China's manufacturing activity dipped for the second straight month in August amid record heatwave and drought.

The manufacturing Purchasing Managers&nbsp;Index (PMI) rose to 49.4 from 49 last month, according to China's National Bureau of Statistics, however, it was still below the 50-point mark which defines contraction from expansion.&nbsp;

<a href="https://www.wionews.com/world/amid-a-spike-in-covid-cases-china-closes-worlds-largest-electronic-market-in-shenzhen-511257">Also Read:&nbsp;China closes world's largest electronic market in Shenzhen</a>

China's manufacturing index expanded in June but it fell last month amid power shortages and unprecedented drought conditions in the country. China's Sichuan province was hit with an acute power crisis as it shut down factories amid the heatwave. Sichuan is a major auto manufacturing hub which hosts the Toyota factory also.

Watch:&nbsp;Global ramifications of China's drought; world stares at more food shortage

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Reports claim authorities in Sichuan province began restoring power to some factories after strict emergency energy supply measures were introduced. Malls in Sichuan and Chongqing were forced to cut down on their opening hours as the power crisis led to a deep economic crisis in the area.

Sichuan also produces half of China's lithium which is used in batteries for electric vehicles. Reports claim at least 19 out of 21 cities in the province were forced to suspend industrial production as the electricity crisis along with the rampant heatwave led to soaring temperatures. Hydropower generation was also hit as water volumes shrunk in Sichuan's rivers. Chinese authorities said the country has been experiencing the longest period of high temperature for the first time since 1961.

At least five million people in southwest China faced power cuts amid the&nbsp;electricity supply crunch. Temperatures in Sichuan province surpassed 40 degrees Celsius and the demand for air conditioning spiked further&nbsp;exacerbating the energy shortage.

(With inputs from Agencies)

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China's manufacturing activity dipped for the second straight month in August amid record heatwave and drought. The manufacturing Purchasing Managers Index (PMI) rose to 49.

China's manufacturing activity dipped for the second straight month in August amid record heatwave and drought. The manufacturing Purchasing Managers Index (PMI) rose to 49.4 from 49 last month, according to China's National Bureau of Statistics, however, it was still below the 50-point mark which defines contraction from expansion. Also Read: China closes world's largest electronic market in Shenzhen China's manufacturing index expanded in June but it fell last month amid power shortages and unprecedented drought conditions in the country. China's Sichuan province was hit with an acute power crisis as it shut down factories amid the heatwave. Sichuan is a major auto manufacturing hub which hosts the Toyota factory also. Watch: Global ramifications of China's drought; world stares at more food shortage Reports claim authorities in Sichuan province began restoring power to some factories after strict emergency energy supply measures were introduced. Malls in Sichuan and Chongqing were forced to cut down on their opening hours as the power crisis led to a deep economic crisis in the area. Sichuan also produces half of China's lithium which is used in batteries for electric vehicles. Reports claim at least 19 out of 21 cities in the province were forced to suspend industrial production as the electricity crisis along with the rampant heatwave led to soaring temperatures. Hydropower generation was also hit as water volumes shrunk in Sichuan's rivers. Chinese authorities said the country has been experiencing the longest period of high temperature for the first time since 1961. At least five million people in southwest China faced power cuts amid the electricity supply crunch. Temperatures in Sichuan province surpassed 40 degrees Celsius and the demand for air conditioning spiked further exacerbating the energy shortage. (With inputs from Agencies) WATCH WION LIVE HERE

Chinese manufacturing contracts for second straight month amid drought, power shortage

A leaked memo from Huawei's chief hints at an economic slump in China. Huawei is planning to prioritise 'survival' amid the painful slowdown. Palki Sharma tells you why Huawei is the symptom of a larger disease plaguing the Chinese economy.

Gravitas: Huawei founder warns of economic slump in China

China's rich are selling their coveted Rolex watches and Birkin bags to raise some quick cash as the economy tumbles. Molly Gambhir tells you more.

WION Fineprint: Why are China's rich selling their Rolex watches & Birkin bags?

While countries across the globe are opening their borders and economies after braving the pandemic, China is employing draconian measures to keep up with its 'zero-Covid tolerance' policy.

While countries across the globe are opening their borders and economies after braving the pandemic, China is employing draconian measures to keep up with its 'zero-Covid tolerance' policy. Consequently, the economy has taken a tumble and another side effect has emerged; one that is affecting the second-hand market for high-end luxury goods. Reportedly, more and more Chinese individuals are selling their prized possessions such as Rolex watches and Hermès bags. The rationale is to make money, but according to experts, the prices of these goods have fallen so rapidly in recent times that it is a loss-making trade for the panicked sellers. Read More: China's economic growth drops to 0.4 per cent amid draconian lockdown measures and severe heatwave According to a Financial Times report, the price of second-hand Rolex Submariners, a must-have 'watch' on every collector's list, has seen its price tumble by almost 46 per cent since March this year. Meanwhile, classic bags such as Hermès Birkin have seen their market value dip by up to a fifth in the same period. This drop seems even grimmer when one notes that six months prior to the lockdown in Shanghai, the price of the aforementioned Rolex watch had risen by almost 240 per cent. "The boom time is over. We are entering a correction period that could last for a long time,” a seller of second-hand luxury watches in China was quoted as saying by SCMP. Why the drops in prices? As reported extensively by WION, China's 'zero-Covid tolerance' strategy has been one of the primary reasons why it has lagged in economic recovery. For months, the tough lockdown measures imposed by the Communist Party of China (CCP) led to a dip in manufacturing as factories and offices remained closed for prolonged periods. It hasn't helped China's cause that the country is facing one of the most severe bouts of heatwave in recent memory. The intense heat has caused the Yangtze river to run dry while the electric grid faces the excruciating task of meeting growing power consumption demand. Read more: China: Yangtze river shrinks; factories shut as drought hits hydropower Earlier this week, Goldman Sachs cut China's growth forecast by 0.3 per cent from 3.3 per cent to 3 per cent. Meanwhile, Nomura lowered its projections from 3.3 per cent to 2.8 per cent. The downgrade comes on the heels of the Chinese economy growing by a tiny 0.4 per cent in the quarter while the Politburo giving up on the 5.5 per cent economic growth rate by the year-end. Read More: Dark clouds for China: Goldman Sachs and Nomura slash China's GDP outlook Add these factors and it becomes clearer why the second-hand luxury goods market in China has seen a reversal in its fortunes. (With inputs from agencies) WATCH WION LIVE HERE:

Chinese are selling their Rolex watches & Hermes bags to raise quick cash as economy tumbles

As China's economy stutters, the country's PM&nbsp;Li Keqiang has ordered key provinces which account for China's growth to implement pro-growth measures.

The Chinese central bank cut interest rates as the country missed estimates on industrial output and retail sales. China has been hit with&nbsp;supply chain crisis about lockdowns with several factories being shut in cities.

<a href="https://www.wionews.com/world/china-limits-electricity-to-factories-as-heatwave-drives-up-demand-507453">Also Read:&nbsp;China limits electricity to factories as heatwave drives up demand</a>

Chinese media reported that Keqiang asked officials to boost consumption while vowing to step up support to ensure employment and ensure economic growth. Li reportedly also acknowledged the downward spiral had occurred due to repeated lockdowns in the second quarter while focussing on "development".

Reports claim Chinese officials may issue extra debt and bonds this year to ensure infrastructure spending. China's economic slump comes amid a heatwave with its autumn harvest under threat. The weather forecasters say the heatwave is likely to continue for the next two weeks.

Watch:&nbsp;China threatens war after visit by US lawmakers

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The Yangzte river received less water this year due to drought conditions&nbsp;in the country. The region&nbsp;faced high temperatures reaching 40 degrees celsius over the past month as officials deployed pumps to ensure the depleted water levels do not threaten crops.

Last month rainfall in the Yangtze river fell by 30 per cent and is down 60 per cent this month, reports say. The Poyang lake in Jiangxi province which helps to regulate water flow into the Yangtze river has also shrunk.

Chinese media reports claim authorities have put together cloud-seeding missiles in order to "seed" clouds and induce rain. Officials say the Three Gorges reservoir does not have enough water for downstream outflow into the Yangtze river with water levels dwindling to half as compared to last year.

(With inputs from Agencies)

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As China's economy stutters, the country's PM Li Keqiang has ordered key provinces which account for China's growth to implement pro-growth measures. The Chinese central bank cut interest rates as the country missed estimates on industrial output and retail sales.

As China's economy stutters, the country's PM Li Keqiang has ordered key provinces which account for China's growth to implement pro-growth measures. The Chinese central bank cut interest rates as the country missed estimates on industrial output and retail sales. China has been hit with supply chain crisis about lockdowns with several factories being shut in cities. Also Read: China limits electricity to factories as heatwave drives up demand Chinese media reported that Keqiang asked officials to boost consumption while vowing to step up support to ensure employment and ensure economic growth. Li reportedly also acknowledged the downward spiral had occurred due to repeated lockdowns in the second quarter while focussing on "development". Reports claim Chinese officials may issue extra debt and bonds this year to ensure infrastructure spending. China's economic slump comes amid a heatwave with its autumn harvest under threat. The weather forecasters say the heatwave is likely to continue for the next two weeks. Watch: China threatens war after visit by US lawmakers The Yangzte river received less water this year due to drought conditions in the country. The region faced high temperatures reaching 40 degrees celsius over the past month as officials deployed pumps to ensure the depleted water levels do not threaten crops. Last month rainfall in the Yangtze river fell by 30 per cent and is down 60 per cent this month, reports say. The Poyang lake in Jiangxi province which helps to regulate water flow into the Yangtze river has also shrunk. Chinese media reports claim authorities have put together cloud-seeding missiles in order to "seed" clouds and induce rain. Officials say the Three Gorges reservoir does not have enough water for downstream outflow into the Yangtze river with water levels dwindling to half as compared to last year. (With inputs from Agencies) WATCH WION LIVE HERE

China's PM Li Keqiang orders growth measures as economy stutters amid drought, heatwave

China's economy unexpectedly contracted in July as a result of a housing crisis and Beijing's zero-Covid&nbsp;policy, while the central bank shocked the markets by lowering crucial lending rates to boost demand.

According to data from the National Bureau of Statistics (NBS), industrial output increased 3.8% from a year earlier in July, which was a little decrease from June's 3.9% growth. According to a Reuters poll, economists had predicted a 4.6% increase.

Retail sales, which only started to increase in June, up 2.7% from a year earlier, far below the 3.1% rise observed in June and far below analysts' expectations of 5% growth.

The second-largest <a href="https://www.wionews.com/world/japans-economy-rebounds-from-covid-sees-growth-in-second-quarter-506920">economy</a>&nbsp;in the world just avoided contracting in the June quarter due to the lockdown of Shanghai's business centre, a worsening downturn in the real estate market, and chronically weak consumer spending.

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Risks to expansion do exist, though, as numerous Chinese cities, including industry hubs and well-known tourist destinations, implemented lockdown measures in July in response to new outbreaks of the more contagious Omicron variety.

The NBS issued a statement warning that "the possibility of stagflation in the world economy is rising and the ground for domestic economic recovery is not yet firm."

The mortgage boycott that negatively impacted buyer confidence further shook the real estate market in July. In July, real estate investment fell by 12.3%, the fastest rate this year, while new sales fell by 28.9%.

Also read |&nbsp;<meta charset="utf-8" /><a href="https://www.wionews.com/world/china-blocks-traders-from-nepal-impacting-trade-yet-again-506816">China blocks trading points citing Covid-19, Nepal traders suffer losses</a>

Chinese officials are attempting to strike a balance between bolstering a flimsy recovery and eliminating rising COVID&nbsp;clusters, as the economy is anticipated to miss its official growth target this year, set at approximately 5.5%, for the first time since 2015.

With the exception of exports, all economic indicators in July were disappointing. Nie Wen, an economist with Hwabao Trust with a <a href="https://www.wionews.com/india-news/as-india-skips-mention-of-one-china-beijing-hopes-for-open-reiteration-taiwan-says-in-touch-with-delhi-506858">Shanghai </a>office, noted that loan demand from the real sector remained poor, indicating a cautious prognosis for the months to come. He also noted that COVID-19 outbreaks and the July heatwaves had an impact on activity.

The state of the labour market remains precarious. Although youth unemployment remained stubbornly high, reaching a record 19.9% in July, the nationwide survey-based unemployment rate slightly decreased to 5.4% in July from 5.5% in June.

The central bank abruptly reduced interest rates on important lending facilities for the second time this year on Monday in an effort to support growth. According to data released on Friday, new yuan loans fell more than anticipated in July as businesses and consumers continued to be cautious about taking on debt.

Wang Jun, an analyst at Zhongyuan Bank, predicts that rather than deploying drastic new stimulus measures, government officials would concentrate on implementing current policies.

“We are now facing a typical liquidity trap problem. No matter how loose the credit supply is, companies and consumers are cautious in taking on more debt,” Wang said. “Some of them are now even paying back their debt in advance. This may herald a recession.”

In the first seven months of the year, fixed asset investment increased 5.7% from the same period a year earlier, below the forecasted 6.2% increase and down from a 6.1% increase in January-June. Beijing had hoped that fixed asset investment would drive growth in the second half as exports slump.

(With inputs from agencies)

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China's economy unexpectedly contracted in July as a result of a housing crisis and Beijing's zero-Covid policy, while the central bank shocked the markets by lowering crucial lending rates to boost demand.

China's economy unexpectedly contracted in July as a result of a housing crisis and Beijing's zero-Covid policy, while the central bank shocked the markets by lowering crucial lending rates to boost demand. According to data from the National Bureau of Statistics (NBS), industrial output increased 3.8% from a year earlier in July, which was a little decrease from June's 3.9% growth. According to a Reuters poll, economists had predicted a 4.6% increase. Retail sales, which only started to increase in June, up 2.7% from a year earlier, far below the 3.1% rise observed in June and far below analysts' expectations of 5% growth. The second-largest economy in the world just avoided contracting in the June quarter due to the lockdown of Shanghai's business centre, a worsening downturn in the real estate market, and chronically weak consumer spending. Risks to expansion do exist, though, as numerous Chinese cities, including industry hubs and well-known tourist destinations, implemented lockdown measures in July in response to new outbreaks of the more contagious Omicron variety. The NBS issued a statement warning that "the possibility of stagflation in the world economy is rising and the ground for domestic economic recovery is not yet firm." The mortgage boycott that negatively impacted buyer confidence further shook the real estate market in July. In July, real estate investment fell by 12.3%, the fastest rate this year, while new sales fell by 28.9%. Also read | China blocks trading points citing Covid-19, Nepal traders suffer losses Chinese officials are attempting to strike a balance between bolstering a flimsy recovery and eliminating rising COVID clusters, as the economy is anticipated to miss its official growth target this year, set at approximately 5.5%, for the first time since 2015. With the exception of exports, all economic indicators in July were disappointing. Nie Wen, an economist with Hwabao Trust with a Shanghai office, noted that loan demand from the real sector remained poor, indicating a cautious prognosis for the months to come. He also noted that COVID-19 outbreaks and the July heatwaves had an impact on activity. The state of the labour market remains precarious. Although youth unemployment remained stubbornly high, reaching a record 19.9% in July, the nationwide survey-based unemployment rate slightly decreased to 5.4% in July from 5.5% in June. The central bank abruptly reduced interest rates on important lending facilities for the second time this year on Monday in an effort to support growth. According to data released on Friday, new yuan loans fell more than anticipated in July as businesses and consumers continued to be cautious about taking on debt. Wang Jun, an analyst at Zhongyuan Bank, predicts that rather than deploying drastic new stimulus measures, government officials would concentrate on implementing current policies. “We are now facing a typical liquidity trap problem. No matter how loose the credit supply is, companies and consumers are cautious in taking on more debt,” Wang said. “Some of them are now even paying back their debt in advance. This may herald a recession.” In the first seven months of the year, fixed asset investment increased 5.7% from the same period a year earlier, below the forecasted 6.2% increase and down from a 6.1% increase in January-June. Beijing had hoped that fixed asset investment would drive growth in the second half as exports slump. (With inputs from agencies)

China's economy falls into a slumber due to unexpected COVID-19 outbreaks and property crisis

China's economy is blinking red. Multiple crises have begun to snowball. Biggest banking scam has surfaced, citizens are protesting, tanks are rolling, real estate is crumbling & global economy is bracing for a hit. Hem Kaur Saroya brings you the Full Context on China's economic mess

The Full Context | Multiple crises riddle Chinese economy | Can China take the death blow?

China placed 1.7 million people under lockdown in central Anhui province amid fresh Covid-19 surge. The outbreak in Anhui comes as the Chinese economy begins to rebound from a months-long lockdown in Shanghai and disruptive Covid restrictions in the capital Beijing.

Total lockdown imposed in China's Anhui province amid fresh Covid surge

The Chinese government has unveiled a large fiscal, financial and investment plan to kick-start the economy after the pandemic ravaged key sectors in the last two years.

The plan involves a stimulus package as the Communist Party eyes growth this year with curbs on auto purchases to be lifted and cutting down on tax for small-engined cars.

China's manufacturing sector showed signs of life in May as factories resumed work after Shanghai was locked down due to the virus. The country's manufacturing activity gauged in terms of &nbsp;Purchasing Managers' Index (PMI) rose to 49.6 from 47.4 in April but remained stuck below the 50-point mark.

<a href="https://www.wionews.com/business-economy/new-survey-shows-china-in-danger-of-exporting-fresh-inflation-turmoil-483375">Also Read:&nbsp;New survey shows China in danger of exporting fresh inflation turmoil</a>

China has stuck to its "Covid zero" policy as it it has sought to close down cities with only a few virus cases affecting supply chain due to the closure of factories which has severely hit economic activity.

National Bureau of Statistics (NBS) statistician Zhao Qinghe recently said "the recovery momentum still needs to be strengthened" as prices of raw materials remained low.

Watch:&nbsp;China's harsh Covid lockdowns exacerbate population crisis

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China has sought to boost cloud computing, blockchain technologies and artificial intelligence ensuring "healthy development of platform companies".

The government wants to expand purchase of cars and home appliances and expand private investment. The government is also seeking domestic firms to list in Hong Kong. Real estate investment trusts (REITs) are being encouraged to raise capital to fund the acquisition of infrastructure projects.

Tax credit rebates will be extended to more sectors with industries hit hard by virus curbs allowed to defer social security payments.

(With inputs from Agencies)

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The Chinese government has unveiled a large fiscal, financial and investment plan to kick-start the economy after the pandemic ravaged key sectors in the last two years.

The Chinese government has unveiled a large fiscal, financial and investment plan to kick-start the economy after the pandemic ravaged key sectors in the last two years. The plan involves a stimulus package as the Communist Party eyes growth this year with curbs on auto purchases to be lifted and cutting down on tax for small-engined cars. China's manufacturing sector showed signs of life in May as factories resumed work after Shanghai was locked down due to the virus. The country's manufacturing activity gauged in terms of Purchasing Managers' Index (PMI) rose to 49.6 from 47.4 in April but remained stuck below the 50-point mark. Also Read: New survey shows China in danger of exporting fresh inflation turmoil China has stuck to its "Covid zero" policy as it it has sought to close down cities with only a few virus cases affecting supply chain due to the closure of factories which has severely hit economic activity. National Bureau of Statistics (NBS) statistician Zhao Qinghe recently said "the recovery momentum still needs to be strengthened" as prices of raw materials remained low. Watch: China's harsh Covid lockdowns exacerbate population crisis China has sought to boost cloud computing, blockchain technologies and artificial intelligence ensuring "healthy development of platform companies". The government wants to expand purchase of cars and home appliances and expand private investment. The government is also seeking domestic firms to list in Hong Kong. Real estate investment trusts (REITs) are being encouraged to raise capital to fund the acquisition of infrastructure projects. Tax credit rebates will be extended to more sectors with industries hit hard by virus curbs allowed to defer social security payments. (With inputs from Agencies) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here. ×

China unveils stimulus package to kickstart economy after Covid downturn

A new survey conducted by MLIV Pulse has shown that China is in danger of exporting fresh inflation turmoil due to its zero-Covid policy.

Intensifying the world’s supply-chain woes and challenging efforts, the Covid-zero strategy in China has forced central bankers to rein in inflation that’s running at multi-decade highs.

A majority of 540 participants of the survey have projected that China will stand firm on the severe lockdown policies that have disrupted the supply of everything from Adidas sneakers and Rolls-Royce cars to Nvidia computer chips.&nbsp;

Trailing behind developed-world peers this year, Chinese stocks have suffered due to long-running Covid curbs in Shanghai.

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Warning of more economic difficulties ahead, Chinese Premier Li Keqiang told a State Council meeting the challenges now are "greater than when the pandemic hit hard in 2020."&nbsp;

According to a readout by the official Xinhua news agency, Li said "We are currently at a critical juncture in determining the economic trend of the whole year."&nbsp;

China is the last major economy welded to a policy of mass testing and hard lockdowns to eliminate virus clusters, but the strict curbs have battered businesses.

Li's remarks are the latest in a growing chorus of calls from officials and business leaders for more balance between stopping the virus and helping the ailing economy.

As regulators step up efforts to channel fresh capital into the struggling real estate sector and aid a virus-hit economy, China's first public real estate investment trusts (REITs) based on residential properties will be launched soon.

REITs are a collective investment scheme that sells shares in a trust that owns a collection of properties or infrastructure assets.

While publishing rules for the issuance of rental apartment REITs, regulators said "It will also help prevent and reduce major risks, and maintain the stable and healthy development of the real estate market."&nbsp; 
&nbsp;

(With inputs from agencies)

Watch WION's live TV here:

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A new survey conducted by MLIV Pulse has shown that China is in danger of exporting fresh inflation turmoil due to its zero-Covid policy. Intensifying the world’s supply-chain woes and challenging efforts, the Covid-zero strategy in China has forced central bankers to rein in inflation that’s running at multi-decade highs.

A new survey conducted by MLIV Pulse has shown that China is in danger of exporting fresh inflation turmoil due to its zero-Covid policy. Intensifying the world’s supply-chain woes and challenging efforts, the Covid-zero strategy in China has forced central bankers to rein in inflation that’s running at multi-decade highs. A majority of 540 participants of the survey have projected that China will stand firm on the severe lockdown policies that have disrupted the supply of everything from Adidas sneakers and Rolls-Royce cars to Nvidia computer chips. Trailing behind developed-world peers this year, Chinese stocks have suffered due to long-running Covid curbs in Shanghai. Warning of more economic difficulties ahead, Chinese Premier Li Keqiang told a State Council meeting the challenges now are "greater than when the pandemic hit hard in 2020." According to a readout by the official Xinhua news agency, Li said "We are currently at a critical juncture in determining the economic trend of the whole year." China is the last major economy welded to a policy of mass testing and hard lockdowns to eliminate virus clusters, but the strict curbs have battered businesses. Li's remarks are the latest in a growing chorus of calls from officials and business leaders for more balance between stopping the virus and helping the ailing economy. As regulators step up efforts to channel fresh capital into the struggling real estate sector and aid a virus-hit economy, China's first public real estate investment trusts (REITs) based on residential properties will be launched soon. REITs are a collective investment scheme that sells shares in a trust that owns a collection of properties or infrastructure assets. While publishing rules for the issuance of rental apartment REITs, regulators said "It will also help prevent and reduce major risks, and maintain the stable and healthy development of the real estate market." (With inputs from agencies) Watch WION's live TV here:

New survey shows China in danger of exporting fresh inflation turmoil

A disagreement between Chinese President Xi Jinping and Premier Li Keqiang is paralysing officials responsible for the world's second-largest economy, reported Bloomberg.

While Keqiang has urged&nbsp;the authorities to bolster the Chinese economy and hit their pre-determined growth targets, Jinping continues to emphasise the need for officials to push for zero coronavirus cases.

Bloomberg cited eight local government officials and financial bureaucrats familiar with the matter saying that the confusion on whom to listen to is causing chaos in a nation that implements the orders of the Chinese Communist Party without questioning its decisions.

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Four senior officials told Bloomberg on the condition of anonymity that Li is trying to strengthen consensus on the urgency to revive the economy but authorities are divided as many believe that the COVID-19 outbreak should be their priority.

Earlier, the country's state broadcaster China Central Television (CCTV) had reported that Politburo's supreme seven-member Standing Committee pledged to "fight against any speech that distorts, questions or rejects our country's Covid-control policy.''

But Hequiang had told a press briefing later that “difficulties in some aspects, to a certain extent, are greater than when the epidemic hit us severely in 2020.”

Also read |&nbsp;<a href="https://www.wionews.com/world/russia-china-utilise-veto-power-to-halt-us-bid-to-punish-north-korea-over-its-missile-launches-482495" hreflang="en">China, Russia veto US push for more UN sanctions on North Korea</a>

According to Trey McArver, co-founder of research firm Trivium China, ''Li is being put in the impossible position of trying to rescue the economy without being able to adjust the one policy, zero-Covid, that is causing the most economic damage.''

The Communist Party is trying to avoid any missteps, particularly in handling Covid outbreaks before its leadership conclave later this year.

Political experts have predicted that the party will reshuffle top ranks if they fail to fulfill the expectations of Jinping who is expected to win a landmark third term.

(With inputs from agencies)

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A disagreement between Chinese President Xi Jinping and Premier Li Keqiang is paralysing officials responsible for the world's second-largest economy, reported Bloomberg.

A disagreement between Chinese President Xi Jinping and Premier Li Keqiang is paralysing officials responsible for the world's second-largest economy, reported Bloomberg. While Keqiang has urged the authorities to bolster the Chinese economy and hit their pre-determined growth targets, Jinping continues to emphasise the need for officials to push for zero coronavirus cases. Bloomberg cited eight local government officials and financial bureaucrats familiar with the matter saying that the confusion on whom to listen to is causing chaos in a nation that implements the orders of the Chinese Communist Party without questioning its decisions. Four senior officials told Bloomberg on the condition of anonymity that Li is trying to strengthen consensus on the urgency to revive the economy but authorities are divided as many believe that the COVID-19 outbreak should be their priority. Earlier, the country's state broadcaster China Central Television (CCTV) had reported that Politburo's supreme seven-member Standing Committee pledged to "fight against any speech that distorts, questions or rejects our country's Covid-control policy.'' But Hequiang had told a press briefing later that “difficulties in some aspects, to a certain extent, are greater than when the epidemic hit us severely in 2020.” Also read | China, Russia veto US push for more UN sanctions on North Korea According to Trey McArver, co-founder of research firm Trivium China, ''Li is being put in the impossible position of trying to rescue the economy without being able to adjust the one policy, zero-Covid, that is causing the most economic damage.'' The Communist Party is trying to avoid any missteps, particularly in handling Covid outbreaks before its leadership conclave later this year. Political experts have predicted that the party will reshuffle top ranks if they fail to fulfill the expectations of Jinping who is expected to win a landmark third term. (With inputs from agencies) Watch WION's live TV here:

Disagreement between Xi Jinping and Li Keqiang paralysing officials responsible for Chinese economy

After China’s financial hub Shanghai, its capital Beijing is staring at a harsh lockdown, and frustration and anger from its citizens in tow. Currently, at least 27 cities with more than 179 million people are under full or partial lockdown.

While China is showing few signs of loosening its stringent zero-Covid policies, its capital Beijing is beginning to shut down. And veteran Hong Kong actor Kenneth Tsang passed away in a Covid-19 quarantine hotel in the city.

Meanwhile, in the international arena, Serbia is showing off new Chinese missiles, and the Australian Prime Minister has accused China of interference in foreign politics. Star Skier Eileen Gu’s retirement message gains a mixed response from Chinese netizens, some warm and some not too much. This week in Chinese Vignettes, we’ll cover all the top stories making news in China.&nbsp;

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China over the week

Rising Covid cases and China’s dwindling economy&nbsp;

China’s financial capital Shanghai and national capital Beijing power much of the country’s economy. But both are under lockdown. And these strict curbs along with the ongoing Ukraine crisis are taking a significant toll on the economy.&nbsp;&nbsp;

“The COVID-19 and Ukraine crisis have led to increased risks and challenges. The complexity, severity, and uncertainty of China’s economic development environment have increased,” Politburo was quoted as saying.&nbsp;

In April, the damage from shutdowns in Shanghai and elsewhere was apparent in the first official data released over the weekend. ‘Both manufacturing and services activity plunged to their worst levels since February 2020’ imposed during the Wuhan lockdown last year, reported Bloomberg. The offshore yuan, too, weekend.&nbsp;&nbsp;The Bloomberg report added that the signs of strain on global supply chains showed ‘suppliers facing the longest delays in more than two years in delivering raw material to their manufacturing customers.’ The GDP in Covid locked-down Jilin dropped 7.9 per cent&nbsp;in the three-month period of January-to-March from a year ago.&nbsp;

<a href="https://www.wionews.com/world/shanghai-hits-covid-milestone-beijing-still-wary-475178">Also read |&nbsp;Shanghai hits Covid milestone, Beijing still wary</a>

The data came a day after President Xi promised to meet China’s economic targets while sticking to the zero-Covid policy.&nbsp;

“Stabilising growth, employment and prices are facing new challenges. It is very important to do a good job in economic work and effectively protect and improve people’s livelihood,” the Politburo was quoted as saying.&nbsp;

"We will strengthen macroeconomic policy adjustments to stabilize the economy, and strive to achieve the expected economic and social development goals for the full year," the statement added.&nbsp;

President Xi also signaled an easing of its crackdown on the tech sector as a part of the economic relief package. On Tuesday, he chaired a meeting that announced a push to boost demand, ‘reinforcing Beijing's reliance on big-ticket projects to spur growth,’ said VOA News.&nbsp;

Quarantining in China&nbsp;&nbsp;

Forced quarantining in China as a part of the zero-Covid policy is taking a massive toll on people. The Covid rules in China demand that anyone who either infected or a close contact of someone who is must be sent to state-run quarantining facilities.&nbsp;

Many videos, pictures and reports have gone viral of the showing the unsanitary conditions, with clogged up toilets and overflowing dustbins.&nbsp;&nbsp;The elderly especially those suffering from underlying medical conditions are suffering the most.&nbsp;

A Shanghai resident told the BBC that her grandfather who&nbsp;suffers from diabetes and hypertension&nbsp;is bedridden and he heavily relies on caretakers.&nbsp;

<a href="https://www.wionews.com/trending/watch-chinese-people-claim-quarantine-facilities-in-shanghai-have-insufficient-staff-shortage-of-food-468545">Watch | Shanghai residents claim quarantine facilities have insufficient staff, shortage of food</a>

"He just can't go to quarantine centers or hotels. The hygiene situation there is worrying. Old people can't adapt to such environments. How can he live there? ….&nbsp;It's just terrifying. The government has to give us a solution. [At the moment] they're just using old people's lives to achieve this goal of 'zero Covid'."&nbsp;BBC quoted the resident as saying.&nbsp;

This week, veteran actor Kenneth Tsang was found collapsed in his hotel room in Hong Kong where he had been undergoing quarantine after returning from Singapore. Tsang was 87, and had more than 230 acting credits including James Bond film Die Another Day.&nbsp;&nbsp;&nbsp;

‘He had tested negative for Covid-19, had been vaccinated with three doses, and had no chronic illness,’ said the South China Morning Post.&nbsp;

Last week, Philippine Ambassador to China&nbsp;Jose Santiago Sta.&nbsp;Romana, 74,&nbsp;&nbsp;was also passed away while undergoing his mandatory quarantine.&nbsp;&nbsp;

According to a Daily Mail report, a Chinese man sealed himself inside&nbsp;his car to quarantine because he thought that he had Covid.&nbsp;

Meanwhile, after Shenzhen, Guangzhou has become the second city to open a pet quarantine centre.

Star Skier Eileen Gu retires&nbsp;&nbsp;

This week, Chinese&nbsp;Winter Olympics&nbsp;superstar&nbsp;Eileen Gu&nbsp;announced her retirement over social media. "Thank you China for the unforgettable few months &amp; for the endless love,&nbsp;🖤" she said.&nbsp;

While she was showered with love, her farewell post on Weibo caused a stir. On one hand, many thanked her back, others accused her of ‘acting like a foreigner.’ Many questioned why she didn’t say “thank you motherland” or “thank you (my) country” like other Chinese athletes, reported CNN.&nbsp;

While one trending comment said,"&nbsp;"You're most welcome because you're one of us," another said, ”&nbsp;Ultimately, she thinks of herself as an American. She only joined China temporarily."&nbsp;

CHINA IN WORLD REPORTAGE&nbsp;

Serbia shows off new Chinese Missile&nbsp;

Over the weekend, Serbia showed off its new Chinese-made surface-to-air missiles and other military hardware. Earlier this month, China delivered its FK-3&nbsp;surface-to-air defense system, purchased by Belgrade in 2019.&nbsp;&nbsp;

Serbia is the only European country to operate the Chinese missile system and CH-92A drones.&nbsp;

<a href="https://www.wionews.com/photos/serbias-buys-chinese-missiles-europes-russian-connection-475416">Also see |&nbsp;Serbia buys Chinese missiles: Europe's Russian connection</a>

"We're going to significantly strengthen our fighter air force ... Serbia is a neutral country and Serbia must find solutions enabling it to preserve its sky and its state," said&nbsp;President Aleksandar Vucic&nbsp;on Saturday.&nbsp;

Australia accuses China of interfering in foreign politics&nbsp;

Australian PM Scott Morrison&nbsp;accused China of "form", or a record, on interference in foreign politics. The statement came after Home Minister Karen Andrews&nbsp;said ‘Beijing’s unveiling of a security deal with the nearby Solomon Islands was timed to influence an election,’ reported Reuters.&nbsp;

"We are very aware of the influence the Chinese government seeks to have in this country… There is form on foreign interference in Australia."&nbsp;said Morrison in his reply to a query about the statement by the Home Minister.&nbsp;&nbsp;

<a href="https://www.wionews.com/world/china-has-a-record-of-interfering-in-foreign-politics-says-australias-prime-minister-scott-morrison-475152">Also read |&nbsp;China has a record of interfering in foreign politics, says Australia's Prime Minister Scott Morrison</a>

Earlier, Morrison also said that Australia is worried that Beijing will increase its military presence on the pacific nation of Solomon Islands, which is less than 2,000 km from Australian capital Canberra. He further added that "Any suggestion that the Chinese government doesn't seek to interfere in Australia, well, we didn't put that legislation in for no reason.”&nbsp;

Australia is set to vote on May 21.&nbsp;&nbsp;

Watch WION's live TV here:

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After China’s financial hub Shanghai, its capital Beijing is staring at a harsh lockdown, and frustration and anger from its citizens in tow. Currently, at least 27 cities with more than 179 million people are under full or partial lockdown.

After China’s financial hub Shanghai, its capital Beijing is staring at a harsh lockdown, and frustration and anger from its citizens in tow. Currently, at least 27 cities with more than 179 million people are under full or partial lockdown. While China is showing few signs of loosening its stringent zero-Covid policies, its capital Beijing is beginning to shut down. And veteran Hong Kong actor Kenneth Tsang passed away in a Covid-19 quarantine hotel in the city. Meanwhile, in the international arena, Serbia is showing off new Chinese missiles, and the Australian Prime Minister has accused China of interference in foreign politics. Star Skier Eileen Gu’s retirement message gains a mixed response from Chinese netizens, some warm and some not too much. This week in Chinese Vignettes, we’ll cover all the top stories making news in China. China over the week Rising Covid cases and China’s dwindling economy China’s financial capital Shanghai and national capital Beijing power much of the country’s economy. But both are under lockdown. And these strict curbs along with the ongoing Ukraine crisis are taking a significant toll on the economy. “The COVID-19 and Ukraine crisis have led to increased risks and challenges. The complexity, severity, and uncertainty of China’s economic development environment have increased,” Politburo was quoted as saying. In April, the damage from shutdowns in Shanghai and elsewhere was apparent in the first official data released over the weekend. ‘Both manufacturing and services activity plunged to their worst levels since February 2020’ imposed during the Wuhan lockdown last year, reported Bloomberg. The offshore yuan, too, weekend. The Bloomberg report added that the signs of strain on global supply chains showed ‘suppliers facing the longest delays in more than two years in delivering raw material to their manufacturing customers.’ The GDP in Covid locked-down Jilin dropped 7.9 per cent in the three-month period of January-to-March from a year ago. Also read | Shanghai hits Covid milestone, Beijing still wary The data came a day after President Xi promised to meet China’s economic targets while sticking to the zero-Covid policy. “Stabilising growth, employment and prices are facing new challenges. It is very important to do a good job in economic work and effectively protect and improve people’s livelihood,” the Politburo was quoted as saying. "We will strengthen macroeconomic policy adjustments to stabilize the economy, and strive to achieve the expected economic and social development goals for the full year," the statement added. President Xi also signaled an easing of its crackdown on the tech sector as a part of the economic relief package. On Tuesday, he chaired a meeting that announced a push to boost demand, ‘reinforcing Beijing's reliance on big-ticket projects to spur growth,’ said VOA News. Quarantining in China Forced quarantining in China as a part of the zero-Covid policy is taking a massive toll on people. The Covid rules in China demand that anyone who either infected or a close contact of someone who is must be sent to state-run quarantining facilities. Many videos, pictures and reports have gone viral of the showing the unsanitary conditions, with clogged up toilets and overflowing dustbins. The elderly especially those suffering from underlying medical conditions are suffering the most. A Shanghai resident told the BBC that her grandfather who suffers from diabetes and hypertension is bedridden and he heavily relies on caretakers. Watch | Shanghai residents claim quarantine facilities have insufficient staff, shortage of food "He just can't go to quarantine centers or hotels. The hygiene situation there is worrying. Old people can't adapt to such environments. How can he live there? …. It's just terrifying. The government has to give us a solution. [At the moment] they're just using old people's lives to achieve this goal of 'zero Covid'." BBC quoted the resident as saying. This week, veteran actor Kenneth Tsang was found collapsed in his hotel room in Hong Kong where he had been undergoing quarantine after returning from Singapore. Tsang was 87, and had more than 230 acting credits including James Bond film Die Another Day. ‘He had tested negative for Covid-19, had been vaccinated with three doses, and had no chronic illness,’ said the South China Morning Post. Last week, Philippine Ambassador to China Jose Santiago Sta. Romana, 74, was also passed away while undergoing his mandatory quarantine. According to a Daily Mail report, a Chinese man sealed himself inside his car to quarantine because he thought that he had Covid. Meanwhile, after Shenzhen, Guangzhou has become the second city to open a pet quarantine centre. Star Skier Eileen Gu retires This week, Chinese Winter Olympics superstar Eileen Gu announced her retirement over social media. "Thank you China for the unforgettable few months & for the endless love, 🖤" she said. While she was showered with love, her farewell post on Weibo caused a stir. On one hand, many thanked her back, others accused her of ‘acting like a foreigner.’ Many questioned why she didn’t say “thank you motherland” or “thank you (my) country” like other Chinese athletes, reported CNN. While one trending comment said," "You're most welcome because you're one of us," another said, ” Ultimately, she thinks of herself as an American. She only joined China temporarily." CHINA IN WORLD REPORTAGE Serbia shows off new Chinese Missile Over the weekend, Serbia showed off its new Chinese-made surface-to-air missiles and other military hardware. Earlier this month, China delivered its FK-3 surface-to-air defense system, purchased by Belgrade in 2019. Serbia is the only European country to operate the Chinese missile system and CH-92A drones. Also see | Serbia buys Chinese missiles: Europe's Russian connection "We're going to significantly strengthen our fighter air force ... Serbia is a neutral country and Serbia must find solutions enabling it to preserve its sky and its state," said President Aleksandar Vucic on Saturday. Australia accuses China of interfering in foreign politics Australian PM Scott Morrison accused China of "form", or a record, on interference in foreign politics. The statement came after Home Minister Karen Andrews said ‘Beijing’s unveiling of a security deal with the nearby Solomon Islands was timed to influence an election,’ reported Reuters. "We are very aware of the influence the Chinese government seeks to have in this country… There is form on foreign interference in Australia." said Morrison in his reply to a query about the statement by the Home Minister. Also read | China has a record of interfering in foreign politics, says Australia's Prime Minister Scott Morrison Earlier, Morrison also said that Australia is worried that Beijing will increase its military presence on the pacific nation of Solomon Islands, which is less than 2,000 km from Australian capital Canberra. He further added that "Any suggestion that the Chinese government doesn't seek to interfere in Australia, well, we didn't put that legislation in for no reason.” Australia is set to vote on May 21. Watch WION's live TV here:

Chinese vignettes | As COVID-19 reaches the capital, China is focused on reviving its economy

A property downturn, slowing economy and war in Ukraine loom large over this week's annual convening of China's legislature, with policymakers expected to focus on shoring up faltering growth.

