
China’s economy showed signs of a rapid rebound in January as factory and services activity bounced back to expansion. Meanwhile the People’s Bank of China announced it would extend three lending tools to support green development and other areas. More Chinese were travelling again during the Spring Festival holiday as China lifted Covid control measures.
The International Monetary Fund raised its global economic outlook for 2023 on China’s reopening and falling inflation. Consumer spending in the US dropped for the second straight month in December, data from the Commerce Department showed. The US has reportedly secured a deal with the Netherlands and Japan to restrict export of equipment for chip manufacturing to China.
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Lin Jianhai, the vice president of International Finance Forum ( IFF) and former secretary of the International Monetary Fund, said China’s growth potential remains strong and the country’s policies could boost near-term growth despite multiple headwinds during interviews with Chinese state media CGTN and China Daily.
China’s economy will pick up from the second quarter onwards as Covid waves subside, said Lin.
To Lin, restoring the confidence of firms and households, including policy supports for the property sector and the private sector, is crucial.
Lin thinks pro-growth reforms, such as a further opening-up of domestic markets and ensuring market neutrality between private sector firms and State-owned enterprises, will help shore up low productivity growth at a time of shrinking labor supply.
Lin said China will continue to strengthen opening-up policies.
"China has been a key beneficiary of and contributor to globalization in the past four decades, and it will likely play an increasingly important role going forward," he said.
China's factory, service activity bounces back in January

China’s factory and services activity bounced back in January, official data showed on Tuesday.
The official manufacturing purchasing managers’ index (PMI) rose to 50.1 from 47 in December, according to data from the National Bureau of Statistics. The 50-mark separates growth from contraction.
The non-manufacturing PMI, which measures business sentiment in construction and services sectors, rose to 54.4, up by 12.8 points from December.
China's Spring Festival domestic trips grow 23.1%

Trips within China during the Lunar New Year holiday grew 23.1% to 308 million trips from the same period last year, estimates from the Ministry of Culture and Tourism showed on Friday.
Tourism revenues within China reached 375.8 billion yuan, up 30% from the same holiday last year.
Sales revenue of China’s consumption-related sectors during the holiday rose 12.2% from the same holiday last year, Xinhua reported citing data from the State Taxation Administration.
China's Spring Festival box office revenue tops 6.7 bln yuan

China’s movie box office revenue reached 6.76 billion yuan during the Spring Festival holiday, up 11.9%, making it the second-highest gross figures for the holiday, data from China Film Administration showed on Saturday.
Some 129 million went to the cinema during the holiday, up 13.16% from the same holiday last year.
China's central bank to extend lending tools

The People’s Bank of China (PBOC) said on Sunday that it will extend three lending tools to increase support for green development, transport and logistics.
The central bank will extend a lending tool to support carbon emission reduction to the end of 2024 and roll over a relending tool for promoting the clean use of coal to the end of 2023.
The PBOC will also extend a relending tool for the transport and logistics sector till the end of June this year.
Some foreign financial institutions will be included in the carbon reduction lending tool.
The central bank said it will continue to increase support for inclusive finance, green development, scientific and technological innovation, infrastructure construction and other key areas, it said in a statement.
China's 2022 smartphone shipment falls to a decade low, research firm
China’s smartphone shipment fell 13.2% year-on-year in 2022 to 285.8 million smartphones, the lowest number in a decade, data from the research firm IDC showed on Sunday.
Smartphone sales fell 12.6% year-on-year in the last quarter of 2022.
China phone maker vivo was the best-selling brand last year, taking up 18.6% of the market while Honor had a market share of 18.1%. Apple and OPPO were the third best-selling phones in China last year.
Apple was the top selling brand in the last quarter of 2022, thanks to Singles’ Day shopping promotion and production recovery, the research firm said.
IMF lifts 2023 growth outlook on China reopening, falling prices

The International Monetary Fund raised its 2023 global growth outlook on falling inflation and the reopening of China.
The IMF said global growth is to fall from an estimated 3.4% in 2022 to 2.9% in 2023, then rise to 3.1% in 2024.
China’s economy will rebound to 5.2% in 2023 in its latest outlook while US growth will slow to 1.4% this year, according to the IMF’s latest update.
“Despite these headwinds, the outlook is less gloomy than in our October forecast, and could represent a turning point, with growth bottoming out and inflation declining,” wrote Pierre-Olivier Gourinchas, the IMF’s chief economist.
US December consumer spending falls 0.2%

US consumer spending dropped for the second straight month in December, data from the Commerce Department showed on Friday.
Consumer spending fell 0.2% in December, down from November’s fall of 0.1%.
The pace of personal income growth also slowed to 0.2% in December.
Meanwhile, personal consumption expenditures price index rose 0.1% last month. The price index increased 5% in the twelve months to December, the slowest in more than a year.
Global growth to slow to 1.9% in 2023, UN report
The world’s economy is to slow to 1.9% this year, said the UN in its latest World Economy Report.
Inflation and higher interest rates will weaken private consumption and investment this year, said Ingo Pitterle, Senior Economist at the UN Department of Economic and Social Affairs.
The world’s economic outlook will remain gloomy and uncertain with global growth forecast to moderately pick up to 2.7% in 2024, which will highly dependent on the pace and sequence of further monetary tightening and the consequences of the war in Ukraine and the possibility of further supply chain disruptions.
Developed economies is expected to grow 0.4% while developing economies will grow 3.9% according the UN estimates.
The report calls for governments to avoid fiscal austerity and reallocation and reprioritisation in public spending policy.
US, Japan, Netherlands reach deal on China chip export limit, Bloomberg
The Biden administration has secured a deal with the Netherlands and Japan to restrict exports of some of the world’s most advanced equipment for manufacturing semiconductors to China, Bloomberg reported on Friday.
The deal will extend some exports curbs the US adopted in October to Dutch company ASML, and Japanese companies - Nikon and Tokyo Electron.
ASML said on Saturday that progress has been made towards an agreement among several governments on new curbs on exports of chip-making equipment to China, Reuters reported.
Brazil and Argentina discuss common currency
Brazil and Argentina are in discussion to create a common South American currency in an effort to boost economic integration.
In a joint article by the countries’ presidents, they said they “decided to advance discussions on a common South American currency that can be used for both financial and commercial flows, reducing costs operations and our external vulnerability”, according to media reports.
South America’s two biggest economies would discuss the plan at a summit in Buenos Aires, the Financial Times reported.
