CX Daily: Growth Rebounds in China’s Consumption, Industrial Production
Growth rebounds in China’s consumption, industrial production
China’s economy recorded signs of recovery in November as growth in consumption and industrial production both rebounded significantly, even as infrastructure and property investment continued to decelerate.
Retail sales, which include spending by governments, businesses and households, grew 8% YOY in November, faster than the 7.2% growth rate in the previous month and marking the highest level in five months, according to data released Monday by the National Bureau of Statistics (NBS).
Value-added industrial output rose 6.2% YOY in November, up sharply from 4.7% YOY growth in the previous month and marking the fastest expansion in five months, NBS data showed. Fixed-asset investment excluding rural households increased 5.2% YOY in the first 11 months of this year.
FINANCE & ECONOMICS
A man looks out from an opening in a wall as residential buildings stand in the distance in the Jiading district of Shangha, on April 11, 2016. Photo: Bloomberg
Real estate /
Home-price growth in China slowest in almost two years
China’s home-price growth slowed for a sixth straight month in November, with developers offering deeper discounts in a lackluster market.
New-home prices, excluding state-subsidized housing, rose just 0.3% last month from October in 70 major cities, NBS data showed Monday. That’s the slowest gain since February 2018. Twenty-one cities reported a drop in values, the most in almost four years. The most evident decline was in second-tier cities, mainly regional economic hubs, even as some of those centers made it easier for people to obtain highly sought-after residency permits.
In depth /
Whither the Chinese economy in 2020?
Yu Yongding, an influential economist and former PBOC adviser, in a recent article stirred heated debate by calling for greater fiscal and monetary stimulus to prevent GDP growth from sliding below 6%.
Liu Shijin, vice chairman of the China Development Research Foundation, a government-sponsored think tank, argued that using stimulative measures to keep growth at a certain rate will only exhaust future growth and postpone problems. Lu Ting, chief China economist at Nomura International Ltd., echoed Liu and said there is no need to keep growth at a certain level unless a dramatic slump occurs.
Debate could well be more heated than China's economy.
China injects $2 billion into banking system as loans mature
China injected liquidity into the financial system by offering medium-term loans to banks in the government’s latest effort to support economic growth. It kept interest rates on the loans unchanged.
The PBOC added 300 billion yuan ($43 billion) through the medium-term lending facility, with 286 billion yuan being used to roll over loans coming due on Monday. The difference adds up to about $2 billion. It offered the one-year loans at 3.25%, according to a statement. The central bank refrained from injecting cash through reverse repurchase operations for a 19th session on Monday, the longest hiatus in a year.
China orders banks to cut financing costs for small businesses even more
China has instructed banks to further cut financing costs for small and micro businesses across the country next year to support the underserved private sector in an effort to bolster the cooling economy.
The State Council, China’s cabinet, called on banks to lower overall financing costs on loans to small and micro businesses — those with credit lines under 10 million yuan ($1.4 million) — by 0.5 of a percentage point next year, according to a statement published after a Thursday meeting chaired by Premier Li Keqiang. It also instructed five of the country’s largest state-owned commercial banks to increase the value of loans to these companies by at least 20% next year.
Quick hits /
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BUSINESS & TECH
Norway’s Telenor will use both Huawei and Ericsson 5G equipment
Norwegian mobile operator Telenor will reportedly allow both China’s Huawei Technologies and Sweden’s Ericsson to supply equipment for its 5G network.
In addition to maintaining Telenor’s existing 4G networks, Huawei will play a role equal to Ericsson’s in building its next-generation networks in some parts of Norway over a four to five-year modernization period, Telenor CEO Sigve Brekke said at a Friday press conference, according to state news agency Xinhua.
China’s BAIC mulls raising Daimler stake to almost 10%
BAIC Group is considering lifting its stake in Daimler AG to as much as 9.9%, according to people familiar with the matter, strengthening Chinese ownership of the Mercedes-Benz maker as Germany gets drawn deeper into global trade tensions.
The move would put almost 20% of Stuttgart-based Daimler into the hands of two major Chinese owners. Zhejiang Geely Holding Group, owned by billionaire Li Shufu, bought a 9.7% holding last year. State-owned BAIC, which last reported a 5% holding in Daimler, has also raised the prospect of taking a seat on the supervisory board, sources said.
China’s State Grid acquires 49% stake in Oman power network
State Grid Corp. of China, the largest utility company in the world and the country’s main power distributor, bought 49% of Oman Electricity Transmission Co. from the Middle Eastern country’s state-owned Electricity Holding Co. amid ongoing efforts among Chinese companies to acquire foreign energy stakes.
State Grid did not disclose the value of the transaction, but a statement posted by Electricity Holding on Twitter said the deal was worth around $1 billion. The deal is the single biggest investment in Oman by a Chinese company. It is also the first major privatization by the Middle East’s largest non-OPEC oil producer.
World fails to agree on new carbon cuts at Madrid talks
The United Nations climate talks that concluded in Madrid Sunday failed to reach an agreement on new carbon emission cuts to keep the level of global heating well below the threshold of climate-related catastrophe.
After a delay of about 40 hours, nearly 200 UN member countries agreed in a closing statement of the 2019 United Nations Framework Convention on Climate Change to voluntarily submit further pledges by the next gathering in Scotland at the end of 2020. UN Secretary General António Guterres said in a Twitter post that the international community "lost an important opportunity to show increased ambition on mitigation, adaptation and finance to tackle the climate crisis.”
Quick hits /
Former state-owned steel firm head gets 18 years for taking bribes
Ping An’s OneConnect expands U.S. IPO to raise $312 million
Prosecutors sign off on arrest of founder of major cryptomining-machine firm
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