The rubber-stamp parliament starting Saturday in Beijing gathers some 3,000 members of the National People's Congress (NPC) for highly choreographed meetings over bills, budgets and personnel changes.

The ruling Communist Party uses the opportunity to tout its achievements while also setting the country's economic blueprint and GDP target for the year ahead.

Also read |&nbsp;<a href="https://www.wionews.com/photos/a-day-in-the-life-of-uighurs-251734">A day in the life of China’s persecuted Uighur community</a>

Much of the NPC's agenda is unknown until during -- or even after -- the multi-day meeting, with many sessions taking place behind closed doors.

But this year, concerns are bound to centre on the country's sluggish economic growth, partly down to a crunch in the crucial property sector -- which makes up as much as a quarter of national output.

Stringent "zero-Covid" measures including harsh lockdowns and closed borders have also been a major blow to manufacturing hubs, tourist centres and port cities.

Meanwhile, the Russian invasion of Ukraine has raised the prospect of spiking food and oil prices, with fears over supplies of crucial commodities from the region being affected.

Commerce Minister Wang Wentao admitted to journalists this week that China's economy faces "huge" pressure this year.

Also read |&nbsp;<a href="https://www.wionews.com/world/how-will-the-russia-ukraine-conflict-impact-chinas-economic-interests-in-ukraine-458283">How will the Russia-Ukraine conflict impact China's economic interests in Ukraine?</a>

GDP and stability

Beijing traditionally announces its new economic growth target at Premier Li Keqiang's annual "state of the nation" speech at the NPC, followed by his rare -- but heavily stage-managed -- press conference.

China's GDP growth slowed sharply in the final months of 2021 despite an earlier pandemic bounceback, as it grappled with tepid domestic demand and a property downturn.

The country's communist leaders have long based their legitimacy on the argument that their model of government represents economic growth and continuity for China's massive population.

But as much of the rest of the world now reopens, China is increasingly out of step, as continued COVID-19 restrictions weigh on consumer confidence.

Maintaining stability will be crucial as the Communist Party gears up for a pivotal meeting this fall -- the 20th party congress -- that is expected to easily secure President Xi Jinping a third term.

In 2020, there was no GDP target set at all, and last year Li announced a modest goal of "above six percent".

Also read |&nbsp;<a href="https://www.wionews.com/world/china-suggests-this-is-the-most-important-thing-that-can-end-conflict-between-russia-and-ukraine-458166">China suggests this is the 'most important thing' that can end conflict between Russia and Ukraine</a>

Amid the unpredictability, analysts expect Beijing to announce a similarly open and attainable target this year.

"We expect the growth target to be set at 'above five percent'," UOB economist Ho Woei Chen said in a recent report, adding that pace would match the past two years' average of 5.1 per cent.

Iris Pang, ING's chief economist for Greater China, expected the range could be higher after the country easily exceeded last year's target.

Watch |&nbsp;Report: China asked Russia to delay the attack on Ukraine till Olympics were over

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And infrastructure would probably form a key part of the government's support for the economy, predicted ANZ Research senior China strategist Zhaopeng Xing.

He expected "double-digit growth in infrastructure investment" in the first quarter, on top of tax cuts and the central bank's earlier interest rate cuts.

A property downturn, slowing economy and war in Ukraine loom large over this week's annual convening of China's legislature, with policymakers expected to focus on shoring up faltering growth.

A property downturn, slowing economy and war in Ukraine loom large over this week's annual convening of China's legislature, with policymakers expected to focus on shoring up faltering growth. The rubber-stamp parliament starting Saturday in Beijing gathers some 3,000 members of the National People's Congress (NPC) for highly choreographed meetings over bills, budgets and personnel changes. The ruling Communist Party uses the opportunity to tout its achievements while also setting the country's economic blueprint and GDP target for the year ahead. Also read | A day in the life of China’s persecuted Uighur community Much of the NPC's agenda is unknown until during -- or even after -- the multi-day meeting, with many sessions taking place behind closed doors. But this year, concerns are bound to centre on the country's sluggish economic growth, partly down to a crunch in the crucial property sector -- which makes up as much as a quarter of national output. Stringent "zero-Covid" measures including harsh lockdowns and closed borders have also been a major blow to manufacturing hubs, tourist centres and port cities. Meanwhile, the Russian invasion of Ukraine has raised the prospect of spiking food and oil prices, with fears over supplies of crucial commodities from the region being affected. Commerce Minister Wang Wentao admitted to journalists this week that China's economy faces "huge" pressure this year. Also read | How will the Russia-Ukraine conflict impact China's economic interests in Ukraine? GDP and stability Beijing traditionally announces its new economic growth target at Premier Li Keqiang's annual "state of the nation" speech at the NPC, followed by his rare -- but heavily stage-managed -- press conference. China's GDP growth slowed sharply in the final months of 2021 despite an earlier pandemic bounceback, as it grappled with tepid domestic demand and a property downturn. The country's communist leaders have long based their legitimacy on the argument that their model of government represents economic growth and continuity for China's massive population. But as much of the rest of the world now reopens, China is increasingly out of step, as continued COVID-19 restrictions weigh on consumer confidence. Maintaining stability will be crucial as the Communist Party gears up for a pivotal meeting this fall -- the 20th party congress -- that is expected to easily secure President Xi Jinping a third term. In 2020, there was no GDP target set at all, and last year Li announced a modest goal of "above six percent". Also read | China suggests this is the 'most important thing' that can end conflict between Russia and Ukraine Amid the unpredictability, analysts expect Beijing to announce a similarly open and attainable target this year. "We expect the growth target to be set at 'above five percent'," UOB economist Ho Woei Chen said in a recent report, adding that pace would match the past two years' average of 5.1 per cent. Iris Pang, ING's chief economist for Greater China, expected the range could be higher after the country easily exceeded last year's target. Watch | Report: China asked Russia to delay the attack on Ukraine till Olympics were over And infrastructure would probably form a key part of the government's support for the economy, predicted ANZ Research senior China strategist Zhaopeng Xing. He expected "double-digit growth in infrastructure investment" in the first quarter, on top of tax cuts and the central bank's earlier interest rate cuts.

Sluggish economic growth to overshadow upcoming Chinese Congress session

Construction and property sales have slumped. Small businesses have shut because of rising costs and weak sales. Debt-laden local governments are cutting the pay of civil servants.

China’s economy slowed markedly in the final months of last year as government measures to limit real estate speculation hurt other sectors as well. Lockdowns and travel restrictions to contain the coronavirus also dented consumer spending. Stringent regulations on everything from internet businesses to after-school tutoring companies have set off a wave of layoffs.

China’s National Bureau of Statistics said Monday that economic output from October through December was only 4% higher than during the same period a year earlier. That was a deceleration from the 4.9% growth in the third quarter, July through September.

The world’s demand for consumer electronics, furniture and other home comforts during the pandemic has produced record-setting exports for China, preventing its growth from stalling. Overall of last year, China’s economic output was 8.1% higher than in 2020, the government said. But much of the growth was in the first half of last year.

The snapshot of China’s economy, the main locomotive of global growth in the past few years, adds to expectations that the broader world economic outlook is beginning to dim. Making matters worse, the omicron variant of the coronavirus is now starting to spread in China, leading to more restrictions around the country and raising fears of renewed disruption of supply chains.

The slowing economy poses a quandary for China’s leaders. The measures they have imposed to address income inequality and rein in companies are part of a long-term plan to protect the economy and national security. But officials are wary of causing short-term economic instability, particularly in a year of unusual political importance.

Next month, Beijing hosts the Winter Olympics, which will focus an international spotlight on the country’s performance. In the fall, Xi Jinping, China’s leader, is expected to claim a third five-year term at a Communist Party congress.

Xi has sought to strike an optimistic note. “We have every confidence in the future of China’s economy,” he said in a speech on Monday to a virtual session of the World Economic Forum.

But with growth in his country slowing, demand slackening and debt still at near-record levels, Xi could face some of the biggest economic challenges since Deng Xiaoping began lifting the country out of its Maoist straitjacket four decades ago.

“I’m afraid that the operation and development of China’s economy in the next several years may be relatively difficult,” Li Daokui, a prominent economist and Chinese government adviser, said in a speech late last month. “Looking at the five years as a whole, it may be the most difficult period since our reform and opening up 40 years ago.”

China also faces the problem of a rapidly aging population, which could create an even greater burden on China’s economy and its labour force. The National Bureau of Statistics said Monday that China’s birthrate fell sharply last year and was now barely higher than the death rate.

Private Sector Struggles

As costs for many raw materials have risen and the pandemic has prompted some consumers to stay home, millions of private businesses have crumbled, most of them small and family owned.

That is a big concern because private companies are the backbone of the Chinese economy, accounting for three-fifths of output and four-fifths of urban employment.

Kang Shiqing invested much of his savings nearly three years ago to open a women’s clothing store in Nanping, a river town in Fujian province in southeast China. But when the pandemic hit a year later, the number of customers dropped drastically and never recovered.

As in many countries, there has been a broad shift in China toward online shopping, which can undercut stores by using less labour and operating from inexpensive warehouses. Kang was stuck paying high rent for his store despite the pandemic. He finally closed it in June.

“We can hardly survive,” he said.

Another persistent difficulty for small businesses in China is the high cost of borrowing, often at double-digit interest rates from private lenders.

Chinese leaders are aware of the challenges private companies face. Premier Li Keqiang has promised further cuts in taxes and fees to help the country’s many struggling small businesses.

On Monday, China’s central bank made a small move to reduce interest rates, which could help reduce slightly the interest costs of the country’s heavily indebted real estate developers. The central bank pushed down by about a tenth of a percentage point its interest rate benchmarks for one-week and one-year lending.

Construction Stalls

The building and fitting out of new homes has represented one-quarter of China’s economy. Heavy lending and widespread speculation have helped China erect the equivalent of 140 square feet of new housing for every urban resident in the past two decades.

This autumn, the sector faltered. The government wants to limit speculation and deflate a bubble that had made new homes unaffordable for young families.

China Evergrande Group is only the largest and most visible of a lengthening list of real estate developers in China that have run into severe financial difficulty lately. Kaisa Group, China Aoyuan Property Group and Fantasia are among other developers that have struggled to make payments as bond investors become more wary of lending money to China’s real estate sector.

As real estate companies try to conserve cash, they are starting fewer construction projects. And that has been a big problem for the economy. The price of steel reinforcing bars for the concrete in apartment towers, for example, dropped by one-quarter in October and November before stabilizing at a much lower level in December.

The decline in home prices in smaller cities has hurt the value of people’s assets, which in turn made them less willing to spend. Even in Shanghai and Beijing, apartment prices are no longer surging.

There have been faint hints of renewed government support for the real estate sector in recent weeks, but no sign of a return to lavish lending by state-controlled banks.

The financial distress of Evergrande “is a signal that money will be pushed from real estate to the stock market,” said Hu Jinghui, an economist who is the former chair of the China Alliance of Real Estate Agencies, a national trade group. “The policies can be loosened, but there can be no return to the past.”

Local Governments Feel the Pinch

The slowdown in the housing market has also hurt local governments, which rely on land sales as a key source of revenue.

The International Monetary Fund estimates that government land sales each year have been raising money equal to 7% of the country’s annual economic output. But in recent months, developers have curtailed land purchases.

Starved of revenue, some local governments have halted hiring and cut bonuses and benefits for civil servants, prompting widespread complaints on social media.

In Hangzhou, the capital of Zhejiang province, a civil servant’s complaint of a 25% cut in her pay spread quickly on the internet. The municipal government did not respond to a fax requesting comment. In northern Heilongjiang province, the city of Hegang announced that it would not hire any more “low-level” workers. City officials deleted the announcement from the government’s website after it drew public attention.

Some governments have also raised fees on businesses to try to make up for the shortfall.

Bazhou, a city in Hebei province, collected 11 times as much money in fines on small businesses from October through December as it did in the first nine months of last year. Beijing criticized the city for undermining a national effort to reduce the cost of doing business.

Pockets of Strength in Exports

Strong overseas demand for China’s exports, particularly consumer goods, spurred a national wave of new factory investments, up 13.5% last year from 2020.

Some areas of consumer spending have been fairly robust, notably the luxury sector, with sports cars and jewellery selling well. Retail sales rebounded 12.5% last year compared with pandemic-depressed levels in 2020. But retail sales fell in December from November, as coronavirus restrictions kept some shoppers at home.

Few anticipate that the government will allow a severe economic downturn this year, before the Communist Party congress. Economists expect the government to soften its restrictions on lending and step up government spending.

“The first half of the year will be challenging,” said Zhu Ning, deputy dean of the Shanghai Advanced Institute of Finance. “But then the second half will see a rebound.”

Construction and property sales have slumped. Small businesses have shut because of rising costs and weak sales. Debt-laden local governments are cutting the pay of civil servants.

