/watch?v=P4cVKUCwFWQ

[behappyalways]

Worse than being cut in half, the number of Carrefour in China is "less than 40% in its heyday"...The tide of closing stores can't stop? China's consumer confidence is like a "changed girlfriend"?
比腰斬還慘 中國家樂福家數"不到全盛時4成"...關店潮止不住? 中國消費信心像"變了心的女友"?｜非凡財經新聞｜20230620
https://m.youtube.com/watch?v=N2Dac4L2jZE


From cosmetology to bathing, the "door-to-door economy" in China is developing rapidly but supervision and safety need to be improved
從美容到助浴 陸「上門經濟」迅猛發展 監管安全尚待完善｜譚伊倫｜FOCUS全球新聞 202306023@tvbsfocus
https://m.youtube.com/watch?v=J4FInKB7dOQ

[winston]

China economic gloom worsens with weak consumer spending data

Domestic travel spending during the recent holiday for the dragon-boat festival was lower than pre-pandemic levels.

The average spending per trip was about 16% lower than in 2019, “implying either a weaker intention to spend or less purchasing power.”

“As pent-up demand fades and the risk of an economic double-dip becomes more real in coming months, we expect in-person services consumption growth to weaken further”.

Home sales in major cities were muted through the first few weeks of June and over the holiday period.

Passenger car sales in the month are expected to have dropped nearly 6% from last year.

Source: Bloomberg

https://theedgemalaysia.com/node/672523

[behappyalways]

China's Japanification risk:

1. China is likely to enter a painful balance sheet recession that may take many years to recover.

2. China should not waste time on monetary policy and structural reforms. Instead, it should concentrate its efforts on fiscal stimulus to keep the economy running.

3. What's particularly unnevering is that the Chinese corporate sector has already stopped borrowing since 2016, even before the bubble burst (non-financial corporate debt as % of GDP has stopped growing).

4. Koo is confused and intrigued by the phenomenon in No.3......(I think a lot has to do with China's supply-side structural reforms initiated in late 2015 whose main goal is to deleverage and reduce excess capacity).

5. Chinese growth since 2016 has in large part been driven by government spending given the retreat of corporate borrowing

6. Chinese gov. has to further leverage up despite an already elevated fiscal deficit.

7. The property slowdown has exacerbated China's macro malaise. Koo recommends Beijing to expand fiscal stimulus to complete all unfinished property projects (this is in fact one of the items in the rumored stimulus package).

8. Japan's population started to contract in 2009, 19 years after the bubble burst. In contrast, China's population has already started to decline.

9. Challenges facing China seem more severe than those facing Japan in the 1990s.

10. Japanese corporates do not need to worry too much about regulatory uncertainties.

11. Koo is particularly worried about the lack of support to Chinese households during the three years of implementing zero-COVID-19 policy. Being forced to dip into savings Chinese households are now rebuilding their savings at the same time, which contributes to domestic demand weakness.

12. Chinese policymakers need to make the right decisions as this will be the last chance for the country to cross the high-income threshold.

https://twitter.com/ShanghaiMacro/statu ... 0869138432

[winston]

China's factory, service sectors stumble as economic malaise broadens

By Joe Cash

New orders and new export orders shrank for the third straight month, with export orders contracting at a faster rate.

Domestic tourism, and dining out have been making up for lost time in the early part of the year. But there is only so long that this can go on.

"Other indicators of retail sales suggest that it remains well above historical trends, and suggests some further moderation over the second half of this year."

China will roll out more stimulus measures, but concerns over debt and capital flight will keep measures aimed at shoring up weak demand in the consumer and private sectors.

Source: Reuters

https://theedgemalaysia.com/node/673076

[behappyalways]

Local govts trying to raise revenue


The economy is in recession, Mainland China Internet rumors that the Leshan Giant Buddha was sold for 1.7 billion RMB
經濟不景氣 大陸網傳樂山大佛遭賣17億RMB｜方念華｜FOCUS全球新聞 20230629 @tvbsfocus
https://m.youtube.com/watch?v=-P0BavNZkK8

[winston]

China’s factory, service sectors stumble as economic malaise broadens

CHINA’S factory activity declined for a third straight month in June and weakness in other sectors deepened, official surveys showed on Friday (Jun 30), adding pressure for authorities to do more to shore up growth as demand falters at home and abroad.

The world’s second-largest economy grew faster than expected in the first quarter largely due to a strong post-Covid rebound in consumption but policymakers have been unable to sustain the momentum in the second quarter.

Services sector activity for June also recorded its weakest reading since China abandoned its strict Covid curbs late last year, data from the National Bureau of Statistics (NBS) showed.

The official manufacturing purchasing managers’ index (PMI) inched up to 49.0 from 48.8 in May, staying below the 50-point mark that separates expansion from contraction and in line with forecasts.

New orders and new export orders shrank for the third straight month, with export orders contracting at a faster rate.

The non-manufacturing PMI fell to 53.2 from 54.50 in May, indicating a slowdown in service sector activity and construction.

Source: Business Times

https://www.businesstimes.com.sg/intern ... e-broadens