{"id":78237,"date":"2023-10-29T18:07:55","date_gmt":"2023-10-29T22:07:55","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/chinas-economy-shows-signs-of-stabilizing-and-a-slower-recovery\/"},"modified":"2023-10-29T18:07:59","modified_gmt":"2023-10-29T22:07:59","slug":"chinas-economy-shows-signs-of-stabilizing-and-a-slower-recovery","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=78237","title":{"rendered":"China’s Economy Shows Signs of Stabilizing\u2014and a Slower Recovery"},"content":{"rendered":"
\n

China\u2019s economy is showing signs of stabilizing but the improvements are decelerating. That could leave it in an L-shaped recovery\u2014where the economy doesn\u2019t see an upturn\u2014that is unlikely to excite investors.<\/p>\n

The
\n iShares MSCI China ETF
\n (ticker: MCHI) is down 11% so far this year. China\u2019s recovery from three years of Covid restrictions has underwhelmed, there are concerns about the country\u2019s longer term growth prospects, and geopolitical tensions loom.<\/p>\n

\n

While most analysts expect China to hit its 5% economic growth target, that may keep officials from bigger stimulus efforts, resulting in a recovery that is still anemic. <\/p>\n

Indeed, a spate of October data from independent research firm China Beige Book show areas such as the property market still struggling to find a bottom, while there has been a slowdown in consumer spending.<\/p>\n

Housing sales have softened in October from a month earlier and commercial real estate has had its worst showing this year. Both factory production and domestic orders also slowed.<\/p>\n

Consumer spending is cooling, with households pulling back from big-ticket items including cars and appliances. They also are reducing their revenge spending on travel and dining out in recent months, according to China Beige Book.<\/p>\n

Still, analysts are feeling more confident Beijing will do what is needed to create some stability, especially after it approved an additional $1 trillion renminbi government bond issuance to support infrastructure investment.<\/p>\n

The debt will be issued not by local governments but by the sovereign, pushing headline deficit to 3.8% of GDP. It is a surprise move indicating political will to put a floor under economic activity, but also the latest signal of pain in the economy, says TS Lombard\u2019s Rory Green in a note to clients.<\/p>\n

Central authorities are trying to put a floor on equities, with reports Central Huijin Investment Limited\u2014which is a part of the sovereign-wealth fund\u2014bought exchange-traded funds. And authorities are trying to limit weakness in the yuan as part of stimulus efforts, he adds.<\/p>\n

The next guideposts are a Politburo meeting in November and a Central Economic Work Conference in December that could offer clues to next year\u2019s growth and fiscal outlook. <\/p>\n

Green expects more emphasis on reallocating resources to technology sectors aligned with Beijing\u2019s efforts to become more self-reliant, and a possible plan on how officials resolve local government debt burden.<\/p>\n

Write to Reshma Kapadia at reshma.kapadia@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

China\u2019s economy is showing signs of stabilizing but the improvements are decelerating. That could leave it in an L-shaped recovery\u2014where the economy doesn\u2019t see an upturn\u2014that is unlikely to excite investors. The iShares MSCI China ETF (ticker: MCHI) is down 11% so far this year. China\u2019s recovery from three years of Covid restrictions has underwhelmed, […]<\/p>\n","protected":false},"author":1,"featured_media":78238,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-78237","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nChina's Economy Shows Signs of Stabilizing\u2014and a Slower Recovery | iFintechWorld<\/title>\n<meta name=\"description\" content=\"China\u2019s economy is showing signs of stabilizing but the improvements are decelerating. 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