Posts tagged ‘HSBC’

14/01/2016

Economists React: China’s December Trade Data May Mean Worst Is Over – China Real Time Report – WSJ

Better-than-expected export and import data in December suggest the beginning of a modest improvement in trade despite recent turmoil in Chinese financial markets, economists say, even as a weaker yuan helps exporters.

China’s exports in December were off 1.4% from a year earlier, a smaller decline than November’s 6.8% or the median 8% forecast of 15 economists surveyed by the Wall Street Journal. Imports were down 7.6%, compared with November’s 8.7% and the 11% median forecast.

Following are excerpts from economists’ views on Wednesday’s trade data, edited for style and length:

The idea that China needs to devalue its currency to reflect a weakening export sector is not borne out by the 2015 trade figures, which show that China gained world-wide market share in a tough global trading environment. The past couple of months, we’ve seen exports surprise on the upside. Worries that something is going on in China behind the scenes, that real compelling economic fundamentals are pushing the yuan weaker, is inconsistent with what we’re seeing on the trade front.—Tim Condon, ING Group ING +0.96%

China’s December trade data was reassuring—indicating that, despite the turmoil on the stock and foreign-exchange markets, growth dynamics in the real economy are evolving more gradually and may actually be improving somewhat. The improvement in exports suggests that the global goods trade gained some momentum toward the end of 2015, with China helped by a weaker yuan. Headline December goods import data were down 7.6%, but import volumes have started to improve. We estimate import volumes were up 7.5% year on year in December, mainly due to better “normal imports” used in China’s own economy (rather than re-exported), implying a pickup in domestic demand momentum at the end of 2015.—Louis Kuijs, Oxford Economics

Better-than-expected trade data hint that the yuan depreciation in December—the currency fell 1.5% against the dollar—could have boosted external demand. For the year, China’s exports dropped by 2.8% and imports plunged by 14.1%. The underperformance of imports reflects sluggish demand for commodities as China moves toward a more consumption-driven growth model. It also highlights the deleveraging under way in China’s manufacturing sector because of the property slowdown. The mixed picture illustrated by China’s trade figures convinced us that growth will be under pressure. Also, China could steer further yuan depreciation at an appropriate pace and time to support economic growth and facilitate the deleveraging in many sectors plagued by overcapacity.—Zhou Hao, Commerzbank AG

China’s better-than-forecast trade figures may signal the beginning of a modest improvement as the yuan stabilizes against a weighted basket of currencies. That could translate into export growth of 5% to 7% and import growth of 1% to 2% this year. Demand may not be a big driver, but China is becoming more competitive with its exchange rate.—Ding Shuang, Standard Chartered STAN.LN +0.35%

China’s better-than-expected export data in December was mainly due to the world’s recovering appetite for exports from China, but its sustainability is still an open question. The devaluation of the yuan might have played a role in boosting exports, though it wasn’t the main driver. To what extent the yuan will influence exports this year is uncertain, given the central bank’s intervention in the foreign-exchange market. But January export figure should be relatively positive since 2015 provided a weak base for comparison.—Ma Xiaoping, HSBC HSBA.LN +0.49%

Source: Economists React: China’s December Trade Data May Mean Worst Is Over – China Real Time Report – WSJ

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20/05/2015

China Unveils Blueprint to Upgrade Manufacturing Sector – China Real Time Report – WSJ

China unveiled an ambitious plan to enhance the competitiveness of its manufacturing sector by encouraging innovation and raising efficiency in an effort to boost economic growth. As the WSJ reports:

The blueprint, titled “Made in China 2025,” comes as China’s factories are struggling with sluggish demand, increasing competition from other developing economies and a slowing domestic economy.

The manufacturing sector is facing new challenges: bigger constraints from the environment and resources, rising labor costs and a notable slowdown in investment and exports, the State Council, or cabinet, said on the main government website Tuesday.

“The key to creating a new driver of economic growth…lies in the manufacturing sector,” it said.

The government vowed to boost 10 high-technology industrial sectors including robotics, aerospace, new-energy vehicles and advanced transport.

via China Unveils Blueprint to Upgrade Manufacturing Sector – China Real Time Report – WSJ.

05/03/2015

China 2015 defense budget to grow 10.1 pct, lowest in 5 years – Xinhua | English.news.cn

China on Thursday announced a 10.1-percent rise in its national defense budget in 2015, the lowest growth in five years as the country confronts mounting pressure in the face of an economic slowdown.

According to a budget report released shortly before the country’s top legislature starts its annual session, the government plans to raise defense budget to 886.9 billion yuan (about 144.2 billion U.S. dollars).