Construction and property sales have slumped. Small businesses have shut because of rising costs and weak sales. Debt-laden local governments are cutting the pay of civil servants. China’s economy slowed markedly in the final months of last year as government measures to limit real estate speculation hurt other sectors as well. Lockdowns and travel restrictions to contain the coronavirus also dented consumer spending. Stringent regulations on everything from internet businesses to after-school tutoring companies have set off a wave of layoffs. China’s National Bureau of Statistics said Monday that economic output from October through December was only 4% higher than during the same period a year earlier. That was a deceleration from the 4.9% growth in the third quarter, July through September. The world’s demand for consumer electronics, furniture and other home comforts during the pandemic has produced record-setting exports for China, preventing its growth from stalling. Overall of last year, China’s economic output was 8.1% higher than in 2020, the government said. But much of the growth was in the first half of last year. The snapshot of China’s economy, the main locomotive of global growth in the past few years, adds to expectations that the broader world economic outlook is beginning to dim. Making matters worse, the omicron variant of the coronavirus is now starting to spread in China, leading to more restrictions around the country and raising fears of renewed disruption of supply chains. The slowing economy poses a quandary for China’s leaders. The measures they have imposed to address income inequality and rein in companies are part of a long-term plan to protect the economy and national security. But officials are wary of causing short-term economic instability, particularly in a year of unusual political importance. Next month, Beijing hosts the Winter Olympics, which will focus an international spotlight on the country’s performance. In the fall, Xi Jinping, China’s leader, is expected to claim a third five-year term at a Communist Party congress. Xi has sought to strike an optimistic note. “We have every confidence in the future of China’s economy,” he said in a speech on Monday to a virtual session of the World Economic Forum. But with growth in his country slowing, demand slackening and debt still at near-record levels, Xi could face some of the biggest economic challenges since Deng Xiaoping began lifting the country out of its Maoist straitjacket four decades ago. “I’m afraid that the operation and development of China’s economy in the next several years may be relatively difficult,” Li Daokui, a prominent economist and Chinese government adviser, said in a speech late last month. “Looking at the five years as a whole, it may be the most difficult period since our reform and opening up 40 years ago.” China also faces the problem of a rapidly aging population, which could create an even greater burden on China’s economy and its labour force. The National Bureau of Statistics said Monday that China’s birthrate fell sharply last year and was now barely higher than the death rate. Private Sector Struggles As costs for many raw materials have risen and the pandemic has prompted some consumers to stay home, millions of private businesses have crumbled, most of them small and family owned. That is a big concern because private companies are the backbone of the Chinese economy, accounting for three-fifths of output and four-fifths of urban employment. Kang Shiqing invested much of his savings nearly three years ago to open a women’s clothing store in Nanping, a river town in Fujian province in southeast China. But when the pandemic hit a year later, the number of customers dropped drastically and never recovered. As in many countries, there has been a broad shift in China toward online shopping, which can undercut stores by using less labour and operating from inexpensive warehouses. Kang was stuck paying high rent for his store despite the pandemic. He finally closed it in June. “We can hardly survive,” he said. Another persistent difficulty for small businesses in China is the high cost of borrowing, often at double-digit interest rates from private lenders. Chinese leaders are aware of the challenges private companies face. Premier Li Keqiang has promised further cuts in taxes and fees to help the country’s many struggling small businesses. On Monday, China’s central bank made a small move to reduce interest rates, which could help reduce slightly the interest costs of the country’s heavily indebted real estate developers. The central bank pushed down by about a tenth of a percentage point its interest rate benchmarks for one-week and one-year lending. Construction Stalls The building and fitting out of new homes has represented one-quarter of China’s economy. Heavy lending and widespread speculation have helped China erect the equivalent of 140 square feet of new housing for every urban resident in the past two decades. This autumn, the sector faltered. The government wants to limit speculation and deflate a bubble that had made new homes unaffordable for young families. China Evergrande Group is only the largest and most visible of a lengthening list of real estate developers in China that have run into severe financial difficulty lately. Kaisa Group, China Aoyuan Property Group and Fantasia are among other developers that have struggled to make payments as bond investors become more wary of lending money to China’s real estate sector. As real estate companies try to conserve cash, they are starting fewer construction projects. And that has been a big problem for the economy. The price of steel reinforcing bars for the concrete in apartment towers, for example, dropped by one-quarter in October and November before stabilizing at a much lower level in December. The decline in home prices in smaller cities has hurt the value of people’s assets, which in turn made them less willing to spend. Even in Shanghai and Beijing, apartment prices are no longer surging. There have been faint hints of renewed government support for the real estate sector in recent weeks, but no sign of a return to lavish lending by state-controlled banks. The financial distress of Evergrande “is a signal that money will be pushed from real estate to the stock market,” said Hu Jinghui, an economist who is the former chair of the China Alliance of Real Estate Agencies, a national trade group. “The policies can be loosened, but there can be no return to the past.” Local Governments Feel the Pinch The slowdown in the housing market has also hurt local governments, which rely on land sales as a key source of revenue. The International Monetary Fund estimates that government land sales each year have been raising money equal to 7% of the country’s annual economic output. But in recent months, developers have curtailed land purchases. Starved of revenue, some local governments have halted hiring and cut bonuses and benefits for civil servants, prompting widespread complaints on social media. In Hangzhou, the capital of Zhejiang province, a civil servant’s complaint of a 25% cut in her pay spread quickly on the internet. The municipal government did not respond to a fax requesting comment. In northern Heilongjiang province, the city of Hegang announced that it would not hire any more “low-level” workers. City officials deleted the announcement from the government’s website after it drew public attention. Some governments have also raised fees on businesses to try to make up for the shortfall. Bazhou, a city in Hebei province, collected 11 times as much money in fines on small businesses from October through December as it did in the first nine months of last year. Beijing criticized the city for undermining a national effort to reduce the cost of doing business. Pockets of Strength in Exports Strong overseas demand for China’s exports, particularly consumer goods, spurred a national wave of new factory investments, up 13.5% last year from 2020. Some areas of consumer spending have been fairly robust, notably the luxury sector, with sports cars and jewellery selling well. Retail sales rebounded 12.5% last year compared with pandemic-depressed levels in 2020. But retail sales fell in December from November, as coronavirus restrictions kept some shoppers at home. Few anticipate that the government will allow a severe economic downturn this year, before the Communist Party congress. Economists expect the government to soften its restrictions on lending and step up government spending. “The first half of the year will be challenging,” said Zhu Ning, deputy dean of the Shanghai Advanced Institute of Finance. “But then the second half will see a rebound.”

China’s economy is slowing, a worrying sign for the world

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

The world's economic output will exceed $100 trillion for the first time next year and it will take China a little longer than previously thought to overtake the United States as the No.1 economy, a report showed on Sunday.

British consultancy Cebr predicted China will become the world`s top economy in dollar terms in 2030, two years later than forecast in last year`s World Economic League Table report.

India looks set to overtake France next year and then Britain in 2023 to regain its place as the world's sixth-biggest economy, Cebr said.

"The important issue for the 2020s is how the world economies cope with inflation, which has now reached 6.8 per cent in the U.S.," said Cebr deputy chairman Douglas McWilliams.

"We hope that a relatively modest adjustment to the tiller will bring the non-transitory elements under control. If not, then the world will need to brace itself for a recession in 2023 or 2024."

The report showed Germany was on track to overtake Japan in terms of economic output in 2033. Russia could become a Top 10 economy by 2036 and Indonesia looks on track for ninth place in 2034.

The world's economic output will exceed $100 trillion for the first time next year and it will take China a little longer than previously thought to overtake the United States as the No.

The world's economic output will exceed $100 trillion for the first time next year and it will take China a little longer than previously thought to overtake the United States as the No.1 economy, a report showed on Sunday. British consultancy Cebr predicted China will become the world`s top economy in dollar terms in 2030, two years later than forecast in last year`s World Economic League Table report. India looks set to overtake France next year and then Britain in 2023 to regain its place as the world's sixth-biggest economy, Cebr said. "The important issue for the 2020s is how the world economies cope with inflation, which has now reached 6.8 per cent in the U.S.," said Cebr deputy chairman Douglas McWilliams. "We hope that a relatively modest adjustment to the tiller will bring the non-transitory elements under control. If not, then the world will need to brace itself for a recession in 2023 or 2024." The report showed Germany was on track to overtake Japan in terms of economic output in 2033. Russia could become a Top 10 economy by 2036 and Indonesia looks on track for ninth place in 2034.

World economy to top $100 trillion in 2022 for first time, India set to overtake France: Report

china where countries supported by stronger energy production and a moderation in raw material prices its factory output has grown faster than expected last month.

China's factory output rose 3.8% in November

China's industrial data is missing expectations and pressure is increasing on the Chinese economy. The new COVID outbreak has disrupted business in China

China's industrial data misses expectations as COVID outbreak disrupts business

China`s economy is still in the process of recovery, spokeswoman for the National Bureau of Statistics Liu Aihua said on Monday. 
 
Liu made the comments during a news briefing after the release of activity data for January and February which showed a further pickup in momentum. 
 
(More details awaited)

China`s economy is still in the process of recovery, spokeswoman for the National Bureau of Statistics Liu Aihua said on Monday. Liu made the comments during a news briefing after the release of activity data for January and February which showed a further pickup in momentum.

China`s economy is still in the process of recovery, spokeswoman for the National Bureau of Statistics Liu Aihua said on Monday. Liu made the comments during a news briefing after the release of activity data for January and February which showed a further pickup in momentum. (More details awaited)

China statistics bureau says economy still in recovery process

Even as China featured among the few countries that managed to post healthy growth in 2020 notwithstanding the severe economic and health impact of the coronavirus pandemic, several economists have questioned the veracity of the data. While the International Monetary Fund (IMF) projected a 7.9 per cent growth for China in 2021, it said that the dragon must allow its overburdened lenders to be liquidated for economic growth to be sustained in the medium term, the Nikkei Asia reported. 
 
The opaque nature of information flow from the country has added to the worry for think tanks and rating agencies across the world. 
 
Spanish economist Daniel Lacalle in his blog, about two months ago, said that China`s is a "planned GDP" and that the growth is not demand-driven but is pushed by a tactfully expanded government expenditure. 
 
"A planned GDP. The GDP of China is dictated by production, not demand. It is not an observed GDP but rather planned by the government together with the provinces. For this reason, many analysts scrutinize the data and deduct various factors, including the increase and valuation of inventories," Lacalle pointed out in his blog. 
 
However, he also noted that economic recovery is underway but "it is not dissimilar to that of many of the leading Asian countries". 
 
"It is not by chance that inventories of iron ore, automobiles and finished goods have risen to the highest level in seven months as the economy recovers. If the economic situation we're in the announced expansion, inventories would be falling rapidly when sold. Much is produced that is then not sold and remains in warehouses," Lacalle added. 
 
Interestingly, China also does not follow the practice of revising GDP figures. The final December figure "stands and is consolidated without question". 
 
China's rising debt problem 
 
As China has been expanding its hold over the world through the much-hyped Belt and Road Initiative (BRI) which runs across over 70 countries, its debt is rising continuously. 
 
The Washington-based Institute of International Finance (IIF) last year said that China`s debt was on track to hit a whopping 335 per cent of GDP. This however included debt across all sectors such as household, government, financial and non-financial corporate. 
 
The country`s overall level of debt is driven primarily by real estate, corporates and shadow banking. 
 
Deftly, China has kept direct borrowings by the central government at a reasonable level but the accounts of the local governments and its companies and banks are mired in a web which is difficult to analyze. 
 
The Committee for the Abolition of Illegitimate Debt, in a study done before the Covid-19 outbreak, highlighted that China`s overall debt calculation is complicated though "research has been able to estimate central government debt with precision". 
 
What makes it murky is the accounts of the local governments and state-owned enterprises. "The central government is not over-leveraged and benefits from ample foreign currency reserves. But regional governments have expanded unsafe financial operations since 2007, and often resort to off-the-counter loans or shadow banking. 
 
Analysts said that while the Chinese government had started the exercise of cleaning up the mess, the pandemic has derailed the drive. 
 
"While China`s lending traditionally comes from the major state-controlled banks, there has been a gradual shift towards less transparent alternative lending sources that can produce high-risk loans and contribute to China`s debt woes. This lending is at times done through smaller local and provincial banks that sell lightly regulated investments," wrote ChinaPower. 
 
The Harvard Business Review in an article pointed out that China has turned into a major global lender in the last two decades with outstanding claims exceeding more than 5 per cent of global GDP. Almost all of this lending is official, coming from the government and state-controlled entities. 
 
According to the HBR, "China has extended many more loans to developing countries than previously known" and the "systematic under-reporting of these loans has created a `hidden debt` problem? meaning that debtor countries and international institutions alike have an incomplete picture of how much countries around the world owe to China and under which conditions". 
 
It said that the Chinese state and its subsidiaries have lent about $1.5 trillion in direct loans and trade credits to more than 150 countries around the globe, making China the world`s largest official creditor. 
 
However, the country has never published any official data on this despite the huge lending size. 
 
Surprisingly, China is not a member of the Paris Club, an informal group of creditor nations with the aim to strike workable repayment solutions. Not just that. The country is also not part of the Organisation for Economic Co-operation and Development (OECD). Both Paris Club and the OECD maintain loan records of official creditors. 
 
China`s financial assistance is directed in the form of trade credits, foreign direct investment advances under the Belt and Road Initiative (BRI) besides direct loans. An analyst on condition of anonymity said that China`s immediate problem emerges from the fact that most of the countries that have benefited from the dragon`s loans have been "badly hit" by the coronavirus pandemic and are in no position to repay the debt.

Even as China featured among the few countries that managed to post healthy growth in 2020 notwithstanding the severe economic and health impact of the coronavirus pandemic, several economists have questioned the veracity of the data.

