China's economy returned to growth in the second quarter, rebounding more strongly than expected from a historic contraction caused by the coronavirus outbreak, official data showed Thursday.

Gross domestic product expanded a surprise 3.2 percent in April-June, the National Bureau of Statistics said, as workers, factories and firms cautiously returned to normality after harsh lockdowns brought the virus under&nbsp;control.

However, retail sales -- a key indication of consumer sentiment in the world's second-largest economy -- fell short of expectations, shrinking 1.8 percent on-year last month.

The coronavirus, which first emerged in the city of Wuhan late last year, has since shut businesses and destroyed hundreds and millions of jobs globally, and likely tipping the world economy into recession.

China's official figure was markedly better than the 1.3 percent on-year growth tipped by an AFP poll of analysts, although still among the lowest rates on record.

The economy contracted 1.6 percent on-year in the first six months, the NBS said, while the urban unemployment rate dipped to 5.7 percent in June, from 5.9 percent a month earlier.

The employment figure remains closely watched, with nearly nine million graduates expected to enter an uncertain labour market this year and analysts pointing out that actual unemployment is likely higher.

Tommy Wu, economist at Oxford Economics, noted in a report last month that the "survey-based unemployment rate substantially understates labour market stress as the measure excludes large numbers of unemployed (would-be) migrants".

Industrial production continued to climb in June, growing in line with expectations at 4.8 percent, up from 4.4 percent in May.

Some expect China to be the only major economy to see growth in 2020, as it was the first to be hit by the virus and likely first to bounce back.

China's economy returned to growth in the second quarter, rebounding more strongly than expected from a historic contraction caused by the coronavirus outbreak, official data showed Thursday.

China's economy returned to growth in the second quarter, rebounding more strongly than expected from a historic contraction caused by the coronavirus outbreak, official data showed Thursday. Gross domestic product expanded a surprise 3.2 percent in April-June, the National Bureau of Statistics said, as workers, factories and firms cautiously returned to normality after harsh lockdowns brought the virus under control. However, retail sales -- a key indication of consumer sentiment in the world's second-largest economy -- fell short of expectations, shrinking 1.8 percent on-year last month. The coronavirus, which first emerged in the city of Wuhan late last year, has since shut businesses and destroyed hundreds and millions of jobs globally, and likely tipping the world economy into recession. China's official figure was markedly better than the 1.3 percent on-year growth tipped by an AFP poll of analysts, although still among the lowest rates on record. The economy contracted 1.6 percent on-year in the first six months, the NBS said, while the urban unemployment rate dipped to 5.7 percent in June, from 5.9 percent a month earlier. The employment figure remains closely watched, with nearly nine million graduates expected to enter an uncertain labour market this year and analysts pointing out that actual unemployment is likely higher. Tommy Wu, economist at Oxford Economics, noted in a report last month that the "survey-based unemployment rate substantially understates labour market stress as the measure excludes large numbers of unemployed (would-be) migrants". Industrial production continued to climb in June, growing in line with expectations at 4.8 percent, up from 4.4 percent in May. Some expect China to be the only major economy to see growth in 2020, as it was the first to be hit by the virus and likely first to bounce back.

China's economy bounces back from pandemic contraction

China's GDP has expanded by 3.2% in the second quarter of the year. The data released by the National Bureau of Statistics showed recovery from a historic contraction.

Economy rebounds in China: GDP has expanded 3.2% in second quarter

In a surprising move, a couple of days back the Chinese Premier had sparked a rush to set up curbside stalls by praising them as a creator of jobs in the coronavirus-hit economy. Watch report.

China backtracks efforts to promote street vending | Beijing street vendors

China ramped up efforts on Monday to heal the world's second-biggest economy as health authorities reported a further drop in new coronavirus cases, although the country remains wary of carriers of the disease coming from abroad and infected people who exhibit no symptoms.

China ramped up efforts on Monday to heal the world's second-biggest economy as health authorities reported a further drop in new coronavirus cases, although the country remains wary of carriers of the disease coming from abroad and infected people who exhibit no symptoms. The city of Wuhan, the source of the pandemic, reported no new cases for a sixth day, as businesses reopened and residents set about reclaiming a more normal life after a lockdown of almost two months. Smartly turned out staff waited in masks and gloves to greet customers at entrances to the newly reopened Wuhan International Plaza, home to boutiques of luxury brands such as Cartier and Louis Vuitton. "The Wuhan International Plaza is very representative (of the city)," said Zhang Yu, 29. "So its reopening really makes me feel this city is coming back to life." Electric carmaker Tesla Inc has also reopened a showroom in Wuhan. Sunday's tally of 31 new cases in mainland China - comprising one locally transmitted infection and 30 imported cases - was down from 45 the previous day, the National Health Commission said. As infections fall, policymakers are scrambling to revitalise an economy nearly paralysed by months of curbs aimed at controlling the spread of the flu-like disease. On Monday, the central bank unexpectedly cut the interest rate on reverse repurchase agreements by 20 basis points, the largest in nearly five years. The government is pushing businesses and factories to reopen, as it rolls out fiscal and monetary stimulus to spur recovery from what is feared to be an outright economic contraction in the quarter to March. China's exports and imports could worsen as the pandemic spreads, depressing demand both at home and abroad, Xin Guobin, the vice minister of industry and information technology, said on Monday. Virus concerns Worried about a second wave triggered by returning Chinese, many of them students, China cut international flights massively from Sunday for an indefinite period, after it began denying entry to almost all foreigners a day earlier. Average daily arrivals at airports this week are expected to be about 4,000, down from 25,000 last week, an official of the Civil Aviation Administration of China said on Monday. The return to work has also prompted concern about potential domestic infections as travel curbs are rolled back, especially regarding carriers who exhibit no, or very mild, symptoms of the highly contagious virus. Hubei authorities say 4.6 million people in the province returned to work by Saturday, with 2.8 million of them heading for other parts of China. Most of the departing migrant workers went to the southern provinces of Guangdong and Fujian, the eastern provinces of Jiangsu and Zhejiang, and northeast China. Northwestern Gansu province reported a new case of a traveller from the central province of Hubei, who drove back with a virus-free health code. Authorities in Zhejiang province said asymptomatic patients with pneumonia would face the same quarantine conditions as confirmed cases, including 14 days in isolation centres. Premier Li Keqiang said on Monday that China will strengthen screening, quarantine and treatment of cases including people who were in close contact with confirmed or asymptomatic coronavirus patients. China is likely to release data on asymptomatic patients, state-controlled financial magazine Yicai reported, citing an unnamed expert close to policy-making. No time frame was given, however. Many asymptomatic people are infected patients undergoing an incubation period, and in some areas, up to 70% of such asymptomatic carriers will eventually become confirmed cases, Yicai quoted the expert as saying. At Wuhan International Plaza, shoppers had to queue 1-1/2 metres (5 ft) apart for temperature checks while flashing "green" mobile telephone codes attesting to a clean bill of health. "Being able to be healthy and leave the house, and meet other colleagues who are also healthy is a very happy thing," said Wang Xueman, a cosmetics sales representative.

China takes steps to heal virus-hit economy as infections fall

A French bakery in Beijing is suffering heavy losses due to coronavirus outbreak across the country as the Chinese authority are limiting public activity to the least scale, including having afternoon tea.

"We are too depressed": French bakery in Beijing

<a href="https://www.wionews.com/world/who-defends-chinas-handling-of-coronavirus-280873">WHO defends China's handling of coronavirus as death toll rises to 1,665</a>

<img alt="China" data-entity-type="file" data-entity-uuid="552c1559-88a4-4b3a-a50b-4e6c91bf3994" src="//cdn.wionews.com/sites/default/files/inline-images/1_13.jpg" />

The death toll from a coronavirus outbreak in mainland China has reached 1,665 as of the end of Saturday, up by 142 from the previous day.

<a href="https://www.wionews.com/world/ukrainian-president-zelensky-rejects-trumps-claim-that-ukraine-is-corrupt-280875">Ukrainian President Zelensky rejects Trump's claim that Ukraine is corrupt</a>

<img alt="Ukraine" data-entity-type="file" data-entity-uuid="b74c9884-82ba-4808-9737-29c04e7be4d8" src="//cdn.wionews.com/sites/default/files/inline-images/2_10.jpg" />

Speaking at the Munich Security Conference, Zelenskiy said he was very open with Trump.

<a href="https://www.wionews.com/world/covid-19-countries-issue-travel-and-health-advisories-to-citizens-280876">COVID-19: Countries issue travel and health advisories to citizens</a>

<img alt="India" data-entity-type="file" data-entity-uuid="caea1f30-588a-449f-b250-bceeb036ce52" src="//cdn.wionews.com/sites/default/files/inline-images/3_10.jpg" />

India has advised its citizens to refrain from travelling to China. The Indian government has said that anyone with a travel history in China since January 15, 2020 could be quarantined.

<a href="https://www.wionews.com/india-news/jaishankar-meets-pompeo-pelosi-on-sidelines-of-munich-security-conference-280865">Jaishankar meets Pompeo, Pelosi on sidelines of Munich Security Conference</a>

<img alt="S Jaishankar" data-entity-type="file" data-entity-uuid="1a38c309-febb-4b38-a202-78c72a9b5dd5" src="//cdn.wionews.com/sites/default/files/inline-images/EQz1BejWsAIdcAu.jpg" />

"Good to see @SecPompeo at #MSC2020. Allowed us to take stock of the relationship as we look forward to @realDonaldTrump 's visit," Jaishankar said on Twitter.

WHO defends China's handling of coronavirus as death toll rises to 1,665 The death toll from a coronavirus outbreak in mainland China has reached 1,665 as of the end of Saturday, up by 142 from the previous day.

WHO defends China's handling of coronavirus as death toll rises to 1,665 The death toll from a coronavirus outbreak in mainland China has reached 1,665 as of the end of Saturday, up by 142 from the previous day. Ukrainian President Zelensky rejects Trump's claim that Ukraine is corrupt Speaking at the Munich Security Conference, Zelenskiy said he was very open with Trump. COVID-19: Countries issue travel and health advisories to citizens India has advised its citizens to refrain from travelling to China. The Indian government has said that anyone with a travel history in China since January 15, 2020 could be quarantined. Jaishankar meets Pompeo, Pelosi on sidelines of Munich Security Conference "Good to see @SecPompeo at #MSC2020. Allowed us to take stock of the relationship as we look forward to @realDonaldTrump 's visit," Jaishankar said on Twitter.

Morning News Brief: WHO defends China, coronavirus death toll, and more!

&nbsp;

<a href="https://www.wionews.com/world/white-house-memo-says-strike-on-iranian-commander-responded-to-past-attacks-280761">White House memo says strike on Iranian commander responded to past attacks</a>

<img alt="Iran" data-entity-type="file" data-entity-uuid="145ab5cb-446c-4260-81d7-df22b8dec028" src="//cdn.wionews.com/sites/default/files/inline-images/1_12.jpg" />

The House of Representatives Foreign Affairs Committee released the memo a day after the U.S. Senate, in a rebuke to Trump, passed legislation with rare bipartisan support to limit the president’s ability to wage war against Iran.

<a href="https://www.wionews.com/world/beijing-quarantines-returning-residents-as-china-struggles-to-pick-up-economy-280760">Beijing quarantines returning residents as China struggles to pick up economy</a>

<img alt="China" data-entity-type="file" data-entity-uuid="cfd91644-7423-4b9f-bef3-c38fa8bad656" src="//cdn.wionews.com/sites/default/files/inline-images/5_0.jpg" />

“From now on, all those who have returned to Beijing should stay at home or submit to group observation for 14 days after arriving,” read the notice from Beijing’s virus prevention working group cited by the Beijing Daily.

&nbsp;

<a href="https://www.wionews.com/world/amazon-flipkart-challenge-new-indian-tax-on-online-sellers-280762">Amazon, Flipkart challenge new Indian tax on online sellers</a>

<img alt="Online" data-entity-type="file" data-entity-uuid="ebb1b22a-446b-419a-8614-57253adb3f77" src="//cdn.wionews.com/sites/default/files/inline-images/3_8.jpg" />

The online retail industry is braced for a possible 1% tax on each sale made by sellers on their platforms from April if the proposal is approved by parliament next month.

&nbsp;

<a href="https://www.wionews.com/sports/manchester-city-banned-from-european-competition-for-two-seasons-by-uefa-280763">UEFA bans Manchester City from European competition for two seasons</a>

<img alt="City" data-entity-type="file" data-entity-uuid="155557c2-82e3-43ad-8a10-5e5a63f95aff" src="//cdn.wionews.com/sites/default/files/inline-images/2_9.jpg" />

The top four teams in the Premier League qualify for the Champions League and City are currently second -- should the ban stand then the fifth-placed team would take their spot.

&nbsp;

&nbsp;

&nbsp;

White House memo says strike on Iranian commander responded to past attacks The House of Representatives Foreign Affairs Committee released the memo a day after the U.

White House memo says strike on Iranian commander responded to past attacks The House of Representatives Foreign Affairs Committee released the memo a day after the U.S. Senate, in a rebuke to Trump, passed legislation with rare bipartisan support to limit the president’s ability to wage war against Iran. Beijing quarantines returning residents as China struggles to pick up economy “From now on, all those who have returned to Beijing should stay at home or submit to group observation for 14 days after arriving,” read the notice from Beijing’s virus prevention working group cited by the Beijing Daily. Amazon, Flipkart challenge new Indian tax on online sellers The online retail industry is braced for a possible 1% tax on each sale made by sellers on their platforms from April if the proposal is approved by parliament next month. UEFA bans Manchester City from European competition for two seasons The top four teams in the Premier League qualify for the Champions League and City are currently second -- should the ban stand then the fifth-placed team would take their spot.

Morning News Brief: Beijing quarantines returning residents, why US killed Soleimani, and more!

The emergence of a SARS-like virus in China is the last thing Hong Kong's struggling economy needs, analysts say, as the city reels from the twin storms of the global trade war and months of political unrest.

