China’s economy is paying the price for the nation’s Covid Zero policy, with industrial output and consumer spending sliding to the worst levels since the pandemic began and analysts warning of no quick recovery, Bloomberg News reported. Industrial output unexpectedly fell 2.9% in April from a year ago, while retail sales contracted 11.1% in the period, weaker than a projected 6.6% drop. The unemployment rate climbed to 6.1% and the youth jobless rate hit a record. Investors responded by selling everything from Chinese shares to US index futures and oil.
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Chinese financial authorities on Sunday allowed a further cut in mortgage loan interest rates for some home buyers, in another push to prop up its property market and revive a flagging engine of the world's second-largest economy, Reuters reported. For purchases of first homes, commercial banks can reduce the lower limit of interest rates on home loans by 20 basis points, based on the corresponding tenor of benchmark Loan Prime Rates (LPRs), the People's Bank of China (PBOC) and China's Banking and Insurance Regulatory Commission said in a statement.
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Exiled Chinese businessman Guo Wengui has said that he will drop his personal bankruptcy case because he says he does not have the money to cover the associated legal costs, Reuters reported. Guo, the former real estate magnate who fled China for the U.S. in 2014 ahead of corruption charges, said in court papers filed on Wednesday that he would not contest a call for his chapter 11 case to be thrown out by a fund that loaned money to Guo's companies.
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Sunac China, once one of the country’s best-performing developers, failed to make an overdue interest payment on a U.S. dollar bond, marking a comedown for founder Sun Hongbin, who had tried for months to prevent his property giant from spiraling into default, the Wall Street Journal reported. Tianjin-based Sunac on Thursday said it couldn’t cobble together enough money to make a $29.5 million bond-coupon payment by the end of a 30-day grace period.
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For decades, the world has depended on China as a massive factory floor and market. As the country’s economic growth crumbles, the pain is spreading globally, the Wall Street Journal reported. Lockdowns aimed at stamping out Covid-19 are throttling activity in the world’s second-largest economy. Overseas demand for China’s exports is fading as economies wrestle with surging prices and rising interest rates. The effects of China’s slowdown are showing up everywhere from German factories to Australian tourist spots.
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China's central bank said on Monday it would step up support for the slowing economy, while closely watching domestic inflation and monitoring policy adjustments by developed economies, Reuters reported. The People's Bank of China (PBOC) will keep liquidity reasonably ample, prioritise stability and take steps to boost confidence, the bank said in its first-quarter monetary policy implementation report.
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As inflation soars around the world, the world’s second-largest economy has kept it at bay. Consumer prices in China increased just 1.5% in March from a year earlier, after rising 0.9% in 2021 from the year before, WSJ Pro Bankruptcy reported. By contrast, the U.S. annual inflation rate was 8.5% in March and 7.5% in 2021, the steepest since 1982. In the eurozone, annual inflation reached a record 7.5% in April. Some 71% of 109 emerging and developing economies experienced 5% or higher inflation in 2021, twice as large as at the end of 2020, the World Bank says.
China's new yuan loans are expected to have dropped in April after a rebound in March as credit demand weakened, a Reuters poll showed, even as the central bank keeps policy accommodative to support the slowing economy, Reuters reported. The Chinese economy has taken a hit as authorities raced to stop the spread of record COVID-19 cases, which have led to a full or partial lockdown in dozens of Chinese cities, including a city-wide shutdown in the commercial hub of Shanghai in April.
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China's central bank said on Friday it launch a 100 billion yuan ($15 billion) relending facility to support the transport, logistics and storage sectors which have been hit hard by COVID-19, Reuters reported. The People's Bank of China (PBOC) will better combine its broad-based and structural policy instruments, and constantly optimise its structural policy system, it said in a statement posted on its Wechat account.
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A business group warned on Thursday that China’s “dynamic zero Covid” policies have left European companies considerably less willing to continue investing in the country, the New York Times reported. A survey by the European Union Chamber of Commerce in China found that the tone among European businesses in the country had soured since January, when a survey found broad optimism and plans for further investment.
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