Even as China featured among the few countries that managed to post healthy growth in 2020 notwithstanding the severe economic and health impact of the coronavirus pandemic, several economists have questioned the veracity of the data. While the International Monetary Fund (IMF) projected a 7.9 per cent growth for China in 2021, it said that the dragon must allow its overburdened lenders to be liquidated for economic growth to be sustained in the medium term, the Nikkei Asia reported. The opaque nature of information flow from the country has added to the worry for think tanks and rating agencies across the world. Spanish economist Daniel Lacalle in his blog, about two months ago, said that China`s is a "planned GDP" and that the growth is not demand-driven but is pushed by a tactfully expanded government expenditure. "A planned GDP. The GDP of China is dictated by production, not demand. It is not an observed GDP but rather planned by the government together with the provinces. For this reason, many analysts scrutinize the data and deduct various factors, including the increase and valuation of inventories," Lacalle pointed out in his blog. However, he also noted that economic recovery is underway but "it is not dissimilar to that of many of the leading Asian countries". "It is not by chance that inventories of iron ore, automobiles and finished goods have risen to the highest level in seven months as the economy recovers. If the economic situation we're in the announced expansion, inventories would be falling rapidly when sold. Much is produced that is then not sold and remains in warehouses," Lacalle added. Interestingly, China also does not follow the practice of revising GDP figures. The final December figure "stands and is consolidated without question". China's rising debt problem As China has been expanding its hold over the world through the much-hyped Belt and Road Initiative (BRI) which runs across over 70 countries, its debt is rising continuously. The Washington-based Institute of International Finance (IIF) last year said that China`s debt was on track to hit a whopping 335 per cent of GDP. This however included debt across all sectors such as household, government, financial and non-financial corporate. The country`s overall level of debt is driven primarily by real estate, corporates and shadow banking. Deftly, China has kept direct borrowings by the central government at a reasonable level but the accounts of the local governments and its companies and banks are mired in a web which is difficult to analyze. The Committee for the Abolition of Illegitimate Debt, in a study done before the Covid-19 outbreak, highlighted that China`s overall debt calculation is complicated though "research has been able to estimate central government debt with precision". What makes it murky is the accounts of the local governments and state-owned enterprises. "The central government is not over-leveraged and benefits from ample foreign currency reserves. But regional governments have expanded unsafe financial operations since 2007, and often resort to off-the-counter loans or shadow banking. Analysts said that while the Chinese government had started the exercise of cleaning up the mess, the pandemic has derailed the drive. "While China`s lending traditionally comes from the major state-controlled banks, there has been a gradual shift towards less transparent alternative lending sources that can produce high-risk loans and contribute to China`s debt woes. This lending is at times done through smaller local and provincial banks that sell lightly regulated investments," wrote ChinaPower. The Harvard Business Review in an article pointed out that China has turned into a major global lender in the last two decades with outstanding claims exceeding more than 5 per cent of global GDP. Almost all of this lending is official, coming from the government and state-controlled entities. According to the HBR, "China has extended many more loans to developing countries than previously known" and the "systematic under-reporting of these loans has created a `hidden debt` problem? meaning that debtor countries and international institutions alike have an incomplete picture of how much countries around the world owe to China and under which conditions". It said that the Chinese state and its subsidiaries have lent about $1.5 trillion in direct loans and trade credits to more than 150 countries around the globe, making China the world`s largest official creditor. However, the country has never published any official data on this despite the huge lending size. Surprisingly, China is not a member of the Paris Club, an informal group of creditor nations with the aim to strike workable repayment solutions. Not just that. The country is also not part of the Organisation for Economic Co-operation and Development (OECD). Both Paris Club and the OECD maintain loan records of official creditors. China`s financial assistance is directed in the form of trade credits, foreign direct investment advances under the Belt and Road Initiative (BRI) besides direct loans. An analyst on condition of anonymity said that China`s immediate problem emerges from the fact that most of the countries that have benefited from the dragon`s loans have been "badly hit" by the coronavirus pandemic and are in no position to repay the debt.

Crouching Dragon: Experts raise doubts on data behind China growth story

<a href="https://www.wionews.com/world/us-supreme-court-lets-trump-use-disputed-funds-of-25-billion-for-border-wall-238745">US Supreme Court lets Trump use disputed funds of $2.5 billion for border wall</a>

The US Supreme Court on Friday handed President Donald Trump a victory by letting his administration redirect $2.5 billion in money approved by Congress for the Pentagon to help build his promised wall along the US-Mexico border even though lawmakers refused to provide funding.

<a href="https://www.wionews.com/world/four-dead-nine-injured-after-twin-quakes-hit-northern-philippines-238739">Eight dead, 60 injured after twin quakes hit northern Philippines</a>

At least eight people were killed and over dozen were injured when the northern Philippines was struck with twin earthquakes of magnitudes 5.4 and 5.9 on early Saturday, police said.

<a href="https://www.wionews.com/world/us-president-donald-trump-announces-controversial-asylum-deal-with-guatemala-238748">US President Donald Trump announces controversial asylum deal with Guatemala</a>

President Donald Trump announced Friday that a "landmark" asylum agreement has been reached with Guatemala, as the United States ratchets up pressure on its southern neighbours to stem the flow of migrants towards its border.

<a href="https://www.wionews.com/world/us-approves-sales-to-support-pakistans-f-16s-indias-c-17s-238754">US approves sales to support Pakistan's F-16s, India's C-17s</a>

Washington on Friday approved $125 million worth of support for Pakistan's F-16 warplanes, and also $670 worth of support for India's C-17 transport planes.

Approval to support US-built aircraft for the two south Asian rivals were approved by the US State Department, and announced simultaneously by the US Defense Security Cooperation Agency.

<a href="https://www.wionews.com/india-news/heavy-rain-lashes-mumbai-flooding-several-areas-seven-flights-cancelled-238751">Heavy rain lashes Mumbai flooding several areas, traffic severely affected</a>

Heavy rains lashed Mumbai in the last 24 hours flooding several areas and severely affecting the road, rail and air traffic.

US Supreme Court lets Trump use disputed funds of $2.5 billion for border wall The US Supreme Court on Friday handed President Donald Trump a victory by letting his administration redirect $2.

US Supreme Court lets Trump use disputed funds of $2.5 billion for border wall The US Supreme Court on Friday handed President Donald Trump a victory by letting his administration redirect $2.5 billion in money approved by Congress for the Pentagon to help build his promised wall along the US-Mexico border even though lawmakers refused to provide funding. Eight dead, 60 injured after twin quakes hit northern Philippines At least eight people were killed and over dozen were injured when the northern Philippines was struck with twin earthquakes of magnitudes 5.4 and 5.9 on early Saturday, police said. US President Donald Trump announces controversial asylum deal with Guatemala President Donald Trump announced Friday that a "landmark" asylum agreement has been reached with Guatemala, as the United States ratchets up pressure on its southern neighbours to stem the flow of migrants towards its border. US approves sales to support Pakistan's F-16s, India's C-17s Washington on Friday approved $125 million worth of support for Pakistan's F-16 warplanes, and also $670 worth of support for India's C-17 transport planes. Approval to support US-built aircraft for the two south Asian rivals were approved by the US State Department, and announced simultaneously by the US Defense Security Cooperation Agency. Heavy rain lashes Mumbai flooding several areas, traffic severely affected Heavy rains lashed Mumbai in the last 24 hours flooding several areas and severely affecting the road, rail and air traffic.

Global investors worried as China's major companies default

Economists noticed an interesting trend of China inking back-to-back deals on food grains and food products with multiple nations across the world. Most of the deals involve a massive transaction of food items. It has also signed deals with its adversaries, reflecting that the country is going probably going through a major food crisis.

China's food inflation rose by 13.2% in July 2020. Prices of most of the food products consumed by a common Chinese on a day-to-day basis have shot up, from cereals to meat products. The National Bureau of Statistics has revealed that the prices of most commonly consumed meat, pork has increased by 86%.

China is resorting to the aggressive import of food products from all over the world. The critical condition can be understood from the fact that the country is procuring almost all the major food items.

According to the China General Administration Customs, the country has also increased its grain imports during the first half of this year by 22.7%, leading to a food grain import measuring 74.51 million tons. Though China has been the largest producer of soybean for the past few years, yet it plans to import 40 million tons this year from its arch-rival USA.

Import data suggests that China's wheat import went to a seven-year high during June this year. It imported 910,000 tons of wheat during June 2020, which meant an increase of 197% on a year-on-year basis. Besides, it also imported 880,000 tons of corn, 680,000 tons of sorghum and 140,000 tons of sugar.

The harvest has been so low that China’s state grain reserve system could purchase only 45 million tons of wheat in June-July, reflecting a 17.2% decline from the past year. Observers believe that besides the low harvest, farmers are storing the food item with them and not storing with the government under apprehension regarding the ongoing food crisis.It is believed that the Chinese government is pressurizing the citizens to store their food grains with the government for enabling the country to project that the food crisis is not too severe.

The low production is also coupled with the intense floods in the Three Gorges and the Yangtze Basin, which washed away thousands of acres of fertile lands with standing crops. Floods have impacted the lives of 54.8 million people and have inflicted an economic loss of US$ 20.8 billion.

The locust swarm attack and the African Swine Flu Fever have also proved to be lethal for the country’s agriculture sector. The latter one is said to have killed a majority share of the pig population in the country, leading to a crisis in meat production.

The calamity has come at a time when the proportion of cultivable land in the country has been declining at a rapid rate. According to China's Ministry of Natural Resources, its cultivable land kept declining for four consecutive years in 2017, measuring 60,900 hectares as compared to the previous year.

In order to meet the deficit between food consumption and food production, China has started to purchase and lease out fertile lands and fields in many African, South American and ASEAN countries including Djibouti, Nigeria, Zimbabwe, Chile, Argentina, Cambodia, Laos, etc. China spent around US$ 94 billion to purchase agricultural lands abroad. The number seems to have increased in the past few years.

However, experts believe that China is also eyeing the fertile areas of its all-weather ally Pakistan. Besides exploiting the natural resources of Balochistan, now China plans to use Sindh as its hub for growing food crops. Though it has already established a certain amount of control over territories like GB, PoJK, Balochistan and given the less fertile terrains of these areas, China cannot utilize them to grow crops. Hence, Sindh is a new alternative. Another major advantage of controlling farm grains and growing crops in Sindh is the economical transportation cost of the agriculture products to China. Transportation from African or South American countries is expensive and is time taking.

For institutional sanction on using Pakistani land by China, the country recently went into an agreement on agriculture cooperation with Pakistan. China has now got ownership of several thousand acres of Pakistani land for the purpose of ‘demonstration projects’ in the field of agriculture.

The Chinese President seems to be increasingly concerned about the looming food crisis in the country. After running the campaign to stop food wastages, media censorship of food-related videos, and urging the Chinese not to waste the food, Xi Jinping is also seeking ideas from experts to handle the crisis. In a recent seminar with top scientists and businessmen, Jinping discussed the possible ways and sought ideas to reduce dependency on foreign countries, especially on food grains. The Chinese President is counting the importance of agriculture in his speeches in the past few visits of agriculture dominating Chinese provinces.

Declining consumption over insecurities due to the pandemic has also compelled the citizens to limit their consumption, leading to the recession of the economy. The markets are empty and people are not willing to spend. China’s Ministry of Commerce came up with a campaign titled ‘China Consumption Promotion Month’ to encourage Chinese citizens to accelerate consumption, organised between 8th September and 8th October. To further boost consumption, the Chinese government has started to issue coupons since March 2020 to prompt consumers to spend. According to the data of Alipay, local governments of more than 100 cities have issued digital coupons to enhance consumption.

From aggressive imports and foreign land deals to massive campaigns against food wastage and content censorship, China is making every possible effort to tackle the looming crisis. Even if it miserably fails, it plans to cover-up the news from the rest of the world. Several reports in the global media suggest that the world has apparently begun to know about China’s failure to entitle food security to its citizens that it has pledged to its citizens under the ‘six guarantees’ by the Chinese state.

China’s aggressive behaviour towards India, Taiwan, and Japan and ASEAN countries is only to divert the attention of the Chinese public over the economic crisis.

Interestingly, China has been in contradiction to its own data on agriculture, claiming that its economy is reviving despite the pandemic. However, experts feel that China has been manipulating the economic data for propaganda purpose. It is too early to conclude that the Chinese economy is on the recovery phase.

Economists noticed an interesting trend of China inking back-to-back deals on food grains and food products with multiple nations across the world. Most of the deals involve a massive transaction of food items.

