CX Daily: IMF Cuts Global Growth Outlook to Slowest Since Financial Crisis
Global outlook ‘precarious,’ IMF says
The IMF further cut economic growth forecasts for China and the world as a whole, citing trade barriers and geopolitical tensions eroding the potential for economic expansion, according to the latest World Economic Outlook report released this week.
The IMF slashed the global growth forecast to 3% in 2019 — the lowest since the 2008 financial crisis — down 0.3 of a percentage point from the previous projection in April. It was the fifth consecutive downgrade to the 2019 forecast since July 2018.
The IMF downgraded China’s forecast to 6.1% for 2019 and 5.8% for 2020 — 0.2 and 0.3 of a percentage point lower than in April.
The IMF also said Chinese policymakers urgently need to reduce risks in the banking sector and use fiscal policy to defuse the effects of the trade war to rebalance the economy for the long term.
FINANCE & ECONOMICS
A real estate agents' office in the Kowloon district of Hong Kong in January 2019. Photo: VCG
HK properties /
Hong Kong raises mortgages cap for first-time homebuyers
The Hong Kong government unveiled a package of measures Wednesday to address housing affordability and access issues that have helped fuel the anger behind four months of mass protests.
The move aims to increase home ownership by easing down-payment and mortgage requirements, but some said they worry that it may drive up prices in the world’s most expensive property market.
The government plans to increase the amount first-time homebuyers can borrow for a mortgage under a government-backed insurance program, allowing first-time purchasers to borrow as much as 90% of a property’s value up to a maximum of HK$8 million ($1 million), double the previous limit, according to a report released by Hong Kong's Chief Executive Carrie Lam.
Market access /
China's market officially open for foreign banks, insurers
Foreign banks and insurance companies have now technically crossed the finish line in their long march to be allowed greater market access in China after the State Council, the cabinet, formally announced revised regulations that relax restrictions on their doing business in the country.
The changes, which take effect immediately, are the culmination of almost two years of work by officials to fulfill pledges made by the government in November 2017 to open the financial sector wider to overseas institutions. The promises included scrapping limits on foreign shareholdings, which effectively gave overseas financial companies the green light to set up wholly owned entities or take control of joint ventures in banking, insurance, fund management and securities by 2021.
Exchange rate /
China unshackles daily yuan fixing, suggesting flexibility ahead
China’s daily currency fixing, unmoved for weeks, may finally be starting to track the spot rate again.
The PBOC on Wednesday weakened its daily yuan reference rate to 7.0746 per dollar, tracking losses in the spot rate. On Tuesday, it was strengthened by the most in a month. The fixings come after China kept the daily reference rate basically flat for 15 sessions ahead of the latest round of trade talks with the U.S.
Central bank downplays concerns of spiraling inflation
After consumer inflation hit an almost six-year high last month, a senior PBOC official said that the central bank will closely watch a variety of inflation indicators and work to allay concerns that inflation could rise further.
“There is no basis for continuous inflation or deflation in China currently,” Sun Guofeng, director of the PBOC’s monetary policy department, said at a press briefing on Tuesday. In September the CPI rose 3%, up 0.2 of a percentage point from the month before and the highest reading since October 2013.
Quick hits /
Singapore lays out plan to take China ties to ‘higher level'
BUSINESS & TECH
Huawei posts strong revenue growth despite U.S. export ban
U.S.-sanctioned Chinese technology giant Huawei Technologies Co. said its revenue rose by 24.4% in the first three quarters this year despite a U.S. export ban.
The company Wednesday posted strong revenue of 610.8 billion yuan ($86.1 billion) during January to September in an unaudited earnings report, providing a snapshot of its quarterly business performance, which is not required for a private company. Huawei’s sales revenue in the third quarter were about 209.5 billion yuan, according to Caixin’s calculation.
The Shenzhen-based company didn’t disclose net profit during the first nine months, but it said the net profit margin was 8.7% in the period.
Budget smartphone-maker Realme shifts up-market
Realme, the budget sub-brand of Chinese smartphone-making giant Oppo, is shifting focus to the mid- to high-end market with the launch of a new, more expensive handset.
The company unveiled its X2 Pro series at a launch in Beijing on Tuesday, with prices ranging from 2,599 yuan ($367) to 3,299 yuan, depending on storage capacity and design.
The model is the most expensive phone ever offered by Realme. The brand previously released models priced between 900 yuan and 2,000 yuan.
Social media /
China freezes some social media accounts in Myanmar cross-border fraud crackdown
China has frozen a number of social media accounts suspected of engaging in fraud along its border with Myanmar as part of a clampdown on telecom fraud believed to be originating in northern parts of the Southeast Asian nation.
Some users of popular programs like QQ, WeChat, and Alipay found that their accounts suddenly became inaccessible Monday, according to domestic Chinese media reports. Some users on Chinese social media posted screenshots bearing a pop-up message stating that their accounts had been suspended “because the account is suspected of fraud.”
Translation app Youdao downsizes New York IPO
Something was clearly lost in the translation.
That’s the message coming from Youdao, the popular translation app owned by gaming giant NetEase, which has just announced a massive reduction in the size of its planned New York IPO.
According to its latest filing on Tuesday with the U.S. securities regulator, Youdao is now aiming to raise up to $116 million through its listing on the New York Stock Exchange. That’s down sharply from the maximum amount of $300 million it was originally hoping to raise when it made its initial filing at the end of September.
The company set a price range of $15 to $18 for its ADSs.
Quick hits /
ByteDance deepens education push with study buddy machine
Alibaba-backed social e-commerce app returns after months-long absence
Ant Financial seeks $3.5 billion loan at lower rate
China Beats U.S. 8-1 When It Comes to Charging Electric Cars
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