The emergence of a SARS-like virus in China is the last thing Hong Kong's struggling economy needs, analysts say, as the city reels from the twin storms of the global trade war and months of political unrest. The semi-autonomous financial hub is currently on high alert for any appearance of the new coronavirus, which first surfaced in the Chinese city of Wuhan and has since spread to the United States and around Asia. In 2003, nearly 300 people were killed in Hong Kong during an outbreak of Severe Acute Respiratory Syndrome (SARS), which also began on the mainland and hammered the city's economy as tourists arrivals plunged. "We are on extremely high alert and preparing for the worst," chief secretary Matthew Cheung told reporters on Tuesday. "We have not lowered our guard." The timing could hardly be worse. Hong Kong has been tipped into a recession by the US-China trade war and months of seething pro-democracy protests that have upended its reputation for stability. On Monday, Moody's downgraded Hong Kong's credit rating, saying the government had failed to respond to the economic and political demands of protesters and that China's increased influence was undermining the city's once-vaunted institutions. A disease outbreak in the densely packed city would only add to current economic woes. "This is definitely the last thing Hong Kong people want to see," said Jackson Wong, an asset management director at Amber Hill Capital Ltd. "The current situation will definitely remind investors about what we suffered in 2003 during the SARS outbreak in Hong Kong," he added. Also Read: China confirms person-to-person spread of the new virus as fourth death reported [ Citizens protect themselves with face masks (Courtesy: Reuters) ] 'Salt in the wounds' Hong Kong's stock market sank on Tuesday - with tourism-linked stocks leading the losses - after a top Chinese scientist said the Wuhan virus has now been found to pass between humans. The brewing crisis comes days before the Lunar New Year holiday, which sees hundreds of millions of people travel across China and overseas. The number of mainland Chinese travelling to Hong Kong has dropped dramatically since the anti-government protests began last summer, and there are fears the Wuhan virus will only make things worse for the battered tourism industry. "Hotel, catering and tourism have borne the brunt of the recession and now this situation is like rubbing salt into the wounds," Dickie Wong, executive director of research at Kingston Securities stated. "It will deal a heavy blow to the city's economic atmosphere. The impact of the political unrest sparked by the extradition bill (protests) has not yet ended." Hong Kong's health authorities are taking few chances in a bid to stave off a repeat of the SARS epidemic. Monitoring for people with fevers has been ramped up at the airport and local hospitals to include anyone coming from Hubei province, not just the capital city of Wuhan. More than 100 people who have come back from the region and reported flu-like symptoms have been isolated and treated, although none have yet tested positive for the new strain. - More prepared than SARS - But the spread of confirmed cases in multiple Chinese cities, including neighbouring Shenzhen, has put Hong Kong on edge with face masks rapidly selling out. Isolation wards and doctors are on standby. The SARS outbreak dramatically transformed Hong Kong into a place where the population is now far more conscious of contagion and hygiene standards. Door handles and lift buttons in the city's myriad skyscrapers are routinely sterilised multiple times a day, while an unguarded sneeze on the crowded subway can cause neighbouring commuters to scramble for distance. Surgical face masks are ubiquitous, not just in the winter flu season. Hong Kong's difficulties in battling SARS were compounded by the veil of secrecy that surrounded the outbreak on the authoritarian mainland. But specialists who are prepping the city for any new outbreak say they have been encouraged by the transparency Chinese authorities have shown following the Wuhan outbreak. "The timescale of recognising, characterising, releasing and reporting information is a vast improvement from the time of SARS," Gabriel Leung, Dean of the University of Hong Kong's medical school told reporters on Tuesday. "What did take months during the time of SARS is now compressed into a matter of weeks or days," he added.

Wuhan virus compounds Hong Kong's economic woes

China's factory activity showed surprising signs of improvement in November, with growth picking up to a near three-year high, a private sector survey showed on Monday, reinforcing upbeat government data released over the weekend.

But analysts remain concerned about deflationary risks in the sector, unconvinced that the worst is over yet for Chinese manufacturers. They say the sub-indexes of both surveys painted a picture of patchy recovery that will be difficult to sustain.

"The improvement last month was driven by different factors across the two manufacturing indices, making it hard to pinpoint the reason for the apparent uptick industrial activity," Julian Evans-Pritchard, Senior China Economist, wrote in a note on Monday.

"We doubt this marks the start of a decisive rebound inactivity," he said.

The Caixin/Markit manufacturing Purchasing Managers' Index (PMI) index rose to 51.8 in November from 51.7 in the previous month, marking the fastest expansion since December 2016, when it was 51.9.

The 50-mark separates expansion from contraction on a monthly basis.&nbsp;

Total new orders and factory production remained at buoyant levels in November, although they both eased slightly from record highs in the previous month, when they grew the fastest in over six years and nearly three years, respectively.

Larry Hu, Chief China economist at Macquarie Group, cautioned that the improvement could be hit as many one-off tailwinds wear off, such as better sentiment on trade deal and warm weather. Business confidence slipped and companies were reluctant to replenish their inventories, worried about the uncertain outlook for demand and the prolonged <a href="https://www.wionews.com/world/china-wants-us-tariffs-rolled-back-in-phase-one-trade-deal-report-265517">China-US&nbsp;trade war</a>, the survey showed.

China's official factory activity gauge on Saturday also surprised, returning to growth for the first time in seven months as domestic demand picked up in response to stimulus measures. But gains were slight and export orders sluggish.

The official survey focuses more on heavy industry than Caixin's, which is believed to include firms that are more export oriented. The two surveys also cover different geographical areas.

The Caixin survey showed sub-index for new export orders came in at 51, marginally below that in October, when it was the highest since February 2018.

Resilience in the sector led to a notable recovery in the labour market in the month, with companies adding workers for the first time in eight months.

However, profit margins remained under pressure, with input costs continuing to rise while output charges fell, suggesting some firms are still cutting their prices due to fierce competition for sales.

"While growth is likely to stabilise in November, the overall downtrend will continue in months ahead," Hu told Reuters.

The Chinese government has been trying to spur domestic demand for well over a year, largely through higher infrastructure spending and tax cuts, but the measures have been slow to gain traction.

Economic growth cooled to a near 30-year low of 6.0 per cent&nbsp;in the third quarter.

"I think the rebound in headline PMIs may indicate the possibility that <a href="https://www.wionews.com/business-%26-economy/china-economic-growth-slows-to-67-in-second-quarter-151991">China</a> will still be able to achieve above 6 per cent&nbsp;growth rate in 2019," said Betty Wang, senior China economist at ANZ.&nbsp;

"But the price subindices in the manufacturing PMI survey still declined, which suggests the deflationary risk in the manufacturing sector remains."

To help avert a sharper slowdown, China has brought forward 1 trillion yuan&nbsp;of the 2020 local government special bond quota to this year. The bonds are used largely to fund public works.

While China has cut some of its key lending rates in the last few months to reduce corporate financing costs, the reductions have been quite modest. Analysts believe policymakers are reluctant to unleash more aggressive stimulus out of concern it could heighten financial risks and add to a mountain of debt.

Washington and Beijing said in October they were working on a "phase one" trade agreement, but initial market hopes for a quick deal are fading after weeks of conflicting headlines.

A deal could slide into next year as Beijing presses for more extensive tariff rollbacks, and the Trump administration counters with heightened demands of its own.

Highlighting the tension, China's Global Times newspaper said on Sunday that Beijing is demanding Washington removes existing tariffs, not just planned tariffs, as part of the deal, citing sources with direct knowledge of the trade talks.

Additional US&nbsp;duties on Chinese exports are set to kick in on December&nbsp;15.

Months of protests in Chinese-ruled Hong Kong have also exacerbated tensions.

A trade deal has now stalled after the <a href="https://www.wionews.com/world/united-states-house-passes-hong-kong-democracy-act-256310">US&nbsp;passed legislation</a> backing protesters in Hong Kong, news website Axios reported on Sunday, citing a source close to Trump's negotiating team.

China's factory activity showed surprising signs of improvement in November, with growth picking up to a near three-year high, a private sector survey showed on Monday, reinforcing upbeat government data released over the weekend.

China's factory activity showed surprising signs of improvement in November, with growth picking up to a near three-year high, a private sector survey showed on Monday, reinforcing upbeat government data released over the weekend. But analysts remain concerned about deflationary risks in the sector, unconvinced that the worst is over yet for Chinese manufacturers. They say the sub-indexes of both surveys painted a picture of patchy recovery that will be difficult to sustain. "The improvement last month was driven by different factors across the two manufacturing indices, making it hard to pinpoint the reason for the apparent uptick industrial activity," Julian Evans-Pritchard, Senior China Economist, wrote in a note on Monday. "We doubt this marks the start of a decisive rebound inactivity," he said. The Caixin/Markit manufacturing Purchasing Managers' Index (PMI) index rose to 51.8 in November from 51.7 in the previous month, marking the fastest expansion since December 2016, when it was 51.9. The 50-mark separates expansion from contraction on a monthly basis. Total new orders and factory production remained at buoyant levels in November, although they both eased slightly from record highs in the previous month, when they grew the fastest in over six years and nearly three years, respectively. Larry Hu, Chief China economist at Macquarie Group, cautioned that the improvement could be hit as many one-off tailwinds wear off, such as better sentiment on trade deal and warm weather. Business confidence slipped and companies were reluctant to replenish their inventories, worried about the uncertain outlook for demand and the prolonged China-US trade war, the survey showed. China's official factory activity gauge on Saturday also surprised, returning to growth for the first time in seven months as domestic demand picked up in response to stimulus measures. But gains were slight and export orders sluggish. The official survey focuses more on heavy industry than Caixin's, which is believed to include firms that are more export oriented. The two surveys also cover different geographical areas. The Caixin survey showed sub-index for new export orders came in at 51, marginally below that in October, when it was the highest since February 2018. Resilience in the sector led to a notable recovery in the labour market in the month, with companies adding workers for the first time in eight months. However, profit margins remained under pressure, with input costs continuing to rise while output charges fell, suggesting some firms are still cutting their prices due to fierce competition for sales. "While growth is likely to stabilise in November, the overall downtrend will continue in months ahead," Hu told Reuters. The Chinese government has been trying to spur domestic demand for well over a year, largely through higher infrastructure spending and tax cuts, but the measures have been slow to gain traction. Economic growth cooled to a near 30-year low of 6.0 per cent in the third quarter. "I think the rebound in headline PMIs may indicate the possibility that China will still be able to achieve above 6 per cent growth rate in 2019," said Betty Wang, senior China economist at ANZ. "But the price subindices in the manufacturing PMI survey still declined, which suggests the deflationary risk in the manufacturing sector remains." To help avert a sharper slowdown, China has brought forward 1 trillion yuan of the 2020 local government special bond quota to this year. The bonds are used largely to fund public works. While China has cut some of its key lending rates in the last few months to reduce corporate financing costs, the reductions have been quite modest. Analysts believe policymakers are reluctant to unleash more aggressive stimulus out of concern it could heighten financial risks and add to a mountain of debt. Washington and Beijing said in October they were working on a "phase one" trade agreement, but initial market hopes for a quick deal are fading after weeks of conflicting headlines. A deal could slide into next year as Beijing presses for more extensive tariff rollbacks, and the Trump administration counters with heightened demands of its own. Highlighting the tension, China's Global Times newspaper said on Sunday that Beijing is demanding Washington removes existing tariffs, not just planned tariffs, as part of the deal, citing sources with direct knowledge of the trade talks. Additional US duties on Chinese exports are set to kick in on December 15. Months of protests in Chinese-ruled Hong Kong have also exacerbated tensions. A trade deal has now stalled after the US passed legislation backing protesters in Hong Kong, news website Axios reported on Sunday, citing a source close to Trump's negotiating team.

China's factory activity surprises with fastest expansion in three years

China's exports suffered their third month of decline in October, and while the drop was less than expected there were warnings Friday of more pain to come as the <a href="https://www.wionews.com/world/china-us-agree-tariff-rollback-if-phase-one-trade-deal-is-completed-260641">US trade war </a>rumbles on.

While tensions between the world's top two economies are beginning to ease, Beijing is struggling to get the engines of growth firing on all cylinders as demand for its goods around the world tails off.

In the latest sign of weakness, official data showed overseas shipments fell 0.9 per cent on-year last month, though that is much slower than the 3.2 per cent drop seen in September and much better than forecasts.

Economists surveyed by Bloomberg had tipped a 3.9 per cent plunge.

Imports sank for the sixth straight month in October, dropping 6.4 per cent, though that was also an improvement on the previous month and beat estimates.

China's trade surplus with the United States, a key point of anger in the White House, increased to $26.42 billion.

The economic powerhouses have been embroiled in a bruising trade war for more than a year, with punitive tariffs slapped on two-way trade worth hundreds of billions of dollars.

But markets have been buoyed in recent weeks by expectations the row, which has dragged on the global economy, could be easing as China and the US finalise a mini trade deal that is part of a wider agreement.

Hopes for an end to the stand-off were boosted Thursday when China said the two sides have agreed a plan to remove tariffs imposed on goods in stages if the phase one preliminary pact on which they are working is completed.

Ken Cheung Kin Tai, a senior strategist at Mizuho Bank said that the "less worrying trade figures should help suppress fears of weakening fourth-quarter China growth amid the trade war".

China's economic growth slowed to six percent in the third quarter, the weakest rate in 27 years.

However, analysts warned the subdued outlook worldwide will continue to weigh on trade.

"Slowing global growth and the uncertainty surrounding the US-China trade tensions will continue to dampen trade prospects in China and demand for imports," said Tommy Wu of Oxford Economics.

He added that further policy easing and support from the government could be expected to stabilise growth.

"The contraction in both exports and imports eased more than expected last month," said Martin Rasmussen, China economist at Capital Economics.

"But even if the 'phase one' US-China trade deal crosses the finish line, it is unlikely to alleviate the main headwinds facing exporters and outbound shipments look set to remain weak in the coming months."

China's exports suffered their third month of decline in October, and while the drop was less than expected there were warnings Friday of more pain to come as the US trade war rumbles on.

China's exports suffered their third month of decline in October, and while the drop was less than expected there were warnings Friday of more pain to come as the US trade war rumbles on. While tensions between the world's top two economies are beginning to ease, Beijing is struggling to get the engines of growth firing on all cylinders as demand for its goods around the world tails off. In the latest sign of weakness, official data showed overseas shipments fell 0.9 per cent on-year last month, though that is much slower than the 3.2 per cent drop seen in September and much better than forecasts. Economists surveyed by Bloomberg had tipped a 3.9 per cent plunge. Imports sank for the sixth straight month in October, dropping 6.4 per cent, though that was also an improvement on the previous month and beat estimates. China's trade surplus with the United States, a key point of anger in the White House, increased to $26.42 billion. The economic powerhouses have been embroiled in a bruising trade war for more than a year, with punitive tariffs slapped on two-way trade worth hundreds of billions of dollars. But markets have been buoyed in recent weeks by expectations the row, which has dragged on the global economy, could be easing as China and the US finalise a mini trade deal that is part of a wider agreement. Hopes for an end to the stand-off were boosted Thursday when China said the two sides have agreed a plan to remove tariffs imposed on goods in stages if the phase one preliminary pact on which they are working is completed. Ken Cheung Kin Tai, a senior strategist at Mizuho Bank said that the "less worrying trade figures should help suppress fears of weakening fourth-quarter China growth amid the trade war". China's economic growth slowed to six percent in the third quarter, the weakest rate in 27 years. However, analysts warned the subdued outlook worldwide will continue to weigh on trade. "Slowing global growth and the uncertainty surrounding the US-China trade tensions will continue to dampen trade prospects in China and demand for imports," said Tommy Wu of Oxford Economics. He added that further policy easing and support from the government could be expected to stabilise growth. "The contraction in both exports and imports eased more than expected last month," said Martin Rasmussen, China economist at Capital Economics. "But even if the 'phase one' US-China trade deal crosses the finish line, it is unlikely to alleviate the main headwinds facing exporters and outbound shipments look set to remain weak in the coming months."

China export drop beats forecasts in October but more pain tipped

China on Wednesday unveiled its most comprehensive and resolute plan to create a better business environment and give a new impetus to markets across the country.

New regulation to create fairer, more stable, predictable business environment in China

Hong&nbsp;Kong's&nbsp;Cathay&nbsp;Pacific&nbsp;Airways Ltd&nbsp;on Friday lowered its&nbsp;expectations&nbsp;for&nbsp;full-year&nbsp;profit&nbsp;due to "incredibly challenging" conditions in its home market racked by <a href="https://www.wionews.com/world/hong-kong-braces-for-weekend-of-fresh-anti-government-protests-256600">anti-government&nbsp;protests</a>&nbsp;that it expected to persist for the rest of 2019.

The airline reported a 7.1 per cent&nbsp;drop in passenger numbers for the month of September as travellers avoided&nbsp;Hong&nbsp;Kong&nbsp;due to widespread and sometimes violent&nbsp;protests, and said its second-half financial results were likely to be below the first half.

Cathay, which is trying to complete a three-year&nbsp;financial turnaround plan, has become the biggest corporate casualty of the&nbsp;Hong&nbsp;Kong&nbsp;protests&nbsp;after China demanded it suspend staff involved in, or supporting, the demonstrations that have plunged the former British colony into a political crisis.

The airline in August reported a HK$1.347 billion first-half&nbsp;profit. At that time,&nbsp;Cathay&nbsp;said second-half&nbsp;profit&nbsp;was likely to be higher than the first-half, as is typically the case for the airline, based on seasonality.

The consensus estimate before Friday's update was for the airline to report a&nbsp;full-year&nbsp;profit&nbsp;of HK$3.2 billion, according to 11 analysts polled by Refinitiv, although some last month predicted a poor second half.

Cathay&nbsp;shares were trading 1.4 per cent&nbsp;lower at 0510 GMT.

"We continue to see a significant shortfall in inbound bookings for the remainder of 2019 as compared to the same snapshot last&nbsp;year,"&nbsp;Cathay&nbsp;Chief Customer and Commercial Officer Ronald Lam said in a statement on Friday.

Cathay&nbsp;last month said it would cut capacity for the upcoming winter season.

BOCOM International analyst Luya You on Friday said further cuts might be needed in 2020 and even 2021 given there was no way of determining a timeline for when the political turmoil in&nbsp;Hong&nbsp;Kong&nbsp;would be resolved.

Inbound traffic to&nbsp;Hong&nbsp;Kong&nbsp;was down 38 per cent&nbsp;in September, unchanged from August, with demand from the mainland Chinese market hit especially hard, the airline said.

The 7.1 per cent&nbsp;fall in passenger numbers in September was better than the 11.3 per cent&nbsp;drop in August, but&nbsp;Cathay&nbsp;said an increasing reliance on transit passengers had affected its yields - a measure of the average fare paid per kilometre per passenger.

BOCOM's You said even if passenger numbers outside China appeared to stabilise in the coming months, that was likely to come at the cost of significantly lower fares.

Cathay&nbsp;also said cargo volumes fell 4.4 per cent&nbsp;in September, but that there were signs of improvement as it headed into air freight's traditional high-demand season.

Hong Kong's Cathay Pacific Airways Ltd on Friday lowered its expectations for full-year profit due to "incredibly challenging" conditions in its home market racked by anti-government protests that it expected to persist for the rest of 2019.

Hong Kong's Cathay Pacific Airways Ltd on Friday lowered its expectations for full-year profit due to "incredibly challenging" conditions in its home market racked by anti-government protests that it expected to persist for the rest of 2019. The airline reported a 7.1 per cent drop in passenger numbers for the month of September as travellers avoided Hong Kong due to widespread and sometimes violent protests, and said its second-half financial results were likely to be below the first half. Cathay, which is trying to complete a three-year financial turnaround plan, has become the biggest corporate casualty of the Hong Kong protests after China demanded it suspend staff involved in, or supporting, the demonstrations that have plunged the former British colony into a political crisis. The airline in August reported a HK$1.347 billion first-half profit. At that time, Cathay said second-half profit was likely to be higher than the first-half, as is typically the case for the airline, based on seasonality. The consensus estimate before Friday's update was for the airline to report a full-year profit of HK$3.2 billion, according to 11 analysts polled by Refinitiv, although some last month predicted a poor second half. Cathay shares were trading 1.4 per cent lower at 0510 GMT. "We continue to see a significant shortfall in inbound bookings for the remainder of 2019 as compared to the same snapshot last year," Cathay Chief Customer and Commercial Officer Ronald Lam said in a statement on Friday. Cathay last month said it would cut capacity for the upcoming winter season. BOCOM International analyst Luya You on Friday said further cuts might be needed in 2020 and even 2021 given there was no way of determining a timeline for when the political turmoil in Hong Kong would be resolved. Inbound traffic to Hong Kong was down 38 per cent in September, unchanged from August, with demand from the mainland Chinese market hit especially hard, the airline said. The 7.1 per cent fall in passenger numbers in September was better than the 11.3 per cent drop in August, but Cathay said an increasing reliance on transit passengers had affected its yields - a measure of the average fare paid per kilometre per passenger. BOCOM's You said even if passenger numbers outside China appeared to stabilise in the coming months, that was likely to come at the cost of significantly lower fares. Cathay also said cargo volumes fell 4.4 per cent in September, but that there were signs of improvement as it headed into air freight's traditional high-demand season.

Cathay Pacific lowers full-year profit expectations as Hong Kong protests bite

Oil&nbsp;prices&nbsp;were stable on Friday ahead of&nbsp;data&nbsp;that analysts say could show&nbsp;China, the world's largest&nbsp;oil&nbsp;importer, just recorded its <a href="https://www.wionews.com/world/chinas-q3-gdp-growth-slows-to-6-slowest-in-27-years-256577">weakest quarter of economic&nbsp;growth</a>&nbsp;in nearly three decades, dragged down by a <a href="https://www.wionews.com/world/china-says-hopes-to-reach-phased-trade-pact-with-us-as-early-as-possible-256449">trade dispute</a> with the United States.

Global benchmark Brent crude&nbsp;oil&nbsp;futures fell by 9 cents, 0.2 per cent, to $59.82 a barrel by 0039 GMT.

US&nbsp;West Texas Intermediate (WTI) crude&nbsp;futures were up by 4 cents, or 0.07 per cent, to $53.97 per barrel.

Analysts polled by Reuters expected&nbsp;China's gross domestic product (GDP) to grow 6.1 per cent&nbsp;in the July-September quarter from a year earlier, the slowest pace since the first quarter of 1992, the earliest quarterly&nbsp;data&nbsp;on record.

The Chinese government is due to release its third-quarter&nbsp;GDP&nbsp;data&nbsp;at 0200 GMT, along with other indicators for September.

With&nbsp;all&nbsp;eyes&nbsp;on the upcoming numbers, analysts expect weaker economic readings to add to pressure on Beijing to step up stimulus measures.

"The release of fixed asset investment and industrial activity (data) in&nbsp;China&nbsp;will set the tone in commodity markets," ANZ Bank predicted in a note.

Adding to downward pressure, US&nbsp;crude&nbsp;oil&nbsp;stockpiles surged last week as refinery output dropped to a two-year low, while gasoline and distillate fuel inventories decreased, the Energy Information Administration said on Thursday.

US&nbsp;crude inventories increased by 9.3 million barrels in the week ended October 11, compared with analysts' expectations for an increase of 2.9 million barrels.

Elsewhere, the joint technical committee monitoring a global deal to cut output between the Organization of the Petroleum Exporting Countries (OPEC) and partners, including Russia, found compliance with cuts for September stood at 236 per cent, according to four OPEC sources.

OPEC and its&nbsp;allies have agreed to limit their&nbsp;oil&nbsp;production by 1.2 million barrels per day&nbsp;until March 2020.

&nbsp;

Oil prices were stable on Friday ahead of data that analysts say could show China, the world's largest oil importer, just recorded its weakest quarter of economic growth in nearly three decades, dragged down by a trade dispute with the United States.

Oil prices were stable on Friday ahead of data that analysts say could show China, the world's largest oil importer, just recorded its weakest quarter of economic growth in nearly three decades, dragged down by a trade dispute with the United States. Global benchmark Brent crude oil futures fell by 9 cents, 0.2 per cent, to $59.82 a barrel by 0039 GMT. US West Texas Intermediate (WTI) crude futures were up by 4 cents, or 0.07 per cent, to $53.97 per barrel. Analysts polled by Reuters expected China's gross domestic product (GDP) to grow 6.1 per cent in the July-September quarter from a year earlier, the slowest pace since the first quarter of 1992, the earliest quarterly data on record. The Chinese government is due to release its third-quarter GDP data at 0200 GMT, along with other indicators for September. With all eyes on the upcoming numbers, analysts expect weaker economic readings to add to pressure on Beijing to step up stimulus measures. "The release of fixed asset investment and industrial activity (data) in China will set the tone in commodity markets," ANZ Bank predicted in a note. Adding to downward pressure, US crude oil stockpiles surged last week as refinery output dropped to a two-year low, while gasoline and distillate fuel inventories decreased, the Energy Information Administration said on Thursday. US crude inventories increased by 9.3 million barrels in the week ended October 11, compared with analysts' expectations for an increase of 2.9 million barrels. Elsewhere, the joint technical committee monitoring a global deal to cut output between the Organization of the Petroleum Exporting Countries (OPEC) and partners, including Russia, found compliance with cuts for September stood at 236 per cent, according to four OPEC sources. OPEC and its allies have agreed to limit their oil production by 1.2 million barrels per day until March 2020.

Oil prices steady, all eyes on data seen showing China GDP growth slowdown

China's 'new economy' is rapidly rising with a more balanced and sustainable growth rate thanks to its enhanced capabilities for innovation, according to a China Media Group (CMG) commentary published on Monday.

Innovation the powerhouse of China's economy

China's central bank said on Friday it was cutting the amount of <a href="https://www.wionews.com/world/us-china-trade-war-to-knock-05-points-off-global-growth-french-finance-minister-247859">cash that banks must</a> hold as reserves for the third time this year, releasing $126.35 billion&nbsp;in liquidity to shore up the flagging economy.

Analysts had expected China to announce more policy easing measures soon as the world's second-largest economy comes under growing pressure from escalating US&nbsp;tariffs and sluggish domestic demand.

The People's Bank of China (PBOC) said it would cut the reserve requirement ratio (RRR) by 50 basis points (bps) for all banks, with an additional 100 bps cut for qualified city commercial banks. The RRR for large banks will be lowered to 13.0 per cent.

The PBOC has now slashed the ratio seven times since early 2018. The size of the latest move was at the upper end of market expectations, and the number of funds released will be the largest so far in the current easing cycle.

The broad-based cut, which will release 800 billion yuan in liquidity, is effective September&nbsp;16. The additional targeted cut will release 100 billion yuan, in two phases effective October 15 and November 15.

"The move shows policymakers are increasingly worried but it’s far from enough to stabilise the economy," said Larry Hu, head of Greater China economics at Macquarie Group in Hong Kong.

"The key constraint is that everything is slowing down corporates are not willing to invest because of the trade war, a global slowdown, and weak infrastructure and property sector growth."

The latest move to spur bank lending followed a cabinet meeting on September 4 that pledged to implement both broad and targeted cuts in the RRR "in a timely manner".

The PBOC said it will maintain a prudent monetary policy and avoid a flood-like stimulus while increasing counter-cyclical adjustments and maintaining reasonable and abundant liquidity.

Analysts say China's economic growth has likely cooled further this quarter from a near 30-year low of 6.2 per cent in April-June. Morgan Stanley says it is now tracking the lower end of the government's full-year target range of around 6-6.5 per cent. 
&nbsp; 
With Washington imposing new tariffs from September 1 and threatening more measures from October 1 and December 15, some economists have recently cut their China growth estimates for next year to below 6 per cent, which would breach Beijing's longer-term development goal.

The central bank is also widely expected to cut one or more of its key policy interest rates in mid-September for the first time in four years as it works to reduce corporate funding costs.

"I think it's very likely they will cut the LPR (loan prime rate) by about 5-10 bps later this month. I also expect another RRR cut of 50 bps by the end of this year,” Macquarie's Hu said.

Despite a slew of support measures and policy easing since last year, China's economy is still struggling to get back on a firm footing.

July's data showed growth stumbled more sharply than expected as the intensifying trade war with the United States took a heavier toll, and August factory surveys pointed to continued weakness.

Prior to the latest RRR cut, the central bank had pumped out 3.63 trillion yuan in net liquidity through reserve cuts since early 2018, according to Reuters calculations based on PBOC data and analyst estimates.

The PBOC's hefty injections have helped bring down companies' borrowing costs, which had jumped early last year as regulators clamped down on riskier types of financing and debt.

But analysts have cautioned that some companies may be merely refinancing existing debt at better rates, rather than borrowing to fund fresh investments.

Analysts say the problem is not a lack of credit the PBOC has injected generous amounts of liquidity but weakening business and consumer confidence as the trade war drag on. That has weighed on activity from manufacturing and investment to retail sales.

In the latest escalation in the protracted trade dispute, the United States began imposing 15 per cent&nbsp;tariffs on a variety of Chinese goods on September&nbsp;1&nbsp;including footwear, smartwatches, and flat-panel televisions and China began imposing new duties on US crude.

The next high-level trade talks are slated for early October, but a lasting peace seems more elusive than ever.

The government has repeatedly said it will not resort to "flood-like" stimulus as it did in past economic downturns, which left a mountain of debt and sparked fears of property market bubbles.

Instead, Beijing has relied more on fiscal stimuli such as increased infrastructure spending and tax cuts, though the boost has been milder than expected so far.

The cabinet said on Wednesday China will allow local governments to issue special-purpose bonds earlier than normal next year to help steady growth, and specified for the first time that about 20 per cent&nbsp;of all special purpose bonds issued by every province could be used as project capital.

Many local governments are facing increasing fiscal strains as tax cuts and the broader economic slowdown reduce revenues, hampering their ability to implement infrastructure projects.

The OECD has estimated that China's fiscal stimulus was equivalent to 4.25 per cent of gross domestic product (GDP) in 2019, up from 2.94 per cent last year.

China's central bank said on Friday it was cutting the amount of cash that banks must hold as reserves for the third time this year, releasing $126.35 billion in liquidity to shore up the flagging economy.

China's central bank said on Friday it was cutting the amount of cash that banks must hold as reserves for the third time this year, releasing $126.35 billion in liquidity to shore up the flagging economy. Analysts had expected China to announce more policy easing measures soon as the world's second-largest economy comes under growing pressure from escalating US tariffs and sluggish domestic demand. The People's Bank of China (PBOC) said it would cut the reserve requirement ratio (RRR) by 50 basis points (bps) for all banks, with an additional 100 bps cut for qualified city commercial banks. The RRR for large banks will be lowered to 13.0 per cent. The PBOC has now slashed the ratio seven times since early 2018. The size of the latest move was at the upper end of market expectations, and the number of funds released will be the largest so far in the current easing cycle. The broad-based cut, which will release 800 billion yuan in liquidity, is effective September 16. The additional targeted cut will release 100 billion yuan, in two phases effective October 15 and November 15. "The move shows policymakers are increasingly worried but it’s far from enough to stabilise the economy," said Larry Hu, head of Greater China economics at Macquarie Group in Hong Kong. "The key constraint is that everything is slowing down corporates are not willing to invest because of the trade war, a global slowdown, and weak infrastructure and property sector growth." The latest move to spur bank lending followed a cabinet meeting on September 4 that pledged to implement both broad and targeted cuts in the RRR "in a timely manner". The PBOC said it will maintain a prudent monetary policy and avoid a flood-like stimulus while increasing counter-cyclical adjustments and maintaining reasonable and abundant liquidity. Analysts say China's economic growth has likely cooled further this quarter from a near 30-year low of 6.2 per cent in April-June. Morgan Stanley says it is now tracking the lower end of the government's full-year target range of around 6-6.5 per cent. With Washington imposing new tariffs from September 1 and threatening more measures from October 1 and December 15, some economists have recently cut their China growth estimates for next year to below 6 per cent, which would breach Beijing's longer-term development goal. The central bank is also widely expected to cut one or more of its key policy interest rates in mid-September for the first time in four years as it works to reduce corporate funding costs. "I think it's very likely they will cut the LPR (loan prime rate) by about 5-10 bps later this month. I also expect another RRR cut of 50 bps by the end of this year,” Macquarie's Hu said. Despite a slew of support measures and policy easing since last year, China's economy is still struggling to get back on a firm footing. July's data showed growth stumbled more sharply than expected as the intensifying trade war with the United States took a heavier toll, and August factory surveys pointed to continued weakness. Prior to the latest RRR cut, the central bank had pumped out 3.63 trillion yuan in net liquidity through reserve cuts since early 2018, according to Reuters calculations based on PBOC data and analyst estimates. The PBOC's hefty injections have helped bring down companies' borrowing costs, which had jumped early last year as regulators clamped down on riskier types of financing and debt. But analysts have cautioned that some companies may be merely refinancing existing debt at better rates, rather than borrowing to fund fresh investments. Analysts say the problem is not a lack of credit the PBOC has injected generous amounts of liquidity but weakening business and consumer confidence as the trade war drag on. That has weighed on activity from manufacturing and investment to retail sales. In the latest escalation in the protracted trade dispute, the United States began imposing 15 per cent tariffs on a variety of Chinese goods on September 1 including footwear, smartwatches, and flat-panel televisions and China began imposing new duties on US crude. The next high-level trade talks are slated for early October, but a lasting peace seems more elusive than ever. The government has repeatedly said it will not resort to "flood-like" stimulus as it did in past economic downturns, which left a mountain of debt and sparked fears of property market bubbles. Instead, Beijing has relied more on fiscal stimuli such as increased infrastructure spending and tax cuts, though the boost has been milder than expected so far. The cabinet said on Wednesday China will allow local governments to issue special-purpose bonds earlier than normal next year to help steady growth, and specified for the first time that about 20 per cent of all special purpose bonds issued by every province could be used as project capital. Many local governments are facing increasing fiscal strains as tax cuts and the broader economic slowdown reduce revenues, hampering their ability to implement infrastructure projects. The OECD has estimated that China's fiscal stimulus was equivalent to 4.25 per cent of gross domestic product (GDP) in 2019, up from 2.94 per cent last year.

China cuts banks' reserve ratios, frees up $126 billion for loans as economy slows

China lifted some restrictions on foreign investment in the financial sector Saturday, as the world's second-largest economy fights slowing growth at home and a damaging trade war with the United States.

China will remove shareholding limits on foreign ownership of securities, insurance and fund management firms in 2020, one year earlier than originally planned, the Financial Stability and Development Committee said in a statement posted by the central bank Saturday.

Foreign investors will also be encouraged to set up wealth management firms, currency brokerages and pension management companies, the statement said.

Additional measures include scrapping entry barriers for foreign insurance companies, such as a requirement of 30 years of business operations, and cancelling a 25 per cent equity cap on foreign ownership of insurance asset management firms.

Foreign-owned credit rating agencies will also be allowed to evaluate a greater number of bond and debt types, the statement said.

Beijing has long promised to further open up its economy to foreign business participation and investment but has generally dragged its feet in implementing the moves.

In November, Beijing made an exception for two European insurers, allowing Germany's Allianz to launch a 100 per cent foreign-owned subsidiary, and France's Axa to take control of its joint venture.

And in December, China's securities regulator authorized Swiss bank UBS to take a controlling stake in its local business.

Weak Chinese growth

Saturday's announcement followed a Friday meeting chaired by economic czar Liu He in which policymakers focused on tackling financial risk and financial contagion, and pledged new steps to support growth, according to a state council statement.

The steps were likely spurred on by a pressing need for growth following weak economic figures out on July 15.

In the second quarter, China's growth posted its weakest performance in at least 27 years at 6.7 per cent.

The anemic figures are a direct consequence of the trade war with the United States, which US President Donald Trump unleashed in March 2018 to try to force Beijing to open up its economy and limit what he calls its unfair trade practices.

The two economic giants have since hit each other with punitive tariffs covering more than $360 billion in two-way trade, damaging manufacturers on both sides of the Pacific.

Beijing has introduced measures including a massive tax cut to boost the economy, but they have not been enough to offset a domestic slowdown and softening overseas demand.

Trump and Chinese President Xi Jinping agreed to revive fractious trade negotiations when they met on the sidelines of the G20 summit in Japan on June 29, and top US and Chinese negotiators have held phone talks this month.

It is unclear when the next high-level meeting on trade talks will be held.

China lifted some restrictions on foreign investment in the financial sector Saturday, as the world's second-largest economy fights slowing growth at home and a damaging trade war with the United States.

China lifted some restrictions on foreign investment in the financial sector Saturday, as the world's second-largest economy fights slowing growth at home and a damaging trade war with the United States. China will remove shareholding limits on foreign ownership of securities, insurance and fund management firms in 2020, one year earlier than originally planned, the Financial Stability and Development Committee said in a statement posted by the central bank Saturday. Foreign investors will also be encouraged to set up wealth management firms, currency brokerages and pension management companies, the statement said. Additional measures include scrapping entry barriers for foreign insurance companies, such as a requirement of 30 years of business operations, and cancelling a 25 per cent equity cap on foreign ownership of insurance asset management firms. Foreign-owned credit rating agencies will also be allowed to evaluate a greater number of bond and debt types, the statement said. Beijing has long promised to further open up its economy to foreign business participation and investment but has generally dragged its feet in implementing the moves. In November, Beijing made an exception for two European insurers, allowing Germany's Allianz to launch a 100 per cent foreign-owned subsidiary, and France's Axa to take control of its joint venture. And in December, China's securities regulator authorized Swiss bank UBS to take a controlling stake in its local business. Weak Chinese growth Saturday's announcement followed a Friday meeting chaired by economic czar Liu He in which policymakers focused on tackling financial risk and financial contagion, and pledged new steps to support growth, according to a state council statement. The steps were likely spurred on by a pressing need for growth following weak economic figures out on July 15. In the second quarter, China's growth posted its weakest performance in at least 27 years at 6.7 per cent. The anemic figures are a direct consequence of the trade war with the United States, which US President Donald Trump unleashed in March 2018 to try to force Beijing to open up its economy and limit what he calls its unfair trade practices. The two economic giants have since hit each other with punitive tariffs covering more than $360 billion in two-way trade, damaging manufacturers on both sides of the Pacific. Beijing has introduced measures including a massive tax cut to boost the economy, but they have not been enough to offset a domestic slowdown and softening overseas demand. Trump and Chinese President Xi Jinping agreed to revive fractious trade negotiations when they met on the sidelines of the G20 summit in Japan on June 29, and top US and Chinese negotiators have held phone talks this month. It is unclear when the next high-level meeting on trade talks will be held.

China opens up finance sector to more foreign investment

China's economic growth slowed to 6.2% in the second quarter, its weakest pace in at least 27 years, as demand at home and abroad faltered in the face of mounting US trade pressure.

While more upbeat June factory output and retail sales offered signs of improvement, some analysts cautioned the gains may not be sustainable and expect Beijing will continue to roll out more support measures in coming months.

China's trading partners and financial markets are closely watching the health of the world's second-largest economy as the <a href="https://www.wionews.com/opinions/us-china-trade-war-is-making-china-stronger-234526">Sino-US trade war</a> gets longer and costlier, fuelling worries of a global recession.

Monday's growth data marked a loss of momentum for the economy from the first quarter's 6.4%, amid expectations that Beijing needs to do more to boost consumption and investment and restore business confidence.

The April-June pace was in line with analysts' expectations for the slowest since the first quarter of 1992, the earliest quarterly data on record.

"China's growth could slow to 6% to 6.1% in the second half," said Nie Wen, an economist at Hwabao Trust. That would test the lower end of Beijing's 2019 target range of 6-6.5%.

Cutting banks' reserve requirement ratios (RRR) "is still very likely as the authorities want to support the real economy in a long run," he said, predicting the economy would continue to slow before stabilising around mid-2020.

China has already slashed RRR six times since early 2018 to free up more funds for lending and analysts polled by Reuters forecast two more cuts this quarter and next.

Beijing has leaned largely on fiscal stimulus to underpin growth this year, announcing massive tax cuts worth nearly 2 trillion yuan ($291 billion) and a quota of 2.15 trillion yuan for special bond issuance by local governments aimed at boosting infrastructure construction.

The economy has been slow to respond, however, and business sentiment remains cautious.

Trade pressures have intensified since Washington sharply hiked tariffs on Chinese goods in May. While the two sides have since agreed to resume trade talks and hold off on further punitive action, they remain at odds over significant issues needed for an agreement.

Data on Friday showed China's exports fell in June and its imports shrank more than expected, while an official survey showed factories were shedding jobs at the fastest pace since the global crisis..

Premier Li Keqiang said this month that China will make timely use of cuts in banks' reserve ratios and other financing tools to support smaller firms, while repeating a vow not to use "flood-like" stimulus.

Is better data sustainable?

A steady string of weak economic data in recent months and the sudden escalation in the U.S.-China trade war had sparked questions over whether more forceful easing may be needed to get the Chinese economy back on steadier footing, including some form of interest rate cuts.

But June activity data on Monday showed industrial production, retail sales and fixed-asset investment all beat analysts' forecasts, suggesting that Beijing's earlier growth-boosting efforts may be starting to have an effect.

Analysts also say room for more aggressive monetary policy easing is being limited by fears of adding to high debt levels and structural risks.

"Cutting the benchmark deposit and lending rates -- the likelihood is very low. It's more possible (that) they twist the market-oriented rates -- cutting the interest rates of all those liquidity facilities also sends an important signal to the market," said Aidan Yao, senior Asia emerging markets economist at AXA Investment Managers in Hong Kong.

"Fiscal policy is likely to be in the driving seat and monetary policy will act in a supportive role in the coming months."

Industrial output climbed 6.3% from a year earlier, data from the National Bureau of Statistics showed, picking up from May's 17-year low and handily beating a forecast for 5.2% growth.

Daily output for crude steel and aluminium both rose to record levels.

Retail sales jumped 9.8% - the fastest clip since March 2018 - and confounding expectations for a slight pullback to 8.3%. Gains were led by a 17.2% surge in car sales.

Some analysts, however, questioned the apparent recovery in both output and sales.

Capital Economics said its in-house model suggested slower industrial growth, while the jump in car sales may have been partly due to a one-off factor.

Car dealers in China are offering big discounts to customers to reduce high inventories that have built up due to changing emission standards. Motor vehicle production actually fell 15.2%, the 11th monthly decline in a row, suggesting automakers don't expect a sustained bounce in demand any time soon.

"The monthly data were better than expected... (But) we are sceptical of this apparent recovery given broader evidence of weakness in factory activity," said Julian Evans-Pritchard, Senior China Economist at

"Looking ahead, we doubt that the data for June will mark the start of a turnaround."

Investment also slowly picking up

Fixed-asset investment for the first half of the year rose 5.8% from a year earlier, compared with a 5.5% forecast and 5.6% in the first five months of the year.

Real estate investment, a major growth driver for the world's second-largest economy, quickened in June. It rose 10.1% from a year earlier, accelerating from a 9.5% gain in May but still slower than in April, Reuters calculated.

Still, the economy remains in a complex situation, with external uncertainties on the rise, the statistics bureau said, adding China will work to ensure steady growth.

China's economic growth slowed to 6.2% in the second quarter, its weakest pace in at least 27 years, as demand at home and abroad faltered in the face of mounting US trade pressure.

China's economic growth slowed to 6.2% in the second quarter, its weakest pace in at least 27 years, as demand at home and abroad faltered in the face of mounting US trade pressure. While more upbeat June factory output and retail sales offered signs of improvement, some analysts cautioned the gains may not be sustainable and expect Beijing will continue to roll out more support measures in coming months. China's trading partners and financial markets are closely watching the health of the world's second-largest economy as the Sino-US trade war gets longer and costlier, fuelling worries of a global recession. Monday's growth data marked a loss of momentum for the economy from the first quarter's 6.4%, amid expectations that Beijing needs to do more to boost consumption and investment and restore business confidence. The April-June pace was in line with analysts' expectations for the slowest since the first quarter of 1992, the earliest quarterly data on record. "China's growth could slow to 6% to 6.1% in the second half," said Nie Wen, an economist at Hwabao Trust. That would test the lower end of Beijing's 2019 target range of 6-6.5%. Cutting banks' reserve requirement ratios (RRR) "is still very likely as the authorities want to support the real economy in a long run," he said, predicting the economy would continue to slow before stabilising around mid-2020. China has already slashed RRR six times since early 2018 to free up more funds for lending and analysts polled by Reuters forecast two more cuts this quarter and next. Beijing has leaned largely on fiscal stimulus to underpin growth this year, announcing massive tax cuts worth nearly 2 trillion yuan ($291 billion) and a quota of 2.15 trillion yuan for special bond issuance by local governments aimed at boosting infrastructure construction. The economy has been slow to respond, however, and business sentiment remains cautious. Trade pressures have intensified since Washington sharply hiked tariffs on Chinese goods in May. While the two sides have since agreed to resume trade talks and hold off on further punitive action, they remain at odds over significant issues needed for an agreement. Data on Friday showed China's exports fell in June and its imports shrank more than expected, while an official survey showed factories were shedding jobs at the fastest pace since the global crisis.. Premier Li Keqiang said this month that China will make timely use of cuts in banks' reserve ratios and other financing tools to support smaller firms, while repeating a vow not to use "flood-like" stimulus. Is better data sustainable? A steady string of weak economic data in recent months and the sudden escalation in the U.S.-China trade war had sparked questions over whether more forceful easing may be needed to get the Chinese economy back on steadier footing, including some form of interest rate cuts. But June activity data on Monday showed industrial production, retail sales and fixed-asset investment all beat analysts' forecasts, suggesting that Beijing's earlier growth-boosting efforts may be starting to have an effect. Analysts also say room for more aggressive monetary policy easing is being limited by fears of adding to high debt levels and structural risks. "Cutting the benchmark deposit and lending rates -- the likelihood is very low. It's more possible (that) they twist the market-oriented rates -- cutting the interest rates of all those liquidity facilities also sends an important signal to the market," said Aidan Yao, senior Asia emerging markets economist at AXA Investment Managers in Hong Kong. "Fiscal policy is likely to be in the driving seat and monetary policy will act in a supportive role in the coming months." Industrial output climbed 6.3% from a year earlier, data from the National Bureau of Statistics showed, picking up from May's 17-year low and handily beating a forecast for 5.2% growth. Daily output for crude steel and aluminium both rose to record levels. Retail sales jumped 9.8% - the fastest clip since March 2018 - and confounding expectations for a slight pullback to 8.3%. Gains were led by a 17.2% surge in car sales. Some analysts, however, questioned the apparent recovery in both output and sales. Capital Economics said its in-house model suggested slower industrial growth, while the jump in car sales may have been partly due to a one-off factor. Car dealers in China are offering big discounts to customers to reduce high inventories that have built up due to changing emission standards. Motor vehicle production actually fell 15.2%, the 11th monthly decline in a row, suggesting automakers don't expect a sustained bounce in demand any time soon. "The monthly data were better than expected... (But) we are sceptical of this apparent recovery given broader evidence of weakness in factory activity," said Julian Evans-Pritchard, Senior China Economist at "Looking ahead, we doubt that the data for June will mark the start of a turnaround." Investment also slowly picking up Fixed-asset investment for the first half of the year rose 5.8% from a year earlier, compared with a 5.5% forecast and 5.6% in the first five months of the year. Real estate investment, a major growth driver for the world's second-largest economy, quickened in June. It rose 10.1% from a year earlier, accelerating from a 9.5% gain in May but still slower than in April, Reuters calculated. Still, the economy remains in a complex situation, with external uncertainties on the rise, the statistics bureau said, adding China will work to ensure steady growth.

China second-quarter GDP growth slows to 27-year low, more stimulus expected

Chinese President Xi Jinping said the country's economy is stable, healthy and well placed to meet all <a href="https://www.wionews.com/world/will-take-unprecedented-action-to-ensure-supply-of-rare-earths-critical-to-tech-military-us-224397">risks and challenges</a>, according to a transcript published by the Xinhua news agency.

Xi made the remarks to the TASS Russian News Agency and Rossiyskaya Gazeta newspaper on Tuesday ahead of his state visit to Russia where he will attend a major Russian investor forum in St Petersburg. The transcript of that interview was published by Xinhua on Wednesday.

Xi did not mention <a href="https://www.wionews.com/world/rare-earths-the-latest-weapon-in-the-us-china-trade-war-222578">China`s trade war with the United States</a>, which escalated last month after Washington and Beijing slapped new tit-for-tat tariffs on each other.&nbsp;

"Looking into the future, China`s economy bears the supporting conditions for stable, healthy and sustainable growth," he said.

Xi noted China had ample room to manoeuvre in the macroeconomic policy space and that the country`s economy got off to a good start in 2019 as key indicators were kept in a reasonable range.

China`s economy grew at a steady 6.4 per cent pace in the first quarter, defying expectations for a further slowdown, as industrial production jumped sharply and consumer demand showed signs of improvement.

However, it reported surprisingly weaker growth in retail sales and industrial output for April, putting pressure on Beijing to roll out more stimulus as the trade war with the United States escalates.&nbsp;

Chinese President Xi Jinping said the country's economy is stable, healthy and well placed to meet all risks and challenges, according to a transcript published by the Xinhua news agency.

Chinese President Xi Jinping said the country's economy is stable, healthy and well placed to meet all risks and challenges, according to a transcript published by the Xinhua news agency. Xi made the remarks to the TASS Russian News Agency and Rossiyskaya Gazeta newspaper on Tuesday ahead of his state visit to Russia where he will attend a major Russian investor forum in St Petersburg. The transcript of that interview was published by Xinhua on Wednesday. Xi did not mention China`s trade war with the United States, which escalated last month after Washington and Beijing slapped new tit-for-tat tariffs on each other. "Looking into the future, China`s economy bears the supporting conditions for stable, healthy and sustainable growth," he said. Xi noted China had ample room to manoeuvre in the macroeconomic policy space and that the country`s economy got off to a good start in 2019 as key indicators were kept in a reasonable range. China`s economy grew at a steady 6.4 per cent pace in the first quarter, defying expectations for a further slowdown, as industrial production jumped sharply and consumer demand showed signs of improvement. However, it reported surprisingly weaker growth in retail sales and industrial output for April, putting pressure on Beijing to roll out more stimulus as the trade war with the United States escalates.

Xi Jinping says China's economy positioned to meet all challenges: Report

Developed Western nations have long-term economic, technological and military advantages over China and the Communist Party has to realise that some people will use the West's strong points to criticise socialism's failings, President Xi Jinping said.

Since assuming power in China more than six years ago, Xi has ramped up efforts to ensure total party loyalty and discipline, including a sweeping crackdown on corruption, warning the party's very survival is at stake.

This year, which is marked by a series of sensitive anniversaries including three decades since the bloody crackdown on pro-democracy demonstrators in and around Tiananmen Square, has seen a further increase in calls for party loyalty.

On Monday, leading party theoretical journal Qiushi, which means "Seeking Truth", published lengthy excerpts for the first time from a speech Xi gave in early 2013 shortly after becoming party boss, warning of the dangers the party faces.

Citing Marx and Engels, Xi said socialism would inevitably vanquish capitalism, but that it would be a long historical process. China practises what it calls socialism with Chinese characteristics.

China must "fully appraise the objective reality of the long-term advantage Western developed countries have in the economic, scientific, and military fields, and conscientiously prepare for all aspects of long-term cooperation and struggle between the two social systems", Xi said.

The party also needed to "face the reality that some people compare the good qualities of Western developed nations with the insufficiencies of our country's socialist development and offer criticism of it", he added.

While the party has committed "big mistakes" like the Cultural Revolution when children turned on parents and students on teachers after Mao Zedong declared class war, the party's history is "generally speaking glorious", Xi said.

Those who criticise the revolution - which brought the Communist Party to power in 1949 - are simply trying to incite the overthrow of the party, he added.

But China needs to stick to its landmark economic reforms begun in 1978, without which the party could have fallen, Xi said.

The party "may even have faced a serious crisis, like the death of the party and the death of the country encountered by the Soviet Union and Eastern European countries".

But China had proved the naysayers wrong, Xi added.

"Both history and reality tell us that only socialism can save China. Only socialism with Chinese characteristics can develop China. This is the conclusion of history and the choice of the people."

Developed Western nations have long-term economic, technological and military advantages over China and the Communist Party has to realise that some people will use the West's strong points to criticise socialism's failings, President Xi Jinping said.

Developed Western nations have long-term economic, technological and military advantages over China and the Communist Party has to realise that some people will use the West's strong points to criticise socialism's failings, President Xi Jinping said. Since assuming power in China more than six years ago, Xi has ramped up efforts to ensure total party loyalty and discipline, including a sweeping crackdown on corruption, warning the party's very survival is at stake. This year, which is marked by a series of sensitive anniversaries including three decades since the bloody crackdown on pro-democracy demonstrators in and around Tiananmen Square, has seen a further increase in calls for party loyalty. On Monday, leading party theoretical journal Qiushi, which means "Seeking Truth", published lengthy excerpts for the first time from a speech Xi gave in early 2013 shortly after becoming party boss, warning of the dangers the party faces. Citing Marx and Engels, Xi said socialism would inevitably vanquish capitalism, but that it would be a long historical process. China practises what it calls socialism with Chinese characteristics. China must "fully appraise the objective reality of the long-term advantage Western developed countries have in the economic, scientific, and military fields, and conscientiously prepare for all aspects of long-term cooperation and struggle between the two social systems", Xi said. The party also needed to "face the reality that some people compare the good qualities of Western developed nations with the insufficiencies of our country's socialist development and offer criticism of it", he added. While the party has committed "big mistakes" like the Cultural Revolution when children turned on parents and students on teachers after Mao Zedong declared class war, the party's history is "generally speaking glorious", Xi said. Those who criticise the revolution - which brought the Communist Party to power in 1949 - are simply trying to incite the overthrow of the party, he added. But China needs to stick to its landmark economic reforms begun in 1978, without which the party could have fallen, Xi said. The party "may even have faced a serious crisis, like the death of the party and the death of the country encountered by the Soviet Union and Eastern European countries". But China had proved the naysayers wrong, Xi added. "Both history and reality tell us that only socialism can save China. Only socialism with Chinese characteristics can develop China. This is the conclusion of history and the choice of the people."

Chinese President Xi says West has long-term economic, military superiority

Many attendees to the economic summit of the ongoing China Development Forum are bullish about the Chinese economy and believe that it will continue to be a key driver of the global economy.

The three-day China Development Forum, which opened Saturday, focuses on key issues such as the supply-side structural reform, new measures of proactive fiscal policy, and the opening-up of the financial sector and financial stability.

More than 50 officials from the Chinese central government departments and over 150 overseas delegates have participated in the forum, including 96 executives from the world's leading companies and nearly 30 globally well-known scholars.

China has set its GDP growth target for 2019 at between six per cent and 6.5 per cent, according to the annual Government Work Report delivered by Premier Li Keqiang at the opening meeting of the second session of the 13th National People's Congress in Beijing.

The target is lower than last year's goal of around 6.5 per cent, as the country pursues higher-quality development amid mounting uncertainties in the international economic landscape. And experts believe that China will continue to be a key contributor to the world economic growth.

"Though the target of China's economic growth rate is a little bit lower, the economic quality will improve in exchange. Besides, China's influence on the world economy is still growing. In the past ten years, the Chinese economy contributed about 30 to 50 per cent of the world economic growth. Such a figure was stood at 50 per cent in 2009 and is expected to reach up to 30 per cent this year. So China is still an important impetus for the world economic growth," said Zhu Min, Chairman of the National Institute of Financial Research of Tsinghua University.

"We're always looking for opportunities in China. And so we look at China as very investable, and we have funds available. China will continue to occupy a major growth role in the global economy," said Stephen Allen Schwarzman, CEO of the Blackstone Group, a global private equity firm.

A similar idea is also shared by Liu Shijin, deputy director of the Economic Committee of the National Committee of Chinese People's Political Consultative Conference.

"China has always been a key force in promoting economic globalisation. That's not only because China has provided the world with more opportunities in trade investment and technology after its opening-up, but also because it will become an important and active force in improving the structure of global governance," said Liu.

Many businessmen also expressed their willingness to invest in China as the country is pursuing high-level opening-up of its financial sector.

"I think China has to be really commended in the way that it's managed that path of economic growth, and it's been very successful as we have seen over really a very long term now. I think as we go forward from here, what's been interesting is to see how many more areas China is willing and indeed leading the way in terms of developing new thinking internally, which has become very attractive to external investors," said Anne Richards, chief executive officer of Fidelity International, a company that provides investment management services.

"We are always investing in the market place, and we do it through a variety of ways. We have a physical location, a massive manufacturing facility, already in place, but we continue to invest through innovation and through building up our partnerships in the market place so that we can increase our approach to the consumers, to the market place and our operational support. So we continue to invest and see great potential in the market here in China. And we are going to do our best to compete in the market place," said Doug DeVos, co-chairman of the board of directors of Amway, one of the world's leading direct selling companies.

Many attendees to the economic summit of the ongoing China Development Forum are bullish about the Chinese economy and believe that it will continue to be a key driver of the global economy.

Many attendees to the economic summit of the ongoing China Development Forum are bullish about the Chinese economy and believe that it will continue to be a key driver of the global economy. The three-day China Development Forum, which opened Saturday, focuses on key issues such as the supply-side structural reform, new measures of proactive fiscal policy, and the opening-up of the financial sector and financial stability. More than 50 officials from the Chinese central government departments and over 150 overseas delegates have participated in the forum, including 96 executives from the world's leading companies and nearly 30 globally well-known scholars. China has set its GDP growth target for 2019 at between six per cent and 6.5 per cent, according to the annual Government Work Report delivered by Premier Li Keqiang at the opening meeting of the second session of the 13th National People's Congress in Beijing. The target is lower than last year's goal of around 6.5 per cent, as the country pursues higher-quality development amid mounting uncertainties in the international economic landscape. And experts believe that China will continue to be a key contributor to the world economic growth. "Though the target of China's economic growth rate is a little bit lower, the economic quality will improve in exchange. Besides, China's influence on the world economy is still growing. In the past ten years, the Chinese economy contributed about 30 to 50 per cent of the world economic growth. Such a figure was stood at 50 per cent in 2009 and is expected to reach up to 30 per cent this year. So China is still an important impetus for the world economic growth," said Zhu Min, Chairman of the National Institute of Financial Research of Tsinghua University. "We're always looking for opportunities in China. And so we look at China as very investable, and we have funds available. China will continue to occupy a major growth role in the global economy," said Stephen Allen Schwarzman, CEO of the Blackstone Group, a global private equity firm. A similar idea is also shared by Liu Shijin, deputy director of the Economic Committee of the National Committee of Chinese People's Political Consultative Conference. "China has always been a key force in promoting economic globalisation. That's not only because China has provided the world with more opportunities in trade investment and technology after its opening-up, but also because it will become an important and active force in improving the structure of global governance," said Liu. Many businessmen also expressed their willingness to invest in China as the country is pursuing high-level opening-up of its financial sector. "I think China has to be really commended in the way that it's managed that path of economic growth, and it's been very successful as we have seen over really a very long term now. I think as we go forward from here, what's been interesting is to see how many more areas China is willing and indeed leading the way in terms of developing new thinking internally, which has become very attractive to external investors," said Anne Richards, chief executive officer of Fidelity International, a company that provides investment management services. "We are always investing in the market place, and we do it through a variety of ways. We have a physical location, a massive manufacturing facility, already in place, but we continue to invest through innovation and through building up our partnerships in the market place so that we can increase our approach to the consumers, to the market place and our operational support. So we continue to invest and see great potential in the market here in China. And we are going to do our best to compete in the market place," said Doug DeVos, co-chairman of the board of directors of Amway, one of the world's leading direct selling companies.

China continues to be key driver of global economy: Experts

Apple chief executive Tim Cook on Saturday urged China to keep opening up its economy as local rivals bit into the profits of the US tech giant caught in the crosshairs of a trade spat between Beijing and Washington.

"We have seen China continue to change and evolve... We encourage China to continue to open up," he said during a speech at the annual China Development Forum in Beijing on Saturday.

"We see that as essential not only for China to reach its full potential, but also for the global economy to thrive."

Apple in January revealed that it took a hit in the "Greater China" region, where revenue plunged almost 27 per cent in the most recent quarter.&nbsp;

The dip had been expected following the company's revenue warning in December, where Apple admitted that iPhone sales and overall earnings would be below most forecasts, citing economic weakness in China and trade frictions between Washington and Beijing.

Lower priced local rivals such as Huawei, Xiaomi and Oppo have also been nibbling at the California tech giant's market share in China.&nbsp;

Cook has been a critic of the US-China trade war that has spooked global markets. Last year, he used the China Development Forum as a venue to urge leaders of China and the US to let "calm heads prevail" and to avoid an escalation of tariffs.

Most of Apple's flagship products are assembled in China, leaving the California tech giant acutely vulnerable to Trump's tariffs.

During his speech on Saturday, Cook called for partnerships based on "openness and trust" where world players can work together to solve some of the biggest problems facing the planet including poverty, inequality and climate change.

Apple chief executive Tim Cook on Saturday urged China to keep opening up its economy as local rivals bit into the profits of the US tech giant caught in the crosshairs of a trade spat between Beijing and Washington.

Apple chief executive Tim Cook on Saturday urged China to keep opening up its economy as local rivals bit into the profits of the US tech giant caught in the crosshairs of a trade spat between Beijing and Washington. "We have seen China continue to change and evolve... We encourage China to continue to open up," he said during a speech at the annual China Development Forum in Beijing on Saturday. "We see that as essential not only for China to reach its full potential, but also for the global economy to thrive." Apple in January revealed that it took a hit in the "Greater China" region, where revenue plunged almost 27 per cent in the most recent quarter. The dip had been expected following the company's revenue warning in December, where Apple admitted that iPhone sales and overall earnings would be below most forecasts, citing economic weakness in China and trade frictions between Washington and Beijing. Lower priced local rivals such as Huawei, Xiaomi and Oppo have also been nibbling at the California tech giant's market share in China. Cook has been a critic of the US-China trade war that has spooked global markets. Last year, he used the China Development Forum as a venue to urge leaders of China and the US to let "calm heads prevail" and to avoid an escalation of tariffs. Most of Apple's flagship products are assembled in China, leaving the California tech giant acutely vulnerable to Trump's tariffs. During his speech on Saturday, Cook called for partnerships based on "openness and trust" where world players can work together to solve some of the biggest problems facing the planet including poverty, inequality and climate change.

Apple's Tim Cook urges China to continue to open up its economy

China's plans for tax cuts targeting smaller companies will help to support employment and economic stability, and will expand the country's tax base over the long term, Premier Li Keqiang was quoted as saying on Saturday.

"Implementing tax cuts for small and micro enterprises is mainly to support employment," Li said in comments posted on the Chinese government's website.

Developing and strengthening small companies is linked to economic stability and stable employment, he said.

"Looking at the long term, this will continue to expand the tax base, conserve tax resources and ultimately achieve wins for mass employment, corporate profits and fiscal revenues," he was quoted as saying, referring to the corporate tax cuts.

Li's comments come amid growing official concern over China's slowing economic growth and its impact on the labour market.

Chinese authorities plan to set a lower economic growth target of 6 to 6.5 per cent in 2019, compared with "around" 6.5 per cent in 2018, sources told Reuters, as weakening domestic demand and a damaging trade war with the United States drag on business activity and consumer confidence.

Analysts expect that China's economy grew around 6.6 per cent last year, its slowest pace since 1990, and it is expected to cool further in coming months before a slew of support measures start to kick in.

"The bottom line for the policymakers is social stability, which is crucially tied to the unemployment rate and job creation," analysts at BoAML said in a recent note. "With US-China trade risks still looming large, we believe policymakers would not hesitate to take pre-emptive measures to stabilize expectations on job stability."

More growth-boosting steps are expected this year as policymakers seek to avert the risk of a sharper slowdown.

China's State Council, or cabinet, said on January 9 that it would further reduce taxes for smaller companies. On Friday, Finance Minister Liu Kun said authorities would step up tax and fee cuts to lower corporate burdens.

China's plans for tax cuts targeting smaller companies will help to support employment and economic stability, and will expand the country's tax base over the long term, Premier Li Keqiang was quoted as saying on Saturday.

China's plans for tax cuts targeting smaller companies will help to support employment and economic stability, and will expand the country's tax base over the long term, Premier Li Keqiang was quoted as saying on Saturday. "Implementing tax cuts for small and micro enterprises is mainly to support employment," Li said in comments posted on the Chinese government's website. Developing and strengthening small companies is linked to economic stability and stable employment, he said. "Looking at the long term, this will continue to expand the tax base, conserve tax resources and ultimately achieve wins for mass employment, corporate profits and fiscal revenues," he was quoted as saying, referring to the corporate tax cuts. Li's comments come amid growing official concern over China's slowing economic growth and its impact on the labour market. Chinese authorities plan to set a lower economic growth target of 6 to 6.5 per cent in 2019, compared with "around" 6.5 per cent in 2018, sources told Reuters, as weakening domestic demand and a damaging trade war with the United States drag on business activity and consumer confidence. Analysts expect that China's economy grew around 6.6 per cent last year, its slowest pace since 1990, and it is expected to cool further in coming months before a slew of support measures start to kick in. "The bottom line for the policymakers is social stability, which is crucially tied to the unemployment rate and job creation," analysts at BoAML said in a recent note. "With US-China trade risks still looming large, we believe policymakers would not hesitate to take pre-emptive measures to stabilize expectations on job stability." More growth-boosting steps are expected this year as policymakers seek to avert the risk of a sharper slowdown. China's State Council, or cabinet, said on January 9 that it would further reduce taxes for smaller companies. On Friday, Finance Minister Liu Kun said authorities would step up tax and fee cuts to lower corporate burdens.

China's premier says tax cuts support employment, economic stability

President Xi Jinping hailed China's "reconstructive reforms" in a New Year speech, but the sorely needed changes could be put on ice in favour of averting a potentially devastating economic downturn.

The way ahead is further complicated by a volatile trade dispute with the United States that -- if unresolved -- will add to the burden of Beijing’s policymakers as they seek to fuel an economy that is running out of steam.

Beijing has for years come under pressure to introduce much-needed reforms to the country's infrastructure and lumbering state-owned enterprises as part of a drive to tackle a burdensome debt mountain and transform its growth engine from investment and exports to domestic consumption.

But Gene Fang from rating agency Moody’s told AFP: "When trade-offs between reforms and growth arise, we expect that the priority will more often be given to supporting growth."

Ten years ago China unleashed the full power of its financial arsenal by introducing massive stimulus measures, which helped Beijing avert the worst of the financial crisis engulfing the rest of the world.

However, that helped sow the seeds of today's economic troubles, with debt at alarming levels and necessary economic reforms not addressed as leaders focused on maintaining stable growth and employment.

Now, with the global economy stuttering, a slowdown in key export markets is denting a crucial source of income while the country is also struggling with a plethora of structural problems such as ageing -- and now shrinking -- population, a dwindling pool of rural workers, overcapacity and air pollution.

'Debt mess'

And then there is the trade war with the United States, which has magnified the problems while sending shudders through global markets.

"The Chinese economy is struggling, the debt mess is unresolved and the impact from the US tariffs has barely begun," said Bill Bishop, an expert on China, who added the Communist Party will do "everything it can to juice the economy" with "multiple forms of stimuli".

"Whether or not significant economic reforms will now also be forthcoming, and not just more promises, is the trillion-dollar question," he said.

Xi and US President Donald Trump may have agreed on a temporary truce in their multi-billion-dollar stand-off -- and Beijing Friday announced face-to-face talks will begin next week -- but there is little optimism the row will be brought to an end any time soon.

In the absence of a breakthrough in current negotiations, "the US-China trade conflict will weigh on growth in China and on the wider Asia-Pacific region, via a slowdown in Chinese demand", according to analysts Oxford Economics.

The impact of the trade row came into full view this week when Apple announced a shock cut in its revenue forecast for the December quarter blaming the steeper-than-expected "economic deceleration" in China and emerging markets and citing the China-US frictions.

While analysts still believe China -- which last month celebrated 40 years since opening up to the world -- should still achieve its growth target of 6.5 per cent for 2018, that would be the weakest rate in almost three decades.&nbsp;

That after an average growth rate of 9.7 per cent a year between 1978 and 2015.

Long-term goal

Raymond Deng, an analyst at Singapore-based DBS Bank, said the government must raise domestic consumption and inject "sufficient" cash into the market, while "eliminating state-owned enterprises with backward production capacity".&nbsp;

But with a debt crisis brewing, authorities have decided against the 2008-like stimulus, instead opting for a series of separate measures including making it easier for banks to lend and much-hyped tax cuts.

Some sectors saw a one per cent drop in VAT and taxpayers will in 2019 benefit from deductions in education, critical healthcare and mortgage repayments, while the rate at which tax kicks in has also been raised.

"If the tax reduction plan is implemented well, it cannot only boost corporate profits and household consumption in the short term but also improve the economic structure in the long run," said Zhu Chaoping, a strategist at JPMorgan Asset Management.

Meanwhile, Beijing University economics professor Su Jian believes support for consumption requires a rise and a "better distribution" of household income, as well as increased health, education and social support to steer people away from precautionary saving.

He also points out that China's GDP per capita is about one-eighth of that of the United States.

"The development margin is still large... the GDP can still grow seven per cent for 20 years," he said.&nbsp;

However, for many economists, wealth generation could continue to weaken.&nbsp;

Zhu expected "a GDP increase of around five per cent across the next 10 to 15 years", while Capital Economics expected the growth rate to even decline to two per cent by 2030.

Ten years ago China unleashed the full power of its financial arsenal by introducing massive stimulus measures, which helped Beijing avert the worst of the financial crisis engulfing the rest of the world.

President Xi Jinping hailed China's "reconstructive reforms" in a New Year speech, but the sorely needed changes could be put on ice in favour of averting a potentially devastating economic downturn. The way ahead is further complicated by a volatile trade dispute with the United States that -- if unresolved -- will add to the burden of Beijing’s policymakers as they seek to fuel an economy that is running out of steam. Beijing has for years come under pressure to introduce much-needed reforms to the country's infrastructure and lumbering state-owned enterprises as part of a drive to tackle a burdensome debt mountain and transform its growth engine from investment and exports to domestic consumption. But Gene Fang from rating agency Moody’s told AFP: "When trade-offs between reforms and growth arise, we expect that the priority will more often be given to supporting growth." Ten years ago China unleashed the full power of its financial arsenal by introducing massive stimulus measures, which helped Beijing avert the worst of the financial crisis engulfing the rest of the world. However, that helped sow the seeds of today's economic troubles, with debt at alarming levels and necessary economic reforms not addressed as leaders focused on maintaining stable growth and employment. Now, with the global economy stuttering, a slowdown in key export markets is denting a crucial source of income while the country is also struggling with a plethora of structural problems such as ageing -- and now shrinking -- population, a dwindling pool of rural workers, overcapacity and air pollution. 'Debt mess' And then there is the trade war with the United States, which has magnified the problems while sending shudders through global markets. "The Chinese economy is struggling, the debt mess is unresolved and the impact from the US tariffs has barely begun," said Bill Bishop, an expert on China, who added the Communist Party will do "everything it can to juice the economy" with "multiple forms of stimuli". "Whether or not significant economic reforms will now also be forthcoming, and not just more promises, is the trillion-dollar question," he said. Xi and US President Donald Trump may have agreed on a temporary truce in their multi-billion-dollar stand-off -- and Beijing Friday announced face-to-face talks will begin next week -- but there is little optimism the row will be brought to an end any time soon. In the absence of a breakthrough in current negotiations, "the US-China trade conflict will weigh on growth in China and on the wider Asia-Pacific region, via a slowdown in Chinese demand", according to analysts Oxford Economics. The impact of the trade row came into full view this week when Apple announced a shock cut in its revenue forecast for the December quarter blaming the steeper-than-expected "economic deceleration" in China and emerging markets and citing the China-US frictions. While analysts still believe China -- which last month celebrated 40 years since opening up to the world -- should still achieve its growth target of 6.5 per cent for 2018, that would be the weakest rate in almost three decades. That after an average growth rate of 9.7 per cent a year between 1978 and 2015. Long-term goal Raymond Deng, an analyst at Singapore-based DBS Bank, said the government must raise domestic consumption and inject "sufficient" cash into the market, while "eliminating state-owned enterprises with backward production capacity". But with a debt crisis brewing, authorities have decided against the 2008-like stimulus, instead opting for a series of separate measures including making it easier for banks to lend and much-hyped tax cuts. Some sectors saw a one per cent drop in VAT and taxpayers will in 2019 benefit from deductions in education, critical healthcare and mortgage repayments, while the rate at which tax kicks in has also been raised. "If the tax reduction plan is implemented well, it cannot only boost corporate profits and household consumption in the short term but also improve the economic structure in the long run," said Zhu Chaoping, a strategist at JPMorgan Asset Management. Meanwhile, Beijing University economics professor Su Jian believes support for consumption requires a rise and a "better distribution" of household income, as well as increased health, education and social support to steer people away from precautionary saving. He also points out that China's GDP per capita is about one-eighth of that of the United States. "The development margin is still large... the GDP can still grow seven per cent for 20 years," he said. However, for many economists, wealth generation could continue to weaken. Zhu expected "a GDP increase of around five per cent across the next 10 to 15 years", while Capital Economics expected the growth rate to even decline to two per cent by 2030.

China could put reforms on hold to boost economy: Report

Chinese Premier Li Keqiang said on Monday Beijing will further open up its economy in the face of rising protectionism, as he headed for meetings with Asia-Pacific leaders in Singapore that are expected to focus on trade tensions.

Li's remarks in an article in Singapore's Straits Times newspaper, ahead of his arrival in the city-state later in the day, came as Singapore's Prime Minister Lee Hsien Loong called for more regional integration, saying multilateralism was under threat from political pressures.

"China has opened its door to the world; we will never close it but open it even wider," Li said in the article, in which he called for an "open world economy" in the face of "rising protectionism and unilateralism". He did not directly refer to China's bruising trade war with the United States.

Notably absent from this week's meetings is US President Donald Trump, who has said several existing multilateral trade deals are unfair, and has railed against China over intellectual property theft, entry barriers to US businesses and a gaping trade deficit.

Vice President Mike Pence will attend instead of Trump, and Russian President Vladimir Putin, Indian Prime Minister Narendra Modi and Japanese Prime Minister Shinzo Abe are among those also expected to join Li and the ten-member member Association of Southeast Asian Nations (ASEAN).

It was not clear if Li and Pence will hold separate talks on the sidelines of the meetings, which would be a prelude to a summit scheduled between Trump and Chinese President Xi Jinping at the end of the month in Buenos Aires.

The encounter, if it happens, would come on the heels of high-level talks in Washington where the two sides aired their main differences but appeared to attempt controlling the damage to relations that has worsened with tit-for-tat tariffs in recent months.

Meanwhile, in remarks at a business summit on Monday ahead of this week's meetings, Singapore PM Lee said:

"ASEAN has great potential, but fully realising it depends on whether we choose to become more integrated, and work resolutely towards this goal in a world where multilateralism is fraying under political pressures".

Lee has previously warned that the US-China trade war could have a "big, negative impact" on Singapore, and the city-state's central bank has warned it could soon drag on the economy.

Both Singapore and China are expected to rally support for the Regional Comprehensive Economic Partnership (RCEP) pact now being negotiated, showcased to be the free trade deal that will encompass more than a third of the world's GDP.

The pact includes 16 countries, including China, India, Japan and South Korea, but not the United States. Li said China would work to "expedite" RCEP negotiations this week.

Also on Monday, the ten-member ASEAN group reached their first ever deal on e-commerce aimed at helping boost cross-border transactions in the region.

Chinese Premier Li Keqiang said on Monday Beijing will further open up its economy in the face of rising protectionism, as he headed for meetings with Asia-Pacific leaders in Singapore that are expected to focus on trade tensions.

Chinese Premier Li Keqiang said on Monday Beijing will further open up its economy in the face of rising protectionism, as he headed for meetings with Asia-Pacific leaders in Singapore that are expected to focus on trade tensions. Li's remarks in an article in Singapore's Straits Times newspaper, ahead of his arrival in the city-state later in the day, came as Singapore's Prime Minister Lee Hsien Loong called for more regional integration, saying multilateralism was under threat from political pressures. "China has opened its door to the world; we will never close it but open it even wider," Li said in the article, in which he called for an "open world economy" in the face of "rising protectionism and unilateralism". He did not directly refer to China's bruising trade war with the United States. Notably absent from this week's meetings is US President Donald Trump, who has said several existing multilateral trade deals are unfair, and has railed against China over intellectual property theft, entry barriers to US businesses and a gaping trade deficit. Vice President Mike Pence will attend instead of Trump, and Russian President Vladimir Putin, Indian Prime Minister Narendra Modi and Japanese Prime Minister Shinzo Abe are among those also expected to join Li and the ten-member member Association of Southeast Asian Nations (ASEAN). It was not clear if Li and Pence will hold separate talks on the sidelines of the meetings, which would be a prelude to a summit scheduled between Trump and Chinese President Xi Jinping at the end of the month in Buenos Aires. The encounter, if it happens, would come on the heels of high-level talks in Washington where the two sides aired their main differences but appeared to attempt controlling the damage to relations that has worsened with tit-for-tat tariffs in recent months. Meanwhile, in remarks at a business summit on Monday ahead of this week's meetings, Singapore PM Lee said: "ASEAN has great potential, but fully realising it depends on whether we choose to become more integrated, and work resolutely towards this goal in a world where multilateralism is fraying under political pressures". Lee has previously warned that the US-China trade war could have a "big, negative impact" on Singapore, and the city-state's central bank has warned it could soon drag on the economy. Both Singapore and China are expected to rally support for the Regional Comprehensive Economic Partnership (RCEP) pact now being negotiated, showcased to be the free trade deal that will encompass more than a third of the world's GDP. The pact includes 16 countries, including China, India, Japan and South Korea, but not the United States. Li said China would work to "expedite" RCEP negotiations this week. Also on Monday, the ten-member ASEAN group reached their first ever deal on e-commerce aimed at helping boost cross-border transactions in the region.

China says will further open up its economy, slams rising protectionism

US-educated Yi Gang, a reform-minded deputy governor of the People&#39;s Bank of China, was nominated on Monday to take over the reins of the central bank.

Yi, who taught at Indiana University before returning to China, was the only nominee for the governor post ahead of a vote by the rubber-stamp National People&#39;s Congress later Monday.

Another American-educated official, President Xi Jinping&#39;s top economic adviser Liu He, was nominated for a position as vice premier.

Both men speak fluent English and have pushed for economic reforms.

While at the PBOC, Yi called for the further internationalisation of China&#39;s currency and greater market access for foreign investors.

At a press conference earlier in the annual parliamentary session, Yi said the central bank would work to push through reforms that will bring about &quot;equal treatment for domestic and foreign investors.&quot;

A shakeup in China&#39;s bureaucracy announced last week will give the central bank more power to push through such reforms.

The bank was given the responsibility of drafting new laws and regulations for the banking and insurance sectors, giving the PBOC new authority over China&#39;s financial system.

An economic reformer, Yi studied in the US and earned a tenured position at Indiana University before returning to China to take a position at Peking University.

From there he moved to the central bank and rose within its ranks under Zhou Xiaochuan, who has led the bank for more than a decade, providing stability for China&#39;s monetary policy.

Yi, who taught at Indiana University before returning to China, was the only nominee for the governor post ahead of a vote by the rubber-stamp National People's Congress later Monday

US-educated Yi Gang, a reform-minded deputy governor of the People's Bank of China, was nominated on Monday to take over the reins of the central bank. Yi, who taught at Indiana University before returning to China, was the only nominee for the governor post ahead of a vote by the rubber-stamp National People's Congress later Monday. Another American-educated official, President Xi Jinping's top economic adviser Liu He, was nominated for a position as vice premier. Both men speak fluent English and have pushed for economic reforms. While at the PBOC, Yi called for the further internationalisation of China's currency and greater market access for foreign investors. At a press conference earlier in the annual parliamentary session, Yi said the central bank would work to push through reforms that will bring about "equal treatment for domestic and foreign investors." A shakeup in China's bureaucracy announced last week will give the central bank more power to push through such reforms. The bank was given the responsibility of drafting new laws and regulations for the banking and insurance sectors, giving the PBOC new authority over China's financial system. An economic reformer, Yi studied in the US and earned a tenured position at Indiana University before returning to China to take a position at Peking University. From there he moved to the central bank and rose within its ranks under Zhou Xiaochuan, who has led the bank for more than a decade, providing stability for China's monetary policy.

China names reform-minded Yi Gang to lead central bank

Two decades of China&#39;s economic growth has brought the good life to millions of its citizens.

The country&#39;s per capita income is over $15,000. Its literacy rates top 96 per cent. There has been a huge progress in health and sanitation. Any first time visitor to China cannot but be impressed by the world-class infrastructure evident in cities like Beijing and Shanghai. For that matter, even tier two cities like Dongguan in the south-east boast of well-planned roads, commercial and residential districts. &nbsp;

However, challenges remain for the Chinese government which is struggling to ensure job creation and keep the standards of living high.&nbsp;The gap between the rich and poor is also widening and remains a cause for concern.

Millions of workers in traditional industries like iron and steel and coal are being laid off. The minimum wage has been rising steadily over the last decade but substantial regional differences remain. &nbsp; &nbsp;

New workers are poorly paid. They are offered no security or benefits.&nbsp; 
&nbsp; 
In 2016, nearly eight million graduates entered the job market with high expectations but dim prospects of getting a well-paying job.

The education system does not prepare students for employment. Vocational schools don&#39;t measure up to demands of the marketplace.

China&#39;s economy is moving away from mass production of low-tech products like toothbrushes, cheap electronics, toys and to higher-value, higher technology products. This is where the United States and Europe currently dominate and the entry of China into this segment means more competition, better quality, even lower prices.

But it&#39;s not clear which country or whose people will benefit.&nbsp; 
&nbsp; 
&nbsp;

 
&nbsp;

Millions of workers in traditional industries like iron and steel and coal are being laid off. The minimum wage has been rising steadily over the last decade but substantial regional differences remain.

Two decades of China's economic growth has brought the good life to millions of its citizens. The country's per capita income is over $15,000. Its literacy rates top 96 per cent. There has been a huge progress in health and sanitation. Any first time visitor to China cannot but be impressed by the world-class infrastructure evident in cities like Beijing and Shanghai. For that matter, even tier two cities like Dongguan in the south-east boast of well-planned roads, commercial and residential districts. However, challenges remain for the Chinese government which is struggling to ensure job creation and keep the standards of living high. The gap between the rich and poor is also widening and remains a cause for concern. Millions of workers in traditional industries like iron and steel and coal are being laid off. The minimum wage has been rising steadily over the last decade but substantial regional differences remain. New workers are poorly paid. They are offered no security or benefits. In 2016, nearly eight million graduates entered the job market with high expectations but dim prospects of getting a well-paying job. The education system does not prepare students for employment. Vocational schools don't measure up to demands of the marketplace. China's economy is moving away from mass production of low-tech products like toothbrushes, cheap electronics, toys and to higher-value, higher technology products. This is where the United States and Europe currently dominate and the entry of China into this segment means more competition, better quality, even lower prices. But it's not clear which country or whose people will benefit.

China gets richer, but inequality grows

China needs to let local governments take responsibility for their finances, including allowing bankruptcies, as part of an effort to defuse their debt risks, a central bank official wrote on Monday.

Central government control of the scale of local government bonds should be eliminated, while responsibility to issue and repay bonds should be held by the city or county that will actually use the funds, Xu Zhong, head of the People&#39;s Bank of China&#39;s research bureau, wrote in a an editorial on the financial news website Yicai.

&quot;Eliminate central government control on the scale of local government bond issues, expand the scale of local government debt issues,&quot; Xu wrote.

&quot;Whether (bonds) can be issued, and at what price, must be examined and screened by the financial markets. There does not need to be worry about local governments chaotically issuing debt.&quot;

China&#39;s top leadership decided at a meeting this week to take concrete measures to strengthen the regulation of local government debt next year as policymakers look to rein in a massive debt pile and reduce financial risks facing the economy.

The government needs to clarify responsibility as it explores a bankruptcy system for local governments, Xu wrote, as there is still an expectation that the central government will bail out those that run into fiscal problems.

&quot;China must have an example like the bankruptcy in Detroit. Only if we allow local state-owned firms and governments to go bankrupt will investors believe the central government will break the implicit guarantee,&quot; Xu wrote, adding that social services should be maintained.

The United States city of Detroit filed the largest-ever municipal bankruptcy in July 2013, with $18 billion of debt.

Xu also said that China should dismantle the hukou system of internal migration control, as free movement of people promoted equal access to public services and helped resolve imbalances in finances.

In a report published on Saturday, China`s National Audit Office said China should dispel the &quot;illusion&quot; that the central government will pick up the bill for local government debt.

But China should also increase the limit for local government debt as general government debt is primarily used for poverty relief spending, while also controlling spending on new projects.

&quot;Financial institutions must not provide financing to projects without a source of stable operating cash flow or that do not have compliant collateral,&quot; the office said.

China's top leadership decided this week to take concrete measures to strengthen the regulation of local government debt next year as policymakers look to rein in a massive debt pile and reduce financial risks facing the economy.

China needs to let local governments take responsibility for their finances, including allowing bankruptcies, as part of an effort to defuse their debt risks, a central bank official wrote on Monday. Central government control of the scale of local government bonds should be eliminated, while responsibility to issue and repay bonds should be held by the city or county that will actually use the funds, Xu Zhong, head of the People's Bank of China's research bureau, wrote in a an editorial on the financial news website Yicai. "Eliminate central government control on the scale of local government bond issues, expand the scale of local government debt issues," Xu wrote. "Whether (bonds) can be issued, and at what price, must be examined and screened by the financial markets. There does not need to be worry about local governments chaotically issuing debt." China's top leadership decided at a meeting this week to take concrete measures to strengthen the regulation of local government debt next year as policymakers look to rein in a massive debt pile and reduce financial risks facing the economy. The government needs to clarify responsibility as it explores a bankruptcy system for local governments, Xu wrote, as there is still an expectation that the central government will bail out those that run into fiscal problems. "China must have an example like the bankruptcy in Detroit. Only if we allow local state-owned firms and governments to go bankrupt will investors believe the central government will break the implicit guarantee," Xu wrote, adding that social services should be maintained. The United States city of Detroit filed the largest-ever municipal bankruptcy in July 2013, with $18 billion of debt. Xu also said that China should dismantle the hukou system of internal migration control, as free movement of people promoted equal access to public services and helped resolve imbalances in finances. In a report published on Saturday, China`s National Audit Office said China should dispel the "illusion" that the central government will pick up the bill for local government debt. But China should also increase the limit for local government debt as general government debt is primarily used for poverty relief spending, while also controlling spending on new projects. "Financial institutions must not provide financing to projects without a source of stable operating cash flow or that do not have compliant collateral," the office said.

China needs Detroit-style bankruptcy as debt problems remain: Central bank official

China has lowered this year&#39;s GDP target to &quot;around 6.5 per cent&quot; -- its lowest in decades -- as the economy faces a clump&nbsp;of challenges, most notably the flickering light on export-led growth.

This year&#39;s economic growth target is lower than the previous year, when the world&#39;s second-largest economy looked to grow between 6.5 and 7 per cent.

The economy finally gre at 6.7 per cent, the lowest growth rate since 1990.

The detailed&nbsp;report will be rubber-stamped by China&#39;s&nbsp;Premier Li Keqiang beginning at 9 am (0100 GMT).

&quot;GDP is projected to grow by 6.5 percent approximately, however in practice, we will strive for better,&rdquo; according to a copy of Li&#39;s planned address to the National People&#39;s Congress (NPC), the Communist Party-controlled legislature.&nbsp;

Li&#39;s remarks said the target was still sufficient to meet the Communist Party&#39;s target of doubling the size of the economy by 2020, compared to 2010.

The NPC brings together thousands of politicians from across China, touted by the ruling party as proof that it answers to the people despite a monopoly on power, and is used to outline top national priorities and policies.

The target came in slightly below the expectations of analysts in a sign that authorities are prioritising risk control over short-term growth rates.&nbsp;&nbsp;

China is trying to pivot from hyper-fast growth based on investment and exports towards a steadier consumer-driven model.

But the transition is complicated by slowing growth, a slumping currency, massive capital flight by Chinese enterprises seeking better returns abroad, and fears of a housing bubble and bad-loan crisis.

The government report also set an inflation target of &quot;around 3 percent&quot; for the year.&nbsp;

(WION with inputs from AFP)

The target, detailed in a report to be presented to the Chinese parliament later in the day, is lower than last year's range of 6.5 to 7%

China has lowered this year's GDP target to "around 6.5 per cent" -- its lowest in decades -- as the economy faces a clump of challenges, most notably the flickering light on export-led growth. This year's economic growth target is lower than the previous year, when the world's second-largest economy looked to grow between 6.5 and 7 per cent. The economy finally gre at 6.7 per cent, the lowest growth rate since 1990. The detailed report will be rubber-stamped by China's Premier Li Keqiang beginning at 9 am (0100 GMT). "GDP is projected to grow by 6.5 percent approximately, however in practice, we will strive for better,” according to a copy of Li's planned address to the National People's Congress (NPC), the Communist Party-controlled legislature. Li's remarks said the target was still sufficient to meet the Communist Party's target of doubling the size of the economy by 2020, compared to 2010. The NPC brings together thousands of politicians from across China, touted by the ruling party as proof that it answers to the people despite a monopoly on power, and is used to outline top national priorities and policies. The target came in slightly below the expectations of analysts in a sign that authorities are prioritising risk control over short-term growth rates. China is trying to pivot from hyper-fast growth based on investment and exports towards a steadier consumer-driven model. But the transition is complicated by slowing growth, a slumping currency, massive capital flight by Chinese enterprises seeking better returns abroad, and fears of a housing bubble and bad-loan crisis. The government report also set an inflation target of "around 3 percent" for the year. (WION with inputs from AFP)

China lowers growth target to 'around 6.5%'

China&#39;s economy sprang a surprise in its last quarter as the economy grew at more-than-expected 6.8 per cent on year driven by government spending and record bank lending, Reuters reported.

The economy expanded at 6.7 per cent in 2016, according to the National Bureau of Statistics, roughly in the middle of the government&#39;s 6.5-7 per cent growth target but still the slowest pace in 26 years.

But Beijing&#39;s decision to double down on spending to meet its official growth target may have come at a high price, as policymakers will have their hands full this year trying to defuse financial risks created by an explosive growth in debt.

The world&#39;s second-largest economy also faces increased uncertainties from a cooling housing market and the government&#39;s bid to push through painful structural reforms, which could help deal with the root-cause of rising debt and housing problems but weigh on near-term growth.

Economists polled by Reuters had expected China would report 6.7 per cent growth for both the fourth quarter and the full year.&nbsp;

The economy grew 6.7 per cent in the third quarter.

While China is on more solid economic footing than this time last year, it faces increasing uncertainties in 2017, with a housing frenzy showing signs of cooling and the impact of previous stimulus measures expected to fade.

China&#39;s sluggish exports also could come under fresh pressure if US President-elect Donald Trump follows through on pledges to impose tough protectionist measures.

&quot;While Chinese growth looks stable into early 2017, a more marked slowdown by the second quarter appears inevitable,&quot; Gene Frieda, global emerging markets strategist at asset management giant PIMCO, said in a note this week.

