Chinese Economics Thread


Y on Y increase on consumer spending over the Chinese year bode well for 2019. Spending top 1 trillion Yuan or 150 billion USD for the first time. Trade war or no Trade war It doesn't matter as long as people believe in better future they will spend

It's a tradition for the Chinese Ministry of Commerce to release consumption data on the very first day after a holiday ends. How does the performance of this year's "golden week" look?

Spring Festival stats bode well for economy in 2019
Source:Global Times Published: 2019/2/11 20:23:40
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Official tourism and consumption figures from the just concluded weeklong Spring Festival holiday were released on Sunday night. The number of domestic tourists increased 7.6 percent compared with the same period last year, and tourism revenue increased 8.2 percent. Meanwhile, retail and catering saw a rise in sales of 8.5 percent.

The three figures are smaller than those of last year, but still they are good enough for an economy as big as China. They reflect the downward pressure the Chinese economy is facing, but also show the tenacity of the economy. The Chinese public remains active in consumption, revealing the public's expectation and confidence toward the future.

The international environment in 2018 deteriorated, and this year the Chinese economy will still face uncertainties. This has posed severe challenges to the country's economic management. But the Spring Festival holiday data shows that most people remain optimistic about themselves and certain pessimistic predictions of the economy do not affect their plan for life.

The most basic feature of China is its big size. As long as the country is politically stable, turbulence will be diluted by society. The Chinese public is creative and adaptable in nature, and the country will not be held back by a certain challenge.

The consumption during the Spring Festival has been rising over the past few years, thanks to the public. The government has barely intervened and provided more proper services. The vitality of the public should be respected and the government should try not to intervene in microeconomic activities. This should be the general trend of China's reforms.

The spending spree during the Spring Festival also reveals that it is more important to create more ideal and convenient conditions.

For instance, people can have more paid leave and consume products of a better quality. Problems that affect people's travel experiences should be tackled.

Domestic consumption has become the locomotive of the Chinese economy and the Spring Festival proves that this locomotive is powerful. The economy functions all right, and China is continuingly releasing its potential. The biggest problem of the economy is not a lack of demand, but that government must provide favorable policies to make the economy play out its potential. This is the essence of reform and opening-up, which, however, is easier said than done.

This year will be key for the country's reform and opening-up. No matter how trade talks between China and the US turn out, China will open itself more, which will in turn promote the implementation of reform. The economic trend, as shown by the consumption figure during the Spring Festival, and the acceleration of reform and opening-up, will better converge in the Year of the Pig.
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The total foreign investment in China's major commercial real-estate projects in 2018 surpassed 70 billion yuan (U.S.$10.38 billion), up over 50% year-on-year, said CBRE Group, a global leading commercial real estate services

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China's aggregated investment is forecast to rise 7.3% this year, up 1.4 percentage points from 2018, allowing the country to better cope with economic uncertainties in 2019, said a report from the Economic and Strategic Planning Department of the Bank of China (Hong Kong)

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21:36, 15-Feb-2019
What does a record high value of new yuan loans mean for China’s monetary policy?
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The People's Bank of China (PBOC) says Chinese banks extended a record high value of new yuan loans in January. When the rest of the world is getting dovish on tightening the policy, Chinese policymakers are trying to prevent a sharper economic slowdown.

Chinese banks issued 3.23 trillion yuan (477 billion U.S. dollars) in net new yuan loans in January. That's a record amount and much higher than expected, tripling the figure for December. Total social financing, a broader indicator for the credit condition, grew to 685 billion U.S. dollars in January.

"Commercial banks used more capital in January, and the policy guidance has shown effect. That leads to faster growth in the M2 money supply. Total social financing reversed a downward trend, as capital for the real economy through loans and bond issuance grew faster. Local government debt issuance also picked up the pace," said Ruan Jianhong, the director of the central bank's statistics department.

Macro policy control strengthened in January with more counter-cyclical adjustments, according to Zhou Xuedong, the director of the PBOC's Financial Stability Bureau.

"That has increased the capital support for bank lending. But the prudent monetary policy tone hasn't changed. The counter-cyclical practice and liquidity support will be accommodative to help improve China's credit structure," Zhou added.

As yuan loans and corporate bond issuance are trending significantly higher, policymakers are trying to prevent a sharper economic slowdown.

Commercial banks have also been instructed to lend more to private companies and small firms at favorable interest rates. Bank of China plans to sell as much as 5.9 billion U.S. dollars worth of perpetual bonds, which will be the first in the country for such debt.

The money injection came to the rescue for many indebted companies as the total debt in China is now close to 300 percent of its GDP. But the weak factory gate price data on Friday is prompting speculations that the short-term cash therapy is not over yet.

For economists, the key for the authorities is to take temporary easing measures that are not at the cost of postponed state economy reforms or structural overhaul for the economy. Some analysts believe China's economic growth is bottoming out with higher inflation outlook, which would justify China's long-term monetary policy stance.


Junior Member
Lao Tzu's philosophy's "The Greatest Revelation is stillness"....... That is still China's belief unlike the noises coming from the Trump Administration .....any debtor better be realistic & cooperate with the lender. The danger is "madness" by the BIG debtor that can respond irrationally .... The World should take note and be wise in an inter-dependent world that wants PEACE & PROGRESS for ALL.
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China gold reserves rise for 2nd month in January
Xinhua| 2019-02-17 16:02:18
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China increased its official gold reserves for a second straight month in January, the latest data from the People's Bank of China showed.

The country's gold reserves rose slightly to 59.94 million ounces at the end of January from 59.56 million ounces at the end of December 2018, marking a second straight month of increase.

The latest gold purchase by the world's second-largest economy came at a time when global central banks are hoarding the precious metal.

According to the World Gold Council, global gold demand increased 4 percent year on year to 4,345.1 tonnes last year. The amount of gold bought by central banks reached the highest since 1971, the year when the dollar's peg to bullion was scrapped.

Gold reserves of central banks around the world surged 651.5 tonnes, or 74 percent year on year, in 2018.

As a safe haven hedge, gold will become more attractive in 2019, due to greater market uncertainties and the expansion of protectionist economic policies, according to a forecast from the World Gold Council.
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China's auto sales fall in January
Xinhua| 2019-02-18 15:41:31
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China's auto market remained sluggish in January, with sales down 15.8 percent year on year, data from the China Association of Automobile Manufacturers showed Monday.

China sold 2.367 million vehicles last month, while auto output reached 2.365 million units, down 12.1 percent from one year earlier.
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Economic Watch: China's economic shift awakening huge consumption potential
Xinhua| 2019-02-21 21:03:31
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China's evolving economic structure and high-quality development have been accompanied with stronger, new consumer spending power, creating a growth engine with enormous potential.

While Chinese consumers are expected to spend more on services in 2019 as the economy becomes increasingly consumption-driven, rural areas will flex their muscles by further unleashing market potential.


Consumption has been the main driver of China's economic growth for five consecutive years, but the growth of total retail sales of consumer goods showed signs of slowing in 2018, fueling concerns of "sluggish demand" and "consumption downgrading."

Growth of total retail sales of consumer goods edged down by 1.2 percentage points in 2018. The reading did not take into account the fast-growing service consumption, which stands for 49.5 percent of total consumer expenditure, said Vice Minister of Commerce Qian Keming.

For example, China's domestic tourism industry made an overall contribution of 9.94 trillion yuan (about 1.48 trillion U.S. dollars) to the country's GDP in 2018, accounting for 11 percent of total GDP, according to data from the Ministry of Culture and Tourism.

A booming tourism market is partly enabled by more emphasis on balancing environmental protection and economic growth, an important mission of China's high-quality development.

The National Forestry and Grassland Administration has recently released a guideline on promoting the forestry industry, vowing to expand forest tourism while conserving natural resources. In 2018, trips to forests grew by 15 percent year on year to account for nearly 30 percent of total domestic travel in China.

Qian said slower goods consumption mirrored the ongoing optimization of China's consumption structure. The Ministry of Commerce said service consumption would be a major driver of overall consumption growth in the future.


China's consumption potential is huge. Authorities have rolled out a slew of incentives to shore up consumption, and rural areas are showing more vigorous spending power.

Kevin Kang, KPMG China's chief economist, said policies to expand domestic demand, open wider the service industry and cut income taxes would inject new impetus into consumption growth.

A policy plan jointly released by 10 ministry-level authorities envisions that rural areas will see faster development of online shopping, e-commerce and tourism. It has also highlighted car replacement in rural areas.

Chinese e-commerce giant reported robust businesses during the Chinese New Year holiday, with fourth-tier and sixth-tier cities leading sales growth of over 60 percent, signs of rising spending power in the country's less-developed areas.

Kang said the rural market would play a significant role in unleashing consumption potential, citing a huge rural population, rapidly-growing rural income and a new appetite for trading up.

"Consumption is expected to contribute over 80 percent of GDP growth in 2019," said Guo Xiaobei, a researcher with China Minsheng Bank. The proportion was 76.2 percent in 2018.