Six Red Flags Pointing to China’s Economy Slowing Down...

[dasari4kntr]

 

Six Red Flag Indicators on China’s Economy

1. GDP

China’s annual GDP growth rate has averaged 9% since 1978, when the country opened itself up to the global market under Deng Xiaoping.

 

However, growth seems to have slowed to a crawl, down to 0.8% (quarter-to-quarter) in the second quarter of 2023 driven by weakness in the Tertiary Sector, which includes retail spending and the troubled real estate sector. This follows a more robust 2.2% figure in Q1, which was driven by pent-up demand released by the end of COVID-era lockdowns.

On an annual basis, China’s GDP expanded 6.3% year-over-year, below the forecasted 7.3% rate.

2. Exports

Exports fell by 14.5% in July, marking the third straight month of declines, and hitting lows not seen since February 2020. Meanwhile, imports fell 12.4%, reflecting the cautious consumer mood.

On a regional basis, exports fell year-over-year to China’s three biggest customers, ASEAN, the EU, and the U.S., by 17.4%, 15.1%, and 20.8% respectively.

 

There was one bright spot, however: exports to sanction-burdened Russia increased 51.8%, but that wasn’t nearly enough to offset the overall downward trend.

3. Consumer Price Index

The consumer price index moved into deflationary territory for the first time since 2021, with prices falling 3% year-over-year. The decline was led by Household Articles and Services, Food & Tobacco, and Transportation and Communications.

At the same time, the prices that producers paid for industrial products (PPI) fell 4.4% (year-over-year), the tenth month in a row with a negative reading.

4. Youth Unemployment

And while the headline unemployment rate remained steady at 5.3% in August 2023, up slightly from 5.2% the month before, it papers over serious weakness for urban youth, aged 16 to 24.

 

In July, the urban youth unemployment rate reached 21.3%, the highest ever recorded in the country, leading the National Bureau of Statistics of China to suspend future releases.

5. Yuan vs. USD

Given the stream of economic bad news, it’s no surprise that the yuan fell to a 16-year low against the U.S. dollar on August 16, 2023 in offshore trading.

In an effort to stabilize the currency, major state-owned Chinese banks were seen buying up yuan in offshore money markets. At the same time, the spread between the fixed exchange rate set by the People’s Bank of China and the offshore rate, rose to more than 1,000 basis points.

6. New Loans

Adding to the dismal economic mood, people borrowed less money according to the most recent figures provided by the government.

 

New bank loans fell to ¥346 billion in July, down from ¥3.05 trillion in the month before. This was the lowest reading since late-2009, and less than half of the ¥780 billion economists had forecast.

[kevinUsa]

Next enti sntav

[dasari4kntr]

2 minutes ago, kevinUsa said:

Next enti sntav

next emuntadi bro…konni rojulu kastam gaa vuntadhi…

just downturn ante…

[kevinUsa]

3 minutes ago, dasari4kntr said:

next emuntadi bro…konni rojulu kastam gaa vuntadhi…

just downturn ante…

Vuu

[dasari4kntr]

11 minutes ago, kevinUsa said:

Vuu

China's slow economic recovery post-pandemic isn't expected to significantly impact the S&P 500, but investors should remain cautious. China makes up roughly 5% of the total revenue for S&P 500 companies. If all revenue from China disappeared, the S&P 500's earnings could drop around 7%, which is significant but not disastrous. However, companies heavily weighted in the S&P 500, like Apple, Microsoft, Nvidia, Amazon, Alphabet, Tesla, and Meta Platforms, derive over 10% of their revenue from China, putting them at a higher risk in case of an economic downturn in China. Other U.S. companies with over 30% of their revenue from China are especially vulnerable. Despite some recent positive economic news from China, foreign investors withdrew almost $15 billion from Chinese stocks in August, reflecting concerns about the Chinese market. U.S. stocks have been less volatile than Chinese stocks, but companies with significant exposure to China might be seen as less appealing to some investors.

 

thats why i said in one of my previous thread...$SPY may drops to around 410...

but china is too big to collapse like any other country like sri lanka..etc...its just a temporary downturn..like rain days...

[Konebhar6]

4 hours ago, dasari4kntr said:

 

Six Red Flag Indicators on China’s Economy

1. GDP

China’s annual GDP growth rate has averaged 9% since 1978, when the country opened itself up to the global market under Deng Xiaoping.

 

However, growth seems to have slowed to a crawl, down to 0.8% (quarter-to-quarter) in the second quarter of 2023 driven by weakness in the Tertiary Sector, which includes retail spending and the troubled real estate sector. This follows a more robust 2.2% figure in Q1, which was driven by pent-up demand released by the end of COVID-era lockdowns.

On an annual basis, China’s GDP expanded 6.3% year-over-year, below the forecasted 7.3% rate.

2. Exports

Exports fell by 14.5% in July, marking the third straight month of declines, and hitting lows not seen since February 2020. Meanwhile, imports fell 12.4%, reflecting the cautious consumer mood.

On a regional basis, exports fell year-over-year to China’s three biggest customers, ASEAN, the EU, and the U.S., by 17.4%, 15.1%, and 20.8% respectively.

 

There was one bright spot, however: exports to sanction-burdened Russia increased 51.8%, but that wasn’t nearly enough to offset the overall downward trend.

3. Consumer Price Index

The consumer price index moved into deflationary territory for the first time since 2021, with prices falling 3% year-over-year. The decline was led by Household Articles and Services, Food & Tobacco, and Transportation and Communications.

At the same time, the prices that producers paid for industrial products (PPI) fell 4.4% (year-over-year), the tenth month in a row with a negative reading.

4. Youth Unemployment

And while the headline unemployment rate remained steady at 5.3% in August 2023, up slightly from 5.2% the month before, it papers over serious weakness for urban youth, aged 16 to 24.

 

In July, the urban youth unemployment rate reached 21.3%, the highest ever recorded in the country, leading the National Bureau of Statistics of China to suspend future releases.

5. Yuan vs. USD

Given the stream of economic bad news, it’s no surprise that the yuan fell to a 16-year low against the U.S. dollar on August 16, 2023 in offshore trading.

In an effort to stabilize the currency, major state-owned Chinese banks were seen buying up yuan in offshore money markets. At the same time, the spread between the fixed exchange rate set by the People’s Bank of China and the offshore rate, rose to more than 1,000 basis points.

6. New Loans

Adding to the dismal economic mood, people borrowed less money according to the most recent figures provided by the government.

 

New bank loans fell to ¥346 billion in July, down from ¥3.05 trillion in the month before. This was the lowest reading since late-2009, and less than half of the ¥780 billion economists had forecast.

Title chusi -> 6 flags ki China ki sambandham enta anukunna