China’s factory output rose 7% in January-February from the same period last year, data from the National Bureau of Statistics showed on Monday. Retail sales grew 5.5% in the first two months of the year compared to the same period last year. Meanwhile fixed-asset investment rose 4.2% in January and February compared to the same period last year. China’s central bank kept the one-year loan prime rate at 3.45%, unchanged from the previous fixing, while the five-year LPR remained unchanged at 3.95%.
Japan’s central bank raised interest rates for the first time since 2007 on Tuesday, ending the world’s last negative rates. The European Union agree to open membership talks with Bosnia and Herzegovina on Thursday. The Swiss National Bank cut its main interest rate by 0.25% to 1.5%. And Canada’s consumer prices edged down to 2.8% year on year in February, down from 2.9% in January, official data showed on Tuesday.
IFF hosts China's economic prospects webinar
Structural reforms including reform of China’s house registration (hukou) system, tax code and strengthening of China’s social safety net are key to China’s long term growth, said top China economists at the International Finance Forum (IFF) China’s growth prospects webinar.
During the online meeting, three top China economists including International Monetary Fund’s (IMF) Senior Representative in China Steven Alan Barnett, Wang Tao, USB Investment Bank’s Managing Director, Chief China Economist and Head of Asia Economic Research and Hang Seng Bank China’s Chief Economist Wang Dan presented the major takeaways of the National People’s Congress and the the CPPCC National Committee (the two sessions), analyzed China’s near- and long-term growth prospects, gave their insights in China’s foreign direct investment and trade, and provided policy suggestions for growth in the short and long run.
The three agreed that biggest headwind faced by China’s economy is still the downward pressure in the property market.
The downward pressure of the property market and its negative impact on the economy is very acute, said Wang Tao of UBS. She thinks stabalising the property market could boost consumer confidence and release the extra savings of the households, which in turn would drive economic growth.
Wang Tao noted that Premier Li Qiang’s work report tried to balance the short term growth with structural reform, which means the government is looking beyond short term policies and cycles.
China’s industrial output rises 7% in Jan-Feb
China’s factory output rose 7% in January-February from the same period last year, data from the National Bureau of Statistics showed on Monday.
Industrial output rose 0.2% in the first two months from December. In February, industrial output edged up 0.56% from that in January.
Hong Kong holds rates steady
The Hong Kong Monetary Authority held its base rates steady on Thursday following the Federal Reserve’s decision.
The HKMA left rates unchanged at 5.75% on Thursday, which came after the Fed held interest rates unchanged.
The Hong Kong dollar is pegged to the greenback and the city’s monetary policy moves in line with that of the US.
China’s retail sales grow 5.5% in Jan-Feb
China’s retail sales grew 5.5% in the first two months of the year compared to the same period last year.
Retail sales in urban areas rose 5.5% in January-February while those in rural areas grew 5.8%.
Online retail sales jumped 15.3% year on year, with online retail sales of physical goods expanding 14.4% and accounting for 22.4% of the total retail sales of consumer goods.
China's fixed-asset investment expands 4.2% in Jan-Feb
China's fixed-asset investment rose 4.2% in January and February compared to the same period last year, data from the National Bureau of Statistics showed.
The rise was 1.2 percentage points higher than the full year growth rate in 2023.
Investment in manufacturing grew 9.4% year on year while that in infrastructure construction rose 6.3%.
investment in technological upgrades in manufacturing rose 15.1% year on year. Investment in solar power and wind power rose 46.4% and 17.7% in the first two months, respectively.
China’s property investment falls 9% in Jan-Feb
Property investment in China fell 9% year on year in the first two months of 2024, down from a 24% fall in December, data from the National Bureau of Statistics (NBS) showed.
Property sales by floor areas dropped 20.5% in January-February from a year earlier, slower than a 23% fall in December.
Sales of newly built property fell 29.3% year on year.
Liu Aihua, a spokesperson for the NBS said the country’s property market was in the process of adjustment and transformation.
China's fiscal revenue falls 2.3% in Jan-Feb
China’s fiscal revenue fell 2.3% in January and February from the same period last year, official data showed on Thursday.
Deputy Finance Minister Liao Min attributed the fiscal revenue decline to a higher comparative basis from the same period of last year and the country's tax and fee reduction incentives to support businesses.
Fiscal revenue by the central government was 2.07 trillion yuan while that of the local governments was 2.39 trillion yuan.
Tax revenue fell 4% in the first two months of the year to 3.78 trillion yuan.
China has room for RRR cuts, central bank
China still has ample monetary policy space and options and room for further reserve requirement ratio (RRR) cuts, said Xuan Changneng, deputy head of the People’s Bank of China.
Speaking at a press conference, Xuan said the central bank will work to ensure the liquidity at a reasonable and ample levels.
He said the central bank will push for a steady decline in enterprises’ financing costs and residents’ loan costs.
Japan raises interest rates for first time in 17 years
Japan’s central bank raised interest rates for the first time since 2007 on Tuesday, ending the world’s last negative rates.
The Bank of Japan raised its short-term interest rates to around 0% to 0.1% from -0.1%, according to its statement at the end of its two-day March policy meeting.
The BOJ also announced the abolition of its radical yield curve control policy for 10-year Japanese government bonds.
EU agrees to open membership talks with Bosnia and Herzegovina
The European Union agree to open membership talks with Bosnia and Herzegovina on Thursday.
The EU said the talks were conditional on more reforms in the Balkan nation.
"The European Council has just decided to open accession negotiations with Bosnia and Herzegovina," Charles Michel, president of the European Council, posted on social media X, formerly known as Twitter.
Swiss central bank cuts rates
The Swiss National Bank cut its main interest rate by 0.25% to 1.5% on Thursday.
The central bank also cut its interest rate on sight deposits to 1.5%.
The move came after Swiss inflation fell to 1.2% in February and inflation has been within the SNB’s target of 0-2% for ninth month.
Canada’s inflation slows to 2.8% in February
Canada’s consumer prices edged down to 2.8% year on year in February, down from 2.9% in January, official data showed on Tuesday.
Gