China's economy likely grew at the slowest pace in 1-1/2 years in the fourth quarter, dragged by weaker demand due to a property downturn, curbs on debt and strict COVID-19 measures, raising heat on policymakers to roll out more easing steps.

Data on Monday is expected to show gross domestic product (GDP) grew 3.6% in October-December from a year earlier - the weakest pace since the second quarter of 2020 and slowing from 4.9% in the third quarter, a Reuters poll showed.

On a quarterly basis, growth is forecast to rise to 1.1% in the fourth quarter from 0.2% in July-September.

For 2021, GDP likely expanded 8.0%, which would be the highest annual growth in a decade, partly due to the low base set in 2020, when the economy was jolted by COVID-19 and stringent lockdowns.

The government is due to release the GDP data, along with December activity data, on Monday at 0200 GMT.

The world's second-largest economy, which cooled over the course of last year, faces multiple headwinds in 2022, including persistent property weakness and a fresh challenge from the recent local spread of the highly-contagious Omicron variant.

Exports, which were one of the few areas of strength in 2021, are also expected to slow, while the government is seen continuing its clampdown on industrial emissions.

Policymakers have vowed to head off a sharper slowdown, ahead of a key Communist Party Congress late this year.

The central bank is set to unveil more easing steps, though it will likely favour injecting more cash into the economy rather than cutting interest rates too aggressively, policy insiders and economists said.&nbsp;read more

Analysts polled by Reuters expect the central bank to deliver more modest easing steps, including cutting banks' reserve requirement ratios the one-year loan prime rate (LPR) - the benchmark lending rate.

Analysts at ANZ said in a note that they saw a possibility that the central bank will cut the rate on its medium-term lending facility (MLF) on Monday.

Policymakers have also pledged to step up fiscal support for the economy, speeding up local government special bond issuance to spur infrastructure investment and planning more tax cuts.

"We might see a larger effect of the monetary and fiscal easing only in the second half of 2022 due to the transmission lags of these policies," analysts at Natixis said in a note.

"The recent monetary easing and the stabilization of PMI (factory activity) have indicated such a direction, but more efforts are needed to boost fixed asset investment."

Growth is likely to slow to 5.2% in 2022, according to the poll.

China's economy likely grew at the slowest pace in 1-1/2 years in the fourth quarter, dragged by weaker demand due to a property downturn, curbs on debt and strict COVID-19 measures, raising heat on policymakers to roll out more easing steps.

China's economy likely grew at the slowest pace in 1-1/2 years in the fourth quarter, dragged by weaker demand due to a property downturn, curbs on debt and strict COVID-19 measures, raising heat on policymakers to roll out more easing steps. Data on Monday is expected to show gross domestic product (GDP) grew 3.6% in October-December from a year earlier - the weakest pace since the second quarter of 2020 and slowing from 4.9% in the third quarter, a Reuters poll showed. On a quarterly basis, growth is forecast to rise to 1.1% in the fourth quarter from 0.2% in July-September. For 2021, GDP likely expanded 8.0%, which would be the highest annual growth in a decade, partly due to the low base set in 2020, when the economy was jolted by COVID-19 and stringent lockdowns. The government is due to release the GDP data, along with December activity data, on Monday at 0200 GMT. The world's second-largest economy, which cooled over the course of last year, faces multiple headwinds in 2022, including persistent property weakness and a fresh challenge from the recent local spread of the highly-contagious Omicron variant. Exports, which were one of the few areas of strength in 2021, are also expected to slow, while the government is seen continuing its clampdown on industrial emissions. Policymakers have vowed to head off a sharper slowdown, ahead of a key Communist Party Congress late this year. The central bank is set to unveil more easing steps, though it will likely favour injecting more cash into the economy rather than cutting interest rates too aggressively, policy insiders and economists said. read more Analysts polled by Reuters expect the central bank to deliver more modest easing steps, including cutting banks' reserve requirement ratios the one-year loan prime rate (LPR) - the benchmark lending rate. Analysts at ANZ said in a note that they saw a possibility that the central bank will cut the rate on its medium-term lending facility (MLF) on Monday. Policymakers have also pledged to step up fiscal support for the economy, speeding up local government special bond issuance to spur infrastructure investment and planning more tax cuts. "We might see a larger effect of the monetary and fiscal easing only in the second half of 2022 due to the transmission lags of these policies," analysts at Natixis said in a note. "The recent monetary easing and the stabilization of PMI (factory activity) have indicated such a direction, but more efforts are needed to boost fixed asset investment." Growth is likely to slow to 5.2% in 2022, according to the poll.

China's Q4 GDP growth seen hitting one-and-a-half-year low, raising heat on policymakers

Wall Street swung to a loss on Monday as <a href="http://www.wionews.com/world/wall-street-starts-new-year-with-1-percent-slide-on-global-slowdown-jitters-187942">fears for the global economy dampened</a> investor sentiment just as earnings season got underway.

The finish in the red marked a second consecutive negative close, the first such back-to-back losses for US stocks in 2019.

The benchmark Dow Jones Industrial Average fell 0.4 per cent to close at 23,909.85 while the broader S&amp;P 500 lost 0.5 per cent, settling at 2,582.61.

The tech-heavy Nasdaq fell hardest, losing 0.9 per cent and closing at 6,905.92.

Early Monday, Chinese trade data had underscored worries about a slowdown in the world's second-biggest economy.

The country's exports fell 4.4 per cent in December from a year earlier, while imports dropped 7.6 per cent, reflecting sluggish demand at home and abroad.

"There is a concern that the global economy could slow down. The data for the last few months has supported the fact that the economy is slowing in China and around the globe," Adam Sarhan of 50 Park Investments told AFP.

"The global economy does well when China does well."

Sarhan added that the partial shutdown of the US government was also a worry for investors as it dragged into its fourth week.

"The stock market is concerned because eventually the shutdown will cause a significant slowdown on the economy," he said.

Meanwhile, Citigroup posted mixed results, with better-than-expected fourth-quarter earnings, in part due to lower expenses, but revenues that lagged expectations. One factor was a drop in Treasury bonds trading amid heavy market volatility.

Shares closed up sharply, adding nearly four per cent.

Oil prices also dipped $1.49 in New York, sending energy stocks lower. Exxon Mobil fell 0.2 per cent, while fellow supermajor Chevron fell 0.8 per cent.

Wall Street swung to a loss on Monday as fears for the global economy dampened investor sentiment just as earnings season got underway. The finish in the red marked a second consecutive negative close, the first such back-to-back losses for US stocks in 2019.

Wall Street swung to a loss on Monday as fears for the global economy dampened investor sentiment just as earnings season got underway. The finish in the red marked a second consecutive negative close, the first such back-to-back losses for US stocks in 2019. The benchmark Dow Jones Industrial Average fell 0.4 per cent to close at 23,909.85 while the broader S&P 500 lost 0.5 per cent, settling at 2,582.61. The tech-heavy Nasdaq fell hardest, losing 0.9 per cent and closing at 6,905.92. Early Monday, Chinese trade data had underscored worries about a slowdown in the world's second-biggest economy. The country's exports fell 4.4 per cent in December from a year earlier, while imports dropped 7.6 per cent, reflecting sluggish demand at home and abroad. "There is a concern that the global economy could slow down. The data for the last few months has supported the fact that the economy is slowing in China and around the globe," Adam Sarhan of 50 Park Investments told AFP. "The global economy does well when China does well." Sarhan added that the partial shutdown of the US government was also a worry for investors as it dragged into its fourth week. "The stock market is concerned because eventually the shutdown will cause a significant slowdown on the economy," he said. Meanwhile, Citigroup posted mixed results, with better-than-expected fourth-quarter earnings, in part due to lower expenses, but revenues that lagged expectations. One factor was a drop in Treasury bonds trading amid heavy market volatility. Shares closed up sharply, adding nearly four per cent. Oil prices also dipped $1.49 in New York, sending energy stocks lower. Exxon Mobil fell 0.2 per cent, while fellow supermajor Chevron fell 0.8 per cent.

Wall Street stocks slide on China slowdown, US earnings report

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