That would make China the second largest military spender in the world following the U.S., whose defense budget amounted to 600.4 billion U.S. dollars in 2013.

Nonetheless, the 10.1-percent rise represented the lowest expansion in China since 2010, when the defense budget was set to grow by 7.5 percent.

The figure has thereon been riding on a multi-year run of double-digit increases, expanding 12.2 percent last year.

Thursday’s budget report did not explain the rationale behind this year’s abated growth, but a government work report to be presented by Chinese Premier Li Keqiang may offer some clues.

According to the report, national defense development would be coordinated with the country’s economic growth.

The Chinese economy grew 7.4 percent in 2014, registering the weakest annual expansion in more than two decades. The government set this year’s growth target to approximately 7 percent, brewing new concerns that the world’s economic powerhouse is losing steam.

But the report played down such concerns, stressing that China is now in a “new normal” state, where a balance ought to be stricken between growth and structural optimization.

via China 2015 defense budget to grow 10.1 pct, lowest in 5 years – Xinhua | English.news.cn.

28/01/2015

China plans to set 2015 growth target at ‘around 7 percent’ – sources | Reuters

China plans to cut its growth target to around 7 percent in 2015, its lowest goal in 11 years, sources said, as policymakers try to manage slowing growth, job creation and pursuing reforms intended to make the economy more driven by market forces.

The growth target, which is set to be announced by Premier Li Keqiang at the annual parliament session in March, was endorsed by top party leaders and policymakers at a closed-door Central Economic Conference in December, said a number of people with knowledge of the outcome of meeting who spoke to Reuters.

The target, which is in line with market expectations, has not been previously reported.

“This year’s economic growth target will be around 7 percent, but the 7 percent should be the bottom line,” said one of the sources, an influential economist who advises the government.

via Exclusive: China plans to set 2015 growth target at ‘around 7 percent’ – sources | Reuters.

05/11/2014

India’s Services Activity Stagnates in October – India Real Time – WSJ

India’s services sector stagnated in October following five months of expansion, but industry executives remain optimistic that activity will strengthen in the coming year as the economy steadily recovers.

The seasonally-adjusted Service Sector Business Activity Index fell to 50.0 from 51.6 in September, according to a HSBC HSBA.LN -0.57% index released Wednesday. A figure above 50 indicates expansion while one below points to a contraction.

Underpinning the stagnation was weaker new business growth. Orders received by service sector firms increased at the weakest pace since May, HSBC saHSBA.LN +1.01%id.

Some sectors such as post and telecommunications showed strength, but their performance was offset by contraction in others such as the hospitality sector, HSBC added.

“On the positive side, business confidence rose to the strongest in three months, with the hospitality sector being most upbeat about the outlook,” HSBC joint head of Asian economic research Frederic Neumann said.

via India’s Services Activity Stagnates in October – India Real Time – WSJ.

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22/10/2014

Diesel Deregulation Frees Up Billions for India to Spend More Wisely – India Real Time – WSJ

India’s decision to end government control of diesel fuel prices will save the government billions of dollars which can be better spent on more pressing needs such as building schools, roads and ports, analysts say.

India announced over the weekend that it would end a decades-old policy of controlling the retail price of diesel fuel. Providing diesel at below-market rates cost the government about $10 billion last year, hampering India’s ability to spend on other things.

The government had given up control over the prices of gasoline back in 2010 but had continued to regulate prices of diesel – the primary fuel used in trucks and tractors as well as for running generators used to power irrigation pumps.

“It shields the government’s finances from volatility in global oil prices, because of which the subsidy bill often went up,” said Radhika Rao, an economist at DBS Bank.

HSBC estimates that the diesel deregulation will drop fuel subsidy bill to around 0.4% of gross domestic product, half of the 0.8% of GDP it paid last year.

“Our estimate is that over the next few years, fuel subsidies should remain contained,” said Prithviraj Srinivas, an economist at HSBC.

Diesel subsidies cost India close to $50 billion over the last five years, economists say. If India sticks to its guns and lets fuel prices meander with global markets, it will no longer have to foot that kind of unproductive expense. Instead, it can now choose to lower its fiscal deficit or spend more on infrastructure development or social development programs.

Analysts say the government’s fiscal deficit target of 4.1% of GDP this fiscal year – a level that many analysts had thought optimistic – now looks within reach.

via Diesel Deregulation Frees Up Billions for India to Spend More Wisely – India Real Time – WSJ.

03/07/2014

China services sector booms in June, suggest economy steadying | Reuters

Activity in China’s services sector expanded at its fastest pace in 15 months in June, a private survey showed on Thursday, reinforcing signs that the broader economy is stabilizing.

