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China
China is keeping its hand firmly on the yuan, supporting the currency via the official daily reference rate after it slid to the weakest level since 2022 at year-end in offshore trading, Bloomberg News reported. The People’s Bank of China set the so-called fixing, which confines yuan’s trading onshore to a 2% range on either side, at 7.1879 per dollar on Thursday. That’s little changed from the prior reading. But it was 1,323 pips stronger than forecast in a Bloomberg survey, the largest difference since July.
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China’s manufacturing activity slowed its pace of expansion in December, as investors wait for more economic stimulus when Donald Trump — who is threatening tariffs on Chinese exports — returns to the White House, Bloomberg News reported. The Caixin manufacturing purchasing managers index fell to 50.5 from 51.5 in November, according to a statement released by Caixin and S&P Global on Thursday. While any reading above 50 indicates an expansion of activity, the figure was a disappointment compared with the median forecast of 51.7 by economists.
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China’s central bank injected 1.7 trillion yuan ($233 billion) of cash in December, dialing up liquidity support for the economy and financial markets at year-end, Bloomberg News reported. The People’s Bank of China conducted 1.4 trillion yuan in outright reverse repurchase agreements using three- and six-month contracts, aiming to maintain sufficient liquidity in the banking system, it said in a statement Tuesday. This follows injections of 800 billion yuan and 500 billion yuan in the past two months through the new tool introduced in October.
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China's manufacturing activity barely grew in December though services and construction recovered, an official survey showed on Tuesday, suggesting policy stimulus is trickling into some sectors as the economy braces for new trade risks, Reuters reported. The National Bureau of Statistics (NBS) purchasing managers' index (PMI) slowed to 50.1 in December from 50.3 a month prior, staying above the 50-mark separating growth from contraction. China's $18 trillion economy has struggled to recover from the pandemic amid weak consumption and investment, and a protracted property crisis.
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In China's take on the TV series “Squid Game,” fraudsters are preying on the financially distressed in a slumping economy with promises of prize money, debt restructuring and other schemes that are not always what is promised, Reuters reported. Unlike the dystopian South Korean TV series, which returns to the small screen for a second season on Thursday, Chinese players taking on "self-discipline" challenges do not risk their lives if they lose.
Efforts will continue in 2025 to stabilize and prevent further declines in China's real estate market, China Construction News reported, citing a work conference held by the housing regulator on Tuesday and Wednesday, according to Reuters. China will vigorously promote the reform of the commercial housing sales system, and expand the scope of urban village renovation beyond the addition of 1 million units, the report said.
The World Bank raised on Thursday its forecast for China’s economic growth in 2024 and 2025, but warned that subdued household and business confidence, along with headwinds in the property sector, would keep weighing it down next year, CNBC reported. The world’s second-biggest economy has struggled this year, mainly due to a property crisis and tepid domestic demand. An expected hike in U.S. tariffs on its goods when U.S. President-elect Donald Trump takes office in January may also hit growth.
China will ramp up fiscal support for consumption next year by raising pensions and medical insurance subsidies for residents as well as expanding consumer goods trade-ins, its finance ministry said on Tuesday, Reuters reported. The country will boost the basic pension for retirees and for urban and rural residents and raise financial subsidy standards for urban and rural residents' medical insurance to help "vigorously" boost consumption, the ministry said after concluding a two-day national fiscal work conference.
Chinese authorities have agreed to issue 3 trillion yuan ($411 billion) worth of special treasury bonds next year, two sources said, which would be the highest on record, as Beijing ramps up fiscal stimulus to revive a faltering economy, Reuters reported. The plan for 2025 sovereign debt issuance would be a sharp increase from this year's 1 trillion yuan and comes as Beijing moves to soften the blow from an expected increase in U.S. tariffs on Chinese imports when Donald Trump takes office in January.