The Korea Economic Daily (June 15)
“Everything Asian policymakers were sure they knew about 2023 is going sideways.” When the year opened, “conventional wisdom” expected “Chinese growth would help the region make up for lost economic time.” Now the worry “is about deflation risks as factory-gate prices go negative” with consumer prices in China “on the verge of contraction.” Its exports are “cratering,” but China’s falling imports are “the bigger problem for Korea, and Asia more broadly.” In May, China’s imports fell by 4.5%, “dampening hopes that post-pandemic ‘revenge spending’ by 1.4 billion Chinese would propel Asian growth sharply higher.”
Tags: Asia, China, Consumer prices, Contraction, Cratering, Deflation risks, Exports, Factory-gate prices, Growth, Imports, Korea, Negative, Policymakers, Sideways
Financial Times (April 28)
“Deprived of investment opportunities abroad, Russians have piled their savings into the likes of Lukoil, Gazprom and Sberbank, which combined account for about 40 per cent of the stock market’s total value.” Marking a rebound, “Russia’s stock market has climbed to its highest level in more than a year as domestic retail investors with nowhere else to go snap up the dividend-paying stocks that sold off heavily following the invasion of Ukraine”.
Tags: 2022, Banking crisis, Bracing, Economy, Fears, Growth, Interest rates, Q1, Q4, Recession, Slowdown, U.S., Wall Street, Wobbled
The Guardian (April 18)
“China’s economy rebounded faster than expected, surpassing growth estimates for the first quarter of the year, after the country relaxed its onerous Covid-19 restrictions and consumer spending surged.” The 4.5% quarterly growth marked “the fastest in a year and beat the 4% rise forecast by analysts polled by Reuters.”
Tags: Analysts, China, Consumer spending, COVID-19, Economy, Estimates, Forecast, Growth, Onerous, Q1, Rebounded, Restrictions, Surpassing
South China Morning Post (February 17)
“China’s regulators have unblocked the path for companies to list overseas, reopening the avenue of fundraising after a 20-month obstruction to enable businesses to recapitalise for growth in the post-Covid period.” Applications must be vetted by the China Securities Regulatory Commission (CSRC) while the issuer must adhere to rules established by industry regulators in “disclosures of customers’ data and anything that could be construed as state secret.”
Tags: China, CSRC, Customers’ data, Disclosures, Fundraising, Growth, Industry regulators, Issuer, Overseas, Post-Covid, Recapitalise, Regulators, Reopening, State secrets, Vetted
Investment Week (January 23)
“Chinese equities took a beating in the year of the tiger, with the collapse of the nation’s property market, stringent restrictions on some of its sectors and its zero-Covid policy all hampering investor interest.” In contrast, the year of the rabbit is beginning “in a remarkably different place…. Dynamics are now shifting in a favourable direction, benefiting Chinese stocks and global growth.” Nevertheless, “investment experts remain wary and advise caution.”
Tags: Caution, China, Collapse, Dynamics, Equities, Experts, Favourable, Growth, Investor, Property market, Rabbit, Restrictions, Stocks, Tiger, Zero COVID
Wall Street Journal (January 10)
“Based on the growth of the money supply, Japan clearly fails to qualify as ultra-loose. On the contrary, it has been ultra-tight for decades.” Based on the quantity theory of money and Milton Friedman’s insights, “that tightness put Japan right where anyone… would expect: with ultra-low inflation.” That’s right, “Japan’s ultra-low inflation rates have been the result of ultra-tight, not ‘ultra-loose,’ monetary policy. The Bank of Japan’s attraction to this fallacy has resulted in Japan’s lost decades.”
Tags: BOJ, Fallacy, Friedman, Growth, Japan, Lost decades, Monetary policy, Money supply, Rates, Ultra-loose, Ultra-low inflation, Ultra-tight
Institutional Investor (January 9)
“Amid market volatility in 2022, defensive stocks, most of which are dividend payers with stable earnings, had a good run. While they tend to underperform growth or cyclical stocks in bull markets, they are usually perceived as safer bets during recessionary periods. Dividend stocks gained 2 percent from January to October 2022, beating the market by more than 20 percent.”
Tags: 2022, Bull markets, Cyclical, Defensive, Dividend stocks, Growth, Market volatility, Recessionary, Safer, Stable earnings, Underperform
Reuters (October 17)
“Local governments have long been a pump-primer of China’s growth, but declining state land sales revenue in the wake of an ongoing crackdown on debt in the sector has severely eroded their financial power – a situation exacerbated this year by China’s feeble growth, weak tax income and crippling COVID restrictions.” These bodies now face budget shortfalls of roughly $1 trillion. Amid China’s wobbly economy, “the timing couldn’t be worse.”
Tags: Budget shortfalls, China, COVID restrictions, Crackdown, Debt, Declining Land sales revenue, Economy, Eroded, Feeble, Financial power, Growth, Local governments, Pump-primer, Tax income
Bloomberg (August 7)
“Sky-high US inflation may finally be approaching a peak as global economic growth sputters and oil and other commodity prices plunge. Now the focus is shifting to how fast and far it will retreat.” The tight job market “is probably the biggest reason why inflation may prove more entrenched than the optimists expect.”
Tags: Commodity prices, Entrenched, Global, Growth, Inflation, Job market, Oil, Optimists, Peak, Plunge, Sky-high, Sputters, U.S.
WARC (August 1)
“Whether it’s $18 for a two-ounce ginseng drink or $75,000 for a luxury mattress, the story is the same: Chinese consumers are becoming more frugal and the days of carefree spending have gone.” For over a decade, upmarket western brands have relied on China’s “expanding middle class” to drive growth, “but now, with a slowing economy, growing unemployment and a disruptive zero-COVID policy, those same middle classes are as likely to be saving as spending.”
Tags: Carefree, China, Consumers, Frugal, Growth, Luxury, Middle class, Saving, Slowing Economy, Spending, Unemployment, Upmarket, Western brands, Zero COVID