A worker wipes sweat on his forehead next a man taking a nap on a bench, in Beijing June 23, 2014.  REUTERS/Kim Kyung-Hoon

The services purchasing managers’ index (PMI) compiled by HSBC/Markit rebounded to 53.1 in June from 50.7 in May, well above the 50-point level that demarcates expansion in activity from contraction.

“The expansion in the service sector reinforces the recovery seen in the manufacturing sector, and signaled a broad-based improvement over the month,” said Qu Hongbin, chief economist for China at HSBC.

via China services sector booms in June, suggest economy steadying | Reuters.

06/06/2014

China’s services sector grows apace, mirroring rebound in manufacturing | South China Morning Post

China’s services sector grew at its fastest pace in six months last month as new orders rebounded, an official survey showed, reinforcing hopes that the economy may be steadying after a tumultuous few months.

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The official non-manufacturing purchasing managers index (PMI) climbed to 55.5 from April’s 54.8, the National Bureau of Statistics said. That is well above the 50-point level that separates an expansion from a contraction in activity.

In a sign of buoyancy in the sector, new orders rebounded to an eight-month high of 52.7 from April’s 50.8. Business expectations also held their ground at a solid 60.7, compared with April’s 61.5.

The pick-up in the services PMI echoes a rebound in the factory sector, which turned in its best performance in four months last month as export orders improved, although activity still contracted, a private survey showed yesterday.

The final reading of the HSBC/Markit PMI for May rose to 49.4 from 48.1 in April, although lower than a preliminary “flash” reading of 49.7.

The final PMI was weaker than the flash reading because of an upward revision of the inventory of finished goods, HSBC said.

via China’s services sector grows apace, mirroring rebound in manufacturing | South China Morning Post.

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01/05/2014

How Women Lost Out as China’s Property Market Boomed – Businessweek

In 2005, Zhang Yuan and her husband bought an apartment in Beijing for $30,000. Seven years later, in 2012, the same apartment was worth $317,000. Zhang, a professional woman in her 30s, and her husband both contributed money to the down payment and mortgage payments. Only her husband’s name appears on the property deed.

Beijing's central business District is home to high-end housing

At the time the young couple bought their home, Zhang wasn’t thinking much about legal formalities. Men—still regarded as the ostensible heads of households in China—have commonly registered property in their own names.

Since China’s Supreme Court issued a new interpretation of the country’s Marriage Law in 2011, Zhang’s has had second thoughts. The law now stipulates that if a couple divorces and only one person’s name is on the deed, that person—usually a “he”—walks away with full ownership of the marital home.

Since she took two years off work to care for her young child, Zhang has had trouble climbing back onto the career ladder. Today she worries more about money—and her financial dependence on her husband.

According to a 2012 Horizon Research and IFeng.com survey of homeowners in China’s leading cities, men’s names appear on property deeds for marital homes 80 percent of the time, while women’s names appear on just 30 percent of them. “The law is so unfair to women,” Zhang told sociologist Leta Hong Fincher, author of a new book, Leftover Women: The Resurgence of Gender Inequality in China.

The upshot, as Fincher’s book argues, is that China’s women have a claim that is tenuous, at best, to the country’s burgeoning real estate wealth. “Chinese women have largely missed out on what is arguably the biggest accumulation of residential real-estate wealth in history, valued at around 3.3 times China’s [gross domestic product], according to figures from the bank HSBC,” she writes. “That amounted to over $27 trillion at the end of 2012.”

via How Women Lost Out as China’s Property Market Boomed – Businessweek.

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25/03/2014

Why China’s Manufacturing Sector Has Hit a Wall – Businessweek

More bad economic news out of China: A key indicator released on March 24 showed that the manufacturing sector of the world’s second-largest economy contracted for the fifth straight month.

The HSBC and Markit purchasing managers’ index fell to 48.1 in March, below the 48.7 expected by analysts in a Bloomberg News survey (a number above 50 indicates growth). “The weakness appears even more pronounced given that there is usually a seasonal rebound after the Chinese New Year holiday,” said Julian Evans-Pritchard, China economist at London-based Capital Economics, in a March 24 note.

The lackluster showing of the so-called Flash PMI (usually based on results from 85 percent to 90 percent of companies surveyed; the final reading will be released April 1) follows weak investment, industrial production, and export numbers in the first two months. “The old growth engine is losing steam,” Chen Xingdong, chief China economist at BNP Paribas in Beijing, told Bloomberg News.

via Why China’s Manufacturing Sector Has Hit a Wall – Businessweek.

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