The head of economic planning said last week that conditions have been generally stable at the start of 2017, continuing the &quot;steadying and good&quot; momentum from the second half of 2016.&nbsp;

Amid those reassuring signs of stabilisation, policy sources told Reuters that China&#39;s leaders will lower their economic growth target to around 6.5 percent this year, giving them more room to push reforms to contain debt risks.

(Reuters)

China's exports could come under pressure if US President-elect Trump follows through on his pledge to impose protectionist measures

China's economy sprang a surprise in its last quarter as the economy grew at more-than-expected 6.8 per cent on year driven by government spending and record bank lending, Reuters reported. The economy expanded at 6.7 per cent in 2016, according to the National Bureau of Statistics, roughly in the middle of the government's 6.5-7 per cent growth target but still the slowest pace in 26 years. But Beijing's decision to double down on spending to meet its official growth target may have come at a high price, as policymakers will have their hands full this year trying to defuse financial risks created by an explosive growth in debt. The world's second-largest economy also faces increased uncertainties from a cooling housing market and the government's bid to push through painful structural reforms, which could help deal with the root-cause of rising debt and housing problems but weigh on near-term growth. Economists polled by Reuters had expected China would report 6.7 per cent growth for both the fourth quarter and the full year. The economy grew 6.7 per cent in the third quarter. While China is on more solid economic footing than this time last year, it faces increasing uncertainties in 2017, with a housing frenzy showing signs of cooling and the impact of previous stimulus measures expected to fade. China's sluggish exports also could come under fresh pressure if US President-elect Donald Trump follows through on pledges to impose tough protectionist measures. "While Chinese growth looks stable into early 2017, a more marked slowdown by the second quarter appears inevitable," Gene Frieda, global emerging markets strategist at asset management giant PIMCO, said in a note this week. The head of economic planning said last week that conditions have been generally stable at the start of 2017, continuing the "steadying and good" momentum from the second half of 2016. Amid those reassuring signs of stabilisation, policy sources told Reuters that China's leaders will lower their economic growth target to around 6.5 percent this year, giving them more room to push reforms to contain debt risks. (Reuters)

China's GDP grows at 6.8% in Q4 buoyed by govt spending, bank credit

China&#39;s factory price deflation moderated further in July, with prices falling at their slowest pace in two years, taking pressure off the central bank to cut rates as policymakers turn their focus to structural reforms and ballooning credit. 
 
A government-led building spree has increased demand for construction materials, but higher prices are also due in part to speculation in China&#39;s commodities futures market, which has pushed up Shanghai rebar futures up by 50 per cent this year.&nbsp; 
 
The producer price index (PPI) fell 1.7 per cent in July from a year ago, the National Bureau of Statistics said today, smaller than June&#39;s 2.6 per cent decline. Analysts expect producer price inflation to turn positive this year for the first time in more than four years, but the recovery at the factory gate is unlikely to lead to a rebound in private investment, which has fallen to record low growth rates. 
 
&quot;The improvement of PPI should benefit the corporate sector&#39;s profitability, but is unlikely to encourage private sector investment, as the main beneficiaries are heavy industries &ndash; which are dominated by state-owned enterprises,&quot; said ANZ economists in a note. 
 
Non-ferrous metals prices rose 2.8 per cent month-on-month in July, while steel prices increased 0.4 per cent.&nbsp; 
 
Downstream prices, however, remained subdued in July with the consumer price inflation accelerating at its weakest pace in six months as food price gains slowed. 
 
The consumer price index (CPI) rose 1.8 per cent in July from a year earlier, compared with a 1.9 per cent increase in June, and matching this year`s low hit in January. Analysts polled by Reuters had expected a 1.8 per cent gain. 
 
Consumer inflation has remained well below China&#39;s official target of around three&nbsp;per cent in 2016, despite concerns that severe summer flooding, which has disrupted public infrastructure and agricultural production, would increase inflationary pressures. 
 
Food prices continued to moderate, rising 3.3 per cent in July compared with a 4.6 per cent gain in June. Prices of pork rose only 16.1 per cent versus a 30.1 pe rcent increase in June as demand for the Chinese staple meat continued to cool from peaks hit earlier this year. 
 
Non-food inflation, however, rose 1.4 per cent, compared with June&#39;s 1.2 per cent gain.&nbsp; 
 
Healthcare costs rose 4.3 per cent year-on-year in July, up from a 3.8 per cent gain in June, which Merchants Securities economist Yan Ling in Shenzhen said reflects a wider improvement in demand for such products. 
 
Similarly, rises in other price categories showed increasing demand for a wider range of consumer goods and services including horticulture, pet care, and retirement services, Yan said. 
 
Low inflation means Beijing has room to loosen monetary policy if needed, but policymakers appear to have disparate views over how much stimulus is needed to stoke economic growth, if any, and what form it should take. 
 
However, strengthening producer prices mean there is likely less need to ease in the short-term, analysts say. China&#39;s central bank has not adjusted interest rates since October 2015. 
 
&quot;Policymakers are likely to focus their attention on more pressing issues, such as addressing credit risks and structural imbalances,&quot; Julian Evans-Pritchard at Capital Economics said in a note.&nbsp; 
 
(Reuters)

Analysts expect producer price inflation to turn positive this year for the first time in more than four years

China's factory price deflation moderated further in July, with prices falling at their slowest pace in two years, taking pressure off the central bank to cut rates as policymakers turn their focus to structural reforms and ballooning credit. A government-led building spree has increased demand for construction materials, but higher prices are also due in part to speculation in China's commodities futures market, which has pushed up Shanghai rebar futures up by 50 per cent this year. The producer price index (PPI) fell 1.7 per cent in July from a year ago, the National Bureau of Statistics said today, smaller than June's 2.6 per cent decline. Analysts expect producer price inflation to turn positive this year for the first time in more than four years, but the recovery at the factory gate is unlikely to lead to a rebound in private investment, which has fallen to record low growth rates. "The improvement of PPI should benefit the corporate sector's profitability, but is unlikely to encourage private sector investment, as the main beneficiaries are heavy industries – which are dominated by state-owned enterprises," said ANZ economists in a note. Non-ferrous metals prices rose 2.8 per cent month-on-month in July, while steel prices increased 0.4 per cent. Downstream prices, however, remained subdued in July with the consumer price inflation accelerating at its weakest pace in six months as food price gains slowed. The consumer price index (CPI) rose 1.8 per cent in July from a year earlier, compared with a 1.9 per cent increase in June, and matching this year`s low hit in January. Analysts polled by Reuters had expected a 1.8 per cent gain. Consumer inflation has remained well below China's official target of around three per cent in 2016, despite concerns that severe summer flooding, which has disrupted public infrastructure and agricultural production, would increase inflationary pressures. Food prices continued to moderate, rising 3.3 per cent in July compared with a 4.6 per cent gain in June. Prices of pork rose only 16.1 per cent versus a 30.1 pe rcent increase in June as demand for the Chinese staple meat continued to cool from peaks hit earlier this year. Non-food inflation, however, rose 1.4 per cent, compared with June's 1.2 per cent gain. Healthcare costs rose 4.3 per cent year-on-year in July, up from a 3.8 per cent gain in June, which Merchants Securities economist Yan Ling in Shenzhen said reflects a wider improvement in demand for such products. Similarly, rises in other price categories showed increasing demand for a wider range of consumer goods and services including horticulture, pet care, and retirement services, Yan said. Low inflation means Beijing has room to loosen monetary policy if needed, but policymakers appear to have disparate views over how much stimulus is needed to stoke economic growth, if any, and what form it should take. However, strengthening producer prices mean there is likely less need to ease in the short-term, analysts say. China's central bank has not adjusted interest rates since October 2015. "Policymakers are likely to focus their attention on more pressing issues, such as addressing credit risks and structural imbalances," Julian Evans-Pritchard at Capital Economics said in a note. (Reuters)

China's slowing wholesale deflation takes pressure off central bank

Activity in China&#39;s manufacturing sector eased unexpectedly in July as orders cooled and flooding disrupted business, an official survey showed, adding to fears the economy will slow in coming months unless the government steps up a huge spending spree. 
 
While a similar private survey showed business picked up for the first time in 17 months, the increase was only slight and the much larger official survey on Monday suggested China&#39;s overall industrial activity remains sluggish at best. 
 
Both surveys showed persistently weak demand at home and abroad were forcing companies to continue to shed jobs, even as Beijing vows to shut more industrial overcapacity that could lead to larger layoffs. 
 
And other readings on Monday pointed to signs of cooling in both the construction industry and real estate, which were key drivers behind better-than-expected economic growth in the second quarter. 
 
The official Purchasing Managers&#39; Index (PMI) eased to 49.9 in July from the previous month&#39;s 50.0 and below the 50-point mark that separates growth from contraction on a monthly basis. 
 
Analysts polled by Reuters predicted a level of 50.0. 
 
While the July reading showed only a slight loss of momentum, Nomura&#39;s chief China economist Yang Zhao said it may be a sign that the impact of stimulus measures earlier this year may already be wearing off. 
 
That has created a dilemma for Beijing as the Communist Party seeks to deliver on official targets, even as concerns grow about the risks of prolonged, debt-fuelled stimulus. 
 
&quot;The government has realised the downward pressure is great but they&#39;ve also realised that stimulus to stimulate the economy continuously is not a good idea and they want to continue to focus on reform and deleveraging,&quot; Zhao said. 
 
Heavy flooding, particularly along the Yangtze River, contributed to July&#39;s manufacturing contraction along with slowing demand and the cutting of overcapacity in some industries, the statistics bureau said. 
 
Falling activity at smaller firms also was a key reason for July&#39;s poor figure, the statistics bureau said, but performance at larger companies improved, in a sign that the government is becoming more reliant on big state firms to generate growth. 
 
Bumpy Outlook 
 
&quot;Today&#39;s data do not bode well for GDP growth in the second half,&quot; ANZ economists Louis Lam and David Qu wrote in a note. 
 
Fiscal policy would be the key tool for boosting growth in coming months, while the central bank was expected to keep its policy settings accommodative, they added. 
 
While many analysts believe the world&#39;s second-largest economy may be slowly stabilising, conditions still look patchy. 
 
Industrial profits rose at the fastest pace in three months in June, but gains were concentrated in just a few industries including electronics, steel and oil processing. 
 
Spurred by rebounding prices and stronger construction demand, China&#39;s steel output and exports have been near record levels. But it one of the key sectors being targeted by officials for capacity cuts and tougher pollution controls. 
 
Indeed, the PMI showed factory output in July still expanded solidly, though the pace cooled to 52.1 from 52.5 in June. 
 
Total new orders hovered just inside expansionary territory at 50.4, slightly down from June, but new export orders contracted as overseas demand remains weak and the impact of Britain&#39;s vote to leave the European Union hurt sentiment. 
 
A private PMI survey by Caixin/Markit was more mixed. 
 
Its 50.6 reading was stronger than expected and the first expansion since February 2015, sparking hopes that some of the government&#39;s stimulus was starting to trickle down to smaller private firms which have been under greater stress than larger state-backed enterprises. 
 
But overall order growth was modest and export orders continued to fall. 
 
The Caixin report tends to give more weight to light industry, whereas the official survey is skewed more toward heavy industries, said Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group, according to Caixin. 
 
An official survey on the services sector was more upbeat, showing growth accelerated to 53.9 in July from 53.7 in June. 
 
But it, too, contained several worrying notes, with construction services growth solid but cooling and the property services sector weakening, adding to worries that China&#39;s housing boom may have peaked. 
 
Beijing has been counting on a strong services sector to pick up the slack as it tries to shift the economy away from a dependence on heavy industry and manufacturing exports. 
 
(Reuters)

Flooding has disrupted business, adding to fears the economy will slow in coming months unless the government steps up a huge spending spree

Activity in China's manufacturing sector eased unexpectedly in July as orders cooled and flooding disrupted business, an official survey showed, adding to fears the economy will slow in coming months unless the government steps up a huge spending spree. While a similar private survey showed business picked up for the first time in 17 months, the increase was only slight and the much larger official survey on Monday suggested China's overall industrial activity remains sluggish at best. Both surveys showed persistently weak demand at home and abroad were forcing companies to continue to shed jobs, even as Beijing vows to shut more industrial overcapacity that could lead to larger layoffs. And other readings on Monday pointed to signs of cooling in both the construction industry and real estate, which were key drivers behind better-than-expected economic growth in the second quarter. The official Purchasing Managers' Index (PMI) eased to 49.9 in July from the previous month's 50.0 and below the 50-point mark that separates growth from contraction on a monthly basis. Analysts polled by Reuters predicted a level of 50.0. While the July reading showed only a slight loss of momentum, Nomura's chief China economist Yang Zhao said it may be a sign that the impact of stimulus measures earlier this year may already be wearing off. That has created a dilemma for Beijing as the Communist Party seeks to deliver on official targets, even as concerns grow about the risks of prolonged, debt-fuelled stimulus. "The government has realised the downward pressure is great but they've also realised that stimulus to stimulate the economy continuously is not a good idea and they want to continue to focus on reform and deleveraging," Zhao said. Heavy flooding, particularly along the Yangtze River, contributed to July's manufacturing contraction along with slowing demand and the cutting of overcapacity in some industries, the statistics bureau said. Falling activity at smaller firms also was a key reason for July's poor figure, the statistics bureau said, but performance at larger companies improved, in a sign that the government is becoming more reliant on big state firms to generate growth. Bumpy Outlook "Today's data do not bode well for GDP growth in the second half," ANZ economists Louis Lam and David Qu wrote in a note. Fiscal policy would be the key tool for boosting growth in coming months, while the central bank was expected to keep its policy settings accommodative, they added. While many analysts believe the world's second-largest economy may be slowly stabilising, conditions still look patchy. Industrial profits rose at the fastest pace in three months in June, but gains were concentrated in just a few industries including electronics, steel and oil processing. Spurred by rebounding prices and stronger construction demand, China's steel output and exports have been near record levels. But it one of the key sectors being targeted by officials for capacity cuts and tougher pollution controls. Indeed, the PMI showed factory output in July still expanded solidly, though the pace cooled to 52.1 from 52.5 in June. Total new orders hovered just inside expansionary territory at 50.4, slightly down from June, but new export orders contracted as overseas demand remains weak and the impact of Britain's vote to leave the European Union hurt sentiment. A private PMI survey by Caixin/Markit was more mixed. Its 50.6 reading was stronger than expected and the first expansion since February 2015, sparking hopes that some of the government's stimulus was starting to trickle down to smaller private firms which have been under greater stress than larger state-backed enterprises. But overall order growth was modest and export orders continued to fall. The Caixin report tends to give more weight to light industry, whereas the official survey is skewed more toward heavy industries, said Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group, according to Caixin. An official survey on the services sector was more upbeat, showing growth accelerated to 53.9 in July from 53.7 in June. But it, too, contained several worrying notes, with construction services growth solid but cooling and the property services sector weakening, adding to worries that China's housing boom may have peaked. Beijing has been counting on a strong services sector to pick up the slack as it tries to shift the economy away from a dependence on heavy industry and manufacturing exports. (Reuters)

China manufacturing activity eases unexpectedly

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