Economists noticed an interesting trend of China inking back-to-back deals on food grains and food products with multiple nations across the world. Most of the deals involve a massive transaction of food items. It has also signed deals with its adversaries, reflecting that the country is going probably going through a major food crisis. China's food inflation rose by 13.2% in July 2020. Prices of most of the food products consumed by a common Chinese on a day-to-day basis have shot up, from cereals to meat products. The National Bureau of Statistics has revealed that the prices of most commonly consumed meat, pork has increased by 86%. China is resorting to the aggressive import of food products from all over the world. The critical condition can be understood from the fact that the country is procuring almost all the major food items. According to the China General Administration Customs, the country has also increased its grain imports during the first half of this year by 22.7%, leading to a food grain import measuring 74.51 million tons. Though China has been the largest producer of soybean for the past few years, yet it plans to import 40 million tons this year from its arch-rival USA. Import data suggests that China's wheat import went to a seven-year high during June this year. It imported 910,000 tons of wheat during June 2020, which meant an increase of 197% on a year-on-year basis. Besides, it also imported 880,000 tons of corn, 680,000 tons of sorghum and 140,000 tons of sugar. The harvest has been so low that China’s state grain reserve system could purchase only 45 million tons of wheat in June-July, reflecting a 17.2% decline from the past year. Observers believe that besides the low harvest, farmers are storing the food item with them and not storing with the government under apprehension regarding the ongoing food crisis.It is believed that the Chinese government is pressurizing the citizens to store their food grains with the government for enabling the country to project that the food crisis is not too severe. The low production is also coupled with the intense floods in the Three Gorges and the Yangtze Basin, which washed away thousands of acres of fertile lands with standing crops. Floods have impacted the lives of 54.8 million people and have inflicted an economic loss of US$ 20.8 billion. The locust swarm attack and the African Swine Flu Fever have also proved to be lethal for the country’s agriculture sector. The latter one is said to have killed a majority share of the pig population in the country, leading to a crisis in meat production. The calamity has come at a time when the proportion of cultivable land in the country has been declining at a rapid rate. According to China's Ministry of Natural Resources, its cultivable land kept declining for four consecutive years in 2017, measuring 60,900 hectares as compared to the previous year. In order to meet the deficit between food consumption and food production, China has started to purchase and lease out fertile lands and fields in many African, South American and ASEAN countries including Djibouti, Nigeria, Zimbabwe, Chile, Argentina, Cambodia, Laos, etc. China spent around US$ 94 billion to purchase agricultural lands abroad. The number seems to have increased in the past few years. However, experts believe that China is also eyeing the fertile areas of its all-weather ally Pakistan. Besides exploiting the natural resources of Balochistan, now China plans to use Sindh as its hub for growing food crops. Though it has already established a certain amount of control over territories like GB, PoJK, Balochistan and given the less fertile terrains of these areas, China cannot utilize them to grow crops. Hence, Sindh is a new alternative. Another major advantage of controlling farm grains and growing crops in Sindh is the economical transportation cost of the agriculture products to China. Transportation from African or South American countries is expensive and is time taking. For institutional sanction on using Pakistani land by China, the country recently went into an agreement on agriculture cooperation with Pakistan. China has now got ownership of several thousand acres of Pakistani land for the purpose of ‘demonstration projects’ in the field of agriculture. The Chinese President seems to be increasingly concerned about the looming food crisis in the country. After running the campaign to stop food wastages, media censorship of food-related videos, and urging the Chinese not to waste the food, Xi Jinping is also seeking ideas from experts to handle the crisis. In a recent seminar with top scientists and businessmen, Jinping discussed the possible ways and sought ideas to reduce dependency on foreign countries, especially on food grains. The Chinese President is counting the importance of agriculture in his speeches in the past few visits of agriculture dominating Chinese provinces. Declining consumption over insecurities due to the pandemic has also compelled the citizens to limit their consumption, leading to the recession of the economy. The markets are empty and people are not willing to spend. China’s Ministry of Commerce came up with a campaign titled ‘China Consumption Promotion Month’ to encourage Chinese citizens to accelerate consumption, organised between 8th September and 8th October. To further boost consumption, the Chinese government has started to issue coupons since March 2020 to prompt consumers to spend. According to the data of Alipay, local governments of more than 100 cities have issued digital coupons to enhance consumption. From aggressive imports and foreign land deals to massive campaigns against food wastage and content censorship, China is making every possible effort to tackle the looming crisis. Even if it miserably fails, it plans to cover-up the news from the rest of the world. Several reports in the global media suggest that the world has apparently begun to know about China’s failure to entitle food security to its citizens that it has pledged to its citizens under the ‘six guarantees’ by the Chinese state. China’s aggressive behaviour towards India, Taiwan, and Japan and ASEAN countries is only to divert the attention of the Chinese public over the economic crisis. Interestingly, China has been in contradiction to its own data on agriculture, claiming that its economy is reviving despite the pandemic. However, experts feel that China has been manipulating the economic data for propaganda purpose. It is too early to conclude that the Chinese economy is on the recovery phase.

Xi Jinping escalates border crisis to divert attention from China's economic woes

Overseas shipments in May fell 3.3% from a year earlier, after a surprising 3.5% gain in April, customs data showed on Sunday.

China’s exports drop in May as coronavirus pandemic hits

The Economic impact of coronavirus is still impossible to determine but it is widely clear that the outbreak is taking a toll on the Chinese economy.

Global Economy and the Coronavirus Outbreak

Coronavirus outbreak's economic impact

Once Chinese conglomerate and now state-owned group,&nbsp;Anbang Insurance Group made it second attempt to offload the lender as it put 35% stake in Chengdu Rural Commercial Bank for sale for 16.5 billion yuan ($2.4 billion).

In December last year, Anbang tried to sell Chengdu Rural Commercial Bank for 16.8 billion yuan. However, Anbang withdrew the offer in January without mentioning any reason.

The group was taken over by the government last year.

The planned sale&nbsp;comes as China attempts to tame financial and credit risks among the country's smaller lenders while Anbang, once among China's most aggressive dealmakers, conducts a slew of asset sales.

According to a report by Reuters, the potential investors include Chengdu Xingcheng Investment Group, a local government-backed investment vehicle.

In February 2018 the Chinese government seized control of the previously high-flying Anbang as part of a campaign to curb financial risk in the aftermath of a massive asset-buying spree by a handful of private-sector conglomerates.

China's financial regulators have also pushed local governments to take the lead in managing crises that have flared up among small lenders. Five regional banks have been hit by management or liquidity problems this year.

Anbang is the biggest shareholder of state-backed Chengdu Rural Commercial Bank.

In the event of multiple bids for Anbang's stake in the bank, the Beijing Financial Assets Exchange will conduct an auction that will conclude on Feb. 1, the filing said.

(With inputs from Reuters) 
&nbsp;

Once Chinese conglomerate and now state-owned group, Anbang Insurance Group made it second attempt to offload the lender as it put 35% stake in Chengdu Rural Commercial Bank for sale for 16.

Once Chinese conglomerate and now state-owned group, Anbang Insurance Group made it second attempt to offload the lender as it put 35% stake in Chengdu Rural Commercial Bank for sale for 16.5 billion yuan ($2.4 billion). In December last year, Anbang tried to sell Chengdu Rural Commercial Bank for 16.8 billion yuan. However, Anbang withdrew the offer in January without mentioning any reason. The group was taken over by the government last year. The planned sale comes as China attempts to tame financial and credit risks among the country's smaller lenders while Anbang, once among China's most aggressive dealmakers, conducts a slew of asset sales. According to a report by Reuters, the potential investors include Chengdu Xingcheng Investment Group, a local government-backed investment vehicle. In February 2018 the Chinese government seized control of the previously high-flying Anbang as part of a campaign to curb financial risk in the aftermath of a massive asset-buying spree by a handful of private-sector conglomerates. China's financial regulators have also pushed local governments to take the lead in managing crises that have flared up among small lenders. Five regional banks have been hit by management or liquidity problems this year. Anbang is the biggest shareholder of state-backed Chengdu Rural Commercial Bank. In the event of multiple bids for Anbang's stake in the bank, the Beijing Financial Assets Exchange will conduct an auction that will conclude on Feb. 1, the filing said. (With inputs from Reuters)

China's Anbang Insurance makes another attempt to sell stake in Chengdu bank

China enjoyed a better-than-expected pick-up in the key retail and industrial sectors in November, data showed Monday, providing a further boost to Beijing after finally agreeing a mini trade pact with the United States last week.

The readings come at the end of a tough year for the world's number two economy, which is expanding at its weakest rate for three decades as it is buffeted by the long-running trade war with Washington as well as a slowdown in global demand for its goods.

Industrial production increased by 6.2 per cent on-year last month, up from 4.7 per cent in October and the best reading in six months.

There was also positive news for the country's shops, with retail sales up 8.0 pe rcent, compared with a 7.2 per cent rise the month before.

The figures exceeded expectations, with analysts surveyed by Bloomberg predicting just 5.0 per cent growth in industrial production and 7.6 per cent in retail sales.

Fu Linghui, spokesman at the<a href="https://www.wionews.com/world/chinas-factory-prices-fall-faster-as-weak-demand-hits-economy-248722"> National Bureau of Statistics</a>, said the key economic indicators "performed better than expected" in the "face of mounting risks and challenges both at home and abroad".

But he warned there was still "downward pressure" on the Chinese economy owing to "increasing external instabilities and uncertainties".

Investment in fixed capital was up 5.2 per cent, the same as October and in line with predictions.

In November, Chinese shoppers set new records for spending during the annual "Singles' Day" buying spree, with e-commerce giant <a href="https://www.wionews.com/business-economy/hong-kongs-future-is-bright-says-alibaba-262275">Alibaba</a> saying consumers spent $38.3 billion on its platforms during the world's biggest 24-hour shopping event.

The figure was up 26 percent from the previous all-time high set last year.

China's economy is in an extended slowdown and the <a href="https://www.wionews.com/business-economy/alibaba-singles-day-sales-hit-1-billion-in-one-minute-eight-seconds-261250">Singles' Day</a> fire sale is viewed as a snapshot of consumer sentiment.

Economic growth slowed to six percent in the third quarter the most sluggish rate since 1990 as demand for exports cooled and Chinese consumers tightened their belts.

Fu said Beijing was on track to meet its full-year growth target of 6.0-6.5 per cent for 2019, but "must also acknowledge that the current international environment is still relatively complicated".

The partial trade deal had "reduced market uncertainty", he said.

But analysts said Monday's strong data was not necessarily a sign of long-lasting growth.

"We think this uptick will prove short-lived," said Martin Lynge Rasmussen, China economist at Capital Economics, warning of the impact of a squeeze on financing in the important real-estate sector.

"Downward pressure on growth is likely to resurface before long," he added

China enjoyed a better-than-expected pick-up in the key retail and industrial sectors in November, data showed Monday, providing a further boost to Beijing after finally agreeing a mini trade pact with the United States last week.

China enjoyed a better-than-expected pick-up in the key retail and industrial sectors in November, data showed Monday, providing a further boost to Beijing after finally agreeing a mini trade pact with the United States last week. The readings come at the end of a tough year for the world's number two economy, which is expanding at its weakest rate for three decades as it is buffeted by the long-running trade war with Washington as well as a slowdown in global demand for its goods. Industrial production increased by 6.2 per cent on-year last month, up from 4.7 per cent in October and the best reading in six months. There was also positive news for the country's shops, with retail sales up 8.0 pe rcent, compared with a 7.2 per cent rise the month before. The figures exceeded expectations, with analysts surveyed by Bloomberg predicting just 5.0 per cent growth in industrial production and 7.6 per cent in retail sales. Fu Linghui, spokesman at the National Bureau of Statistics, said the key economic indicators "performed better than expected" in the "face of mounting risks and challenges both at home and abroad". But he warned there was still "downward pressure" on the Chinese economy owing to "increasing external instabilities and uncertainties". Investment in fixed capital was up 5.2 per cent, the same as October and in line with predictions. In November, Chinese shoppers set new records for spending during the annual "Singles' Day" buying spree, with e-commerce giant Alibaba saying consumers spent $38.3 billion on its platforms during the world's biggest 24-hour shopping event. The figure was up 26 percent from the previous all-time high set last year. China's economy is in an extended slowdown and the Singles' Day fire sale is viewed as a snapshot of consumer sentiment. Economic growth slowed to six percent in the third quarter the most sluggish rate since 1990 as demand for exports cooled and Chinese consumers tightened their belts. Fu said Beijing was on track to meet its full-year growth target of 6.0-6.5 per cent for 2019, but "must also acknowledge that the current international environment is still relatively complicated". The partial trade deal had "reduced market uncertainty", he said. But analysts said Monday's strong data was not necessarily a sign of long-lasting growth. "We think this uptick will prove short-lived," said Martin Lynge Rasmussen, China economist at Capital Economics, warning of the impact of a squeeze on financing in the important real-estate sector. "Downward pressure on growth is likely to resurface before long," he added

China sees strong industrial, retail growth in November

China's economy expanded at its slowest rate in nearly three decades in the third quarter, hit by cooling domestic demand and a protracted US trade war, official data showed Friday.

The Chinese economy grew 6.0 per cent in July-September, compared with 6.2 per cent in the second quarter, according to the National Bureau of Statistics (NBS).

The reading -- in line with an AFP survey of 13 analysts -- is the worst quarterly figure since 1992 but within the government's target range of 6.0-6.5 per cent for the whole year.

The economy grew at 6.6 per cent in 2018.

"The national economy maintained overall stability in the first three quarters," said NBS spokesman Mao Shengyong.

"However, we must be aware that given the complicated and severe economic conditions both at home and abroad, the slowing global economic growth, and increasing external instabilities and uncertainties, the economy is under mounting downward pressure."

Services and high-tech manufacturing were the key areas of growth, while employment was "generally stable", he added.

Propping up economy

Beijing has stepped up support for the economy with major tax and rate cuts and has scrapped foreign investment restrictions in its stock market.

In its latest measure to shore up growth, the central bank said Wednesday it was pumping 200 billion yuan ($28 billion) into the financial system through its medium-term lending facility to banks, which is designed to maintain liquidity in the market.

But the efforts have not been enough to offset the blow from softening demand at home.

The trade conflict and weak domestic demand prompted the International Monetary Fund to lower its 2019 growth forecast for China from 6.2 per cent to 6.1 per cent on Tuesday.

The long-running trade war with the US has also chipped away at the Chinese economy.

This week, China reported weaker-than-expected import and export figures for September after Washington imposed new tariffs that month, triggering a tit-for-tat response from Beijing.

There were mixed signals for the economy in September.

Industrial output rose 5.8 per cent, from 4.4 per cent in August, led by a surge in demand for solar panels and electric vehicles, according to the NBS.

But fixed-asset investment slid to 5.4 per cent on-year in January-September, from 5.5 per cent in January-August, as the government warned against risky borrowing to build roads and bridges that could artificially pump up GDP in the short run.

China's army of consumers were slowly starting to open their wallets again, with retail sales edging up 7.8 per cent on-year in September, compared with 7.5 per cent in August.

"Despite a stronger September, pressure on the economic activity should intensify in the coming months," said Julian Evans-Pritchard of Capital Economics in a note.

He said he expects infrastructure spending to decline as China tries to rein in toxic debt and says the recent boom in property development "looks set to unwind".

"We expect monetary policy to be loosened before long in response, but it will take time for this to put a floor beneath economic growth," he added.

Let's make a deal

A "phase one" deal announced by US President Donald Trump last Friday after he met China's top negotiator Liu He in Washington offered a temporary reprieve from further tariff hikes.

But it did not roll back any of the stinging tariffs already imposed on hundreds of billions of dollars in trade between the economic powers, nor did it address another round of import taxes planned for December.

"A limited agreement will not resolve the underlying areas of disagreement between the two sides as long-term divergence in US and China national interest remains across trade, technology, investment and geopolitics," said Michael Taylor, a managing director for Moody's Investors Service.

