Chinese Economics Thread

[Overbom]

Contraction in manufacturing

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China posts shock contraction in factory activity for July despite economic rebound​

• Official manufacturing purchasing managers’ index (PMI) fell to 49.0 in July, down from 50.2 in June
• ‘The foundation of China’s economic recovery is still not sound,’ Xinhua commentary warns

China’s factory activity unexpectedly fell back to shrinking range in July despite recent increasing signs of moderate recovery in the world’s No 2 economy.

The official manufacturing purchasing managers’ index (PMI) slid from 50.2 in June to to 49.0 this month, well below the 50-mark that separates growth from contraction on a monthly basis, according to data released by the National Bureau of Statistics (NBS) on Sunday.

Analysts had estimated the reading to stay unchanged from last month, according to Chinese financial data provider Wind.

Services are recovering

The official non-manufacturing PMI, which measures business sentiment in the services and construction sectors, also declined – to 53.8 from 54.7 in June – but still remained within expansion territory.

The latest official composite PMI, which includes both manufacturing and services activity, dropped to 52.5 in July from 54.1 in June.
“On the whole, the level of economic sentiment in China has fallen somewhat, and the foundation for recovery still needs to be solid,” Zhao Qinghe, senior statistician at the NBS, said.

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Too many words, just say zero-covid. "Beyond expectation" is almost becoming the Western central banks' "didnt know inflation was going to increase so much"

In a commentary published on Sunday, state news agency Xinhua warned the country to be “soberly aware that at present, the foundation of China’s economic recovery is still not sound, and it will take painstaking efforts to consolidate the momentum of improvement”.

“Due to the impact of factors beyond expectation such as the complex and severe international environment and the shock of the domestic epidemic situation, China’s economic operation still faces many risks and challenges.”

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The 5.5% target is done and dusted. They obviously aren't going to mention a failed/missed target

The Politburo, China’s top decision-making body led by President Xi Jinping, defended China’s zero-Covid policy at its highly scrutinised economic meeting on July 28 while dodging mentions of the annual growth target of “around 5.5 per cent”.

 

[Petrolicious88]

@Petrolicious88

Signs of decoupling everywhere except in the numbers :/

D try to imagine a few scenarios where Republicans dominate the White House and Congress. Or if Taiwan war starts and it’s impact on US -China relations and global supply chain.

I said a certain degree of re-shoring will happen in certain sectors (CHIPS Act for example), but it won’t happen overnight nor completely due to US/China interdependence.

 

[Strangelove]

Increase of 9.4% YoY, so much for decoupling...

 

[56860]

Increase of 9.4% YoY, so much for decoupling...


View attachment 94546

Everywhere but in the numbers :/

 

[NiuBiDaRen]

Everywhere but in the numbers :/

 

[Petrolicious88]

Everywhere but in the numbers :/

lol love it.

Right now US is saying: We need to decouple from China. Can't have a single sourcing point.

US CEOs are saying: wait hold a min, that's impossible in the short term. Give us time to slowly diversify and give us billions in subsidies too. In the mean time, we will continue to invest in china but diversify to other countries too. The exact same strategy China is using to Decouple from Australia coal.

China is saying: we must decouple from the West in certain strategic technologies, develop our own tech, initiate dual circulation. Never be allowed to be choked by the neck again and the Taiwan problem can't be delayed indefinitely.

D keeps on repeating: "Everywhere but in the numbers"

 

[FriedButter]

Don’t know if it belongs but this breaks the foreign adiponitrile monopoly over China for a lot of industries and sectors.

China’s first self-developed adiponitrile enters industrial production, a milestone in resolving ‘bottleneck’ technology and securing supply chains

China's first self-developed adiponitrile enters industrial production in Zibo, East China's Shandong Province on Sunday, marking a historic milestone in the nation's resolving of the "bottleneck" technology in high-end polyamide new material industrial chain, while making it possible for the future reduction of overreliance on foreign suppliers.

The launch of operations for the first-phase of the project is expected to break the foreign monopoly in the corresponding production technology concerning adiponitrile, which is essential for a wide range of advanced manufacturing, including the automobile engines, aerospace and other engineering and construction sectors, as China drives forward a technology upgrade and secures supply chains amid rising global volatility.

The new material project, developed by the China National Chemical Engineering Group (CNCEC), is set to break the foreign monopoly on the commodity while securing the supply chain for the new material, which is essential for manufacture of advanced equipment including the automobile engines, electrical appliances, car body, high-speed rail, as well as turbines on large ships, according to media reports.

Adiponitrile is the core raw material used in the production of nylon 66 which is the key material that is widely used in automobile, aerospace and other engineering and construction sectors. Nylon 66 is also frequently used in high-end clothing.

The project was invested in and built by CNCEC, first entering construction in Zibo in May 2020, with the first phase covering 1,800 mu (119.88 hectares). The new material project is able to use butadiene as its main raw material to produce 200,000 tons of adiponitrile and some other related new material products per year.

Moreover, its completion is expected to drive the advancement of the domestic nylon 66 industrial chain and the formation of a new material industry cluster with a total output value surpassing 100 billion yuan ($14.82 billion), according to media report.

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[KYli]

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[gadgetcool5]

Don’t know if it belongs but this breaks the foreign adiponitrile monopoly over China for a lot of industries and sectors.

adiponitrile? Are you sure it's not a more advanced process for producing it rather than the chemistry itself? adiponitrile has already been produced commercially in China for 20 years, if this press release is to be believed:

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The chemistry to produce it has been known to the West since the 1960s:

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The largest industrial organic electrosynthetic process is the
electrohydrodimerization of acrylonitrile (AN) to adiponitrile
(ADN), the main precursor to Nylon 6,6. The chemistry of this
reaction was first discovered in the 1960s, and a production
process was subsequently developed by Monsanto, which con-
tinues to be implemented in industry to date

DuPont has been producing it in a joint venture with a French company since at least 1974:

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[Strangelove]

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China's computing power industry scale exceeds 1.5 trillion yuan

A 5G base station in Qingdao, Shandong Province, May 30, 2020. /CFP

China's computing power industry, such as the manufacturing of fiber optic cables and data storage devices, achieved an average growth of over 30 percent in the past five years, according to the latest data from the Ministry of Industry and Information Technology (MIIT).

Its total computing power scale now ranks second in the world, MIIT said. The data released at the 2022 China Computational Power Conference held in Jinan, east China's Shandong Province.

MIIT said all prefecture-level cities have implemented optical network broadband and the number of gigabit fiber users has exceeded 61 million, building up a a strong foundation for the growth of computing business.

As of the end of June, China has about 1.9 million 5G base stations with more than 450 million 5G mobile phone users in the country.
The market scale of China's computing power industry has exceeded 1.5 trillion yuan in 2021, according to the China Academy of Information and Communications Technology (CAICT).

China's three major telecom operators, China Telecom, China Mobile and China Unicom, as well as large enterprises such as telecom enterprise Huawei have launched a number of new data and computing centers in the cities of Suzhou, Hohhot and Chengdu.

"It's estimated that the production capacity of the data center will exceed 1.17 million units during the year. In 2022, China Mobile's computing power network capital expenditure will be tens of billions of yuan and will continue to increase investment in the future," said Gao Tongqing, vice president of China Mobile.