"We expect further rounds of negotiation to remain challenging, with further potential for financial markets volatility."

China's commerce ministry spokesman Gao Feng said Thursday that its negotiators have "accelerated efforts" to hammer out the details of this mini-deal, and the two sides were aiming for an "early agreement".

Trump had said Wednesday that he hopes to sign the deal with his Chinese counterpart President Xi Jinping at the APEC summit in Chile next month.

But Gao declined to offer details on whether the text of the partial deal, or a full agreement, would be ready before the mid-November deadline.

China's economy expanded at its slowest rate in nearly three decades in the third quarter, hit by cooling domestic demand and a protracted US trade war, official data showed Friday.

China's economy expanded at its slowest rate in nearly three decades in the third quarter, hit by cooling domestic demand and a protracted US trade war, official data showed Friday. The Chinese economy grew 6.0 per cent in July-September, compared with 6.2 per cent in the second quarter, according to the National Bureau of Statistics (NBS). The reading -- in line with an AFP survey of 13 analysts -- is the worst quarterly figure since 1992 but within the government's target range of 6.0-6.5 per cent for the whole year. The economy grew at 6.6 per cent in 2018. "The national economy maintained overall stability in the first three quarters," said NBS spokesman Mao Shengyong. "However, we must be aware that given the complicated and severe economic conditions both at home and abroad, the slowing global economic growth, and increasing external instabilities and uncertainties, the economy is under mounting downward pressure." Services and high-tech manufacturing were the key areas of growth, while employment was "generally stable", he added. Propping up economy Beijing has stepped up support for the economy with major tax and rate cuts and has scrapped foreign investment restrictions in its stock market. In its latest measure to shore up growth, the central bank said Wednesday it was pumping 200 billion yuan ($28 billion) into the financial system through its medium-term lending facility to banks, which is designed to maintain liquidity in the market. But the efforts have not been enough to offset the blow from softening demand at home. The trade conflict and weak domestic demand prompted the International Monetary Fund to lower its 2019 growth forecast for China from 6.2 per cent to 6.1 per cent on Tuesday. The long-running trade war with the US has also chipped away at the Chinese economy. This week, China reported weaker-than-expected import and export figures for September after Washington imposed new tariffs that month, triggering a tit-for-tat response from Beijing. There were mixed signals for the economy in September. Industrial output rose 5.8 per cent, from 4.4 per cent in August, led by a surge in demand for solar panels and electric vehicles, according to the NBS. But fixed-asset investment slid to 5.4 per cent on-year in January-September, from 5.5 per cent in January-August, as the government warned against risky borrowing to build roads and bridges that could artificially pump up GDP in the short run. China's army of consumers were slowly starting to open their wallets again, with retail sales edging up 7.8 per cent on-year in September, compared with 7.5 per cent in August. "Despite a stronger September, pressure on the economic activity should intensify in the coming months," said Julian Evans-Pritchard of Capital Economics in a note. He said he expects infrastructure spending to decline as China tries to rein in toxic debt and says the recent boom in property development "looks set to unwind". "We expect monetary policy to be loosened before long in response, but it will take time for this to put a floor beneath economic growth," he added. Let's make a deal A "phase one" deal announced by US President Donald Trump last Friday after he met China's top negotiator Liu He in Washington offered a temporary reprieve from further tariff hikes. But it did not roll back any of the stinging tariffs already imposed on hundreds of billions of dollars in trade between the economic powers, nor did it address another round of import taxes planned for December. "A limited agreement will not resolve the underlying areas of disagreement between the two sides as long-term divergence in US and China national interest remains across trade, technology, investment and geopolitics," said Michael Taylor, a managing director for Moody's Investors Service. "We expect further rounds of negotiation to remain challenging, with further potential for financial markets volatility." China's commerce ministry spokesman Gao Feng said Thursday that its negotiators have "accelerated efforts" to hammer out the details of this mini-deal, and the two sides were aiming for an "early agreement". Trump had said Wednesday that he hopes to sign the deal with his Chinese counterpart President Xi Jinping at the APEC summit in Chile next month. But Gao declined to offer details on whether the text of the partial deal, or a full agreement, would be ready before the mid-November deadline.

China's Q3 GDP growth slumps to 6%, slowest in two decades

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

Young people in Hong Kong should look to the "north" rather than the West, as the region is deeply integrated into the Chinese economy while countries like Britain and the United States will do nothing for them, a British scholar said on Tuesday. Martin Jacques, an expert in Chinese affairs, believes that Hong Kong has emerged and prospered thanks to the reforms launched by late Chinese leader Deng Xiaoping, rather than with its own efforts.

Hong Kong youth should look 'north': British scholar

China and the United States have agreed to hold more trade talks in Beijing, Vice Premier Liu He said as US President Donald Trump ordered his trade chief to begin the process of imposing tariffs on all remaining imports from China.

Liu voiced a measured optimism on reaching a deal, but said there were "issues of principle" on which China would not back down.

"Negotiations have not broken down," Liu, China's chief negotiator in the talks, said in Washington on Friday, according to state television on Saturday. "Quite the opposite, I think small setbacks are normal and inevitable during the negotiations of both countries. Looking forward, we are still cautiously optimistic," Liu said.

Liu's optimism was tempered by US Treasury Secretary Steven Mnuchin, who told CNBC on Friday that there were no further talks with China planned "as of now."

Trump wrote on Twitter on Saturday that he thinks China felt they were being "beaten so badly" in the recent negotiations that they may as well wait for the 2020 presidential election "to see if they could get lucky &amp; have a Democrat win - in which case they would continue to rip-off the USA for $500 Billion a year."

"The only problem is that they know I am going to win," Trump wrote on Twitter, "... and the deal will become far worse for them if it has to be negotiated in my second term. Would be wise for them to act now, but love collecting BIG TARIFFS!"

The United States escalated a tariff war with China on Friday by hiking levies on $200 billion worth of Chinese goods in the midst of last-ditch talks to rescue a trade deal. Trump had delayed the tariffs as negotiations between Washington and Beijing were progressing.

On Friday, Trump issued orders for the tariff increase, saying China "broke the deal" by reneging on earlier commitments made during months of negotiations.

China strongly opposes the latest US tariff hike, and as a nation, has to respond to that, Liu told a small group of Chinese reporters in the video clip.

"Right now, both sides have reached mutual understanding in many things, but frankly speaking, there are also differences. We think these differences are significant issues of principle," Liu said. "We absolutely cannot make concessions on such issues of principle."

He added that talks would continue in Beijing, but gave no details. Underscoring a lack of progress in the talks, Trump ordered a further escalation of tariffs.

Trump's move would subject about $300 billion worth of Chinese imports to punitive tariffs, US Trade Representative Robert Lighthizer said in a statement on Friday. Lighthizer said a final decision has not been made on the new duties, which would come on top of an early Friday tariff rate increase, to 25% from 10%, on $200 billion worth of Chinese imports.

China's widely-read Global Times newspaper, which while published by the ruling Communist Party's official People's Daily newspaper does not speak for the government, said in a Sunday editorial that the United States has "seriously underestimated China's endurance".

"Washington tried to bring up terms that either harmed the sovereignty and dignity of China, or that were seriously unequal and unrealistic. Those requests have made the negotiations more difficult," the paper said.

China details differences

Three differences remain between the two countries, according to China's account of the latest talks.

One of those is over tariffs, Liu said, according to a transcript of the Q&amp;A published by Phoenix, a Hong Kong-based television station that is close to Beijing. China believes that tariffs were the genesis of the trade dispute, and that if both sides wanted to reach an agreement, then all tariffs must be eliminated, Liu said.

The second is about procurement, on which an initial consensus was reached between the leaders of the two countries in Argentina late last year. The two sides now have differing views on the volumes, Liu said. The third is over how balanced the text of the draft agreement should be, he said.

"Every nation has its dignity, so the text ought to be balanced," Liu said.

Sources told Reuters this week that China had deleted its commitments in the draft agreement that said it would change laws to resolve core complaints of the United States: theft of US intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services; and currency manipulation.

Liu denied the accusations of China's reneging on promises, saying China thought it was normal to make changes before a final deal. Both sides had differing views on how to phrase it, he said.

Liu said he hoped this issue would be resolved, so it was unnecessary to "overreact" to that point. Similar to Liu, Chinese state media said China would not give in on its core interests.

"China clearly requires that the trade procurement figures should be realistic; the text must be balanced and expressed in terms that are acceptable to the Chinese people and do not undermine the sovereignty and dignity of the country," the People's Daily newspaper said in a commentary on Saturday.

The trade war has weighed on the Chinese economy.

When asked about domestic concerns over how the latest tariffs could further pressure the economy, Liu said he was optimistic about China's economy in the longer term, adding that it had entered an up-cycle after bottoming out somewhat last year.

He said he believed the Chinese economy would maintain a stable and healthy trend despite some downward pressure, and that China had ample room for fiscal and monetary policy manoeuvres.

On Monday, hours after Trump said he intended to raise tariffs, the Chinese central bank cut the amount of reserves that some small and medium-sized banks need to hold, freeing up more funds for lending to cash-strapped firms.

China and the United States have agreed to hold more trade talks in Beijing, Vice Premier Liu He said as US President Donald Trump ordered his trade chief to begin the process of imposing tariffs on all remaining imports from China.

China and the United States have agreed to hold more trade talks in Beijing, Vice Premier Liu He said as US President Donald Trump ordered his trade chief to begin the process of imposing tariffs on all remaining imports from China. Liu voiced a measured optimism on reaching a deal, but said there were "issues of principle" on which China would not back down. "Negotiations have not broken down," Liu, China's chief negotiator in the talks, said in Washington on Friday, according to state television on Saturday. "Quite the opposite, I think small setbacks are normal and inevitable during the negotiations of both countries. Looking forward, we are still cautiously optimistic," Liu said. Liu's optimism was tempered by US Treasury Secretary Steven Mnuchin, who told CNBC on Friday that there were no further talks with China planned "as of now." Trump wrote on Twitter on Saturday that he thinks China felt they were being "beaten so badly" in the recent negotiations that they may as well wait for the 2020 presidential election "to see if they could get lucky & have a Democrat win - in which case they would continue to rip-off the USA for $500 Billion a year." "The only problem is that they know I am going to win," Trump wrote on Twitter, "... and the deal will become far worse for them if it has to be negotiated in my second term. Would be wise for them to act now, but love collecting BIG TARIFFS!" The United States escalated a tariff war with China on Friday by hiking levies on $200 billion worth of Chinese goods in the midst of last-ditch talks to rescue a trade deal. Trump had delayed the tariffs as negotiations between Washington and Beijing were progressing. On Friday, Trump issued orders for the tariff increase, saying China "broke the deal" by reneging on earlier commitments made during months of negotiations. China strongly opposes the latest US tariff hike, and as a nation, has to respond to that, Liu told a small group of Chinese reporters in the video clip. "Right now, both sides have reached mutual understanding in many things, but frankly speaking, there are also differences. We think these differences are significant issues of principle," Liu said. "We absolutely cannot make concessions on such issues of principle." He added that talks would continue in Beijing, but gave no details. Underscoring a lack of progress in the talks, Trump ordered a further escalation of tariffs. Trump's move would subject about $300 billion worth of Chinese imports to punitive tariffs, US Trade Representative Robert Lighthizer said in a statement on Friday. Lighthizer said a final decision has not been made on the new duties, which would come on top of an early Friday tariff rate increase, to 25% from 10%, on $200 billion worth of Chinese imports. China's widely-read Global Times newspaper, which while published by the ruling Communist Party's official People's Daily newspaper does not speak for the government, said in a Sunday editorial that the United States has "seriously underestimated China's endurance". "Washington tried to bring up terms that either harmed the sovereignty and dignity of China, or that were seriously unequal and unrealistic. Those requests have made the negotiations more difficult," the paper said. China details differences Three differences remain between the two countries, according to China's account of the latest talks. One of those is over tariffs, Liu said, according to a transcript of the Q&A published by Phoenix, a Hong Kong-based television station that is close to Beijing. China believes that tariffs were the genesis of the trade dispute, and that if both sides wanted to reach an agreement, then all tariffs must be eliminated, Liu said. The second is about procurement, on which an initial consensus was reached between the leaders of the two countries in Argentina late last year. The two sides now have differing views on the volumes, Liu said. The third is over how balanced the text of the draft agreement should be, he said. "Every nation has its dignity, so the text ought to be balanced," Liu said. Sources told Reuters this week that China had deleted its commitments in the draft agreement that said it would change laws to resolve core complaints of the United States: theft of US intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services; and currency manipulation. Liu denied the accusations of China's reneging on promises, saying China thought it was normal to make changes before a final deal. Both sides had differing views on how to phrase it, he said. Liu said he hoped this issue would be resolved, so it was unnecessary to "overreact" to that point. Similar to Liu, Chinese state media said China would not give in on its core interests. "China clearly requires that the trade procurement figures should be realistic; the text must be balanced and expressed in terms that are acceptable to the Chinese people and do not undermine the sovereignty and dignity of the country," the People's Daily newspaper said in a commentary on Saturday. The trade war has weighed on the Chinese economy. When asked about domestic concerns over how the latest tariffs could further pressure the economy, Liu said he was optimistic about China's economy in the longer term, adding that it had entered an up-cycle after bottoming out somewhat last year. He said he believed the Chinese economy would maintain a stable and healthy trend despite some downward pressure, and that China had ample room for fiscal and monetary policy manoeuvres. On Monday, hours after Trump said he intended to raise tariffs, the Chinese central bank cut the amount of reserves that some small and medium-sized banks need to hold, freeing up more funds for lending to cash-strapped firms.

China still 'cautiously optimistic' on US trade talks despite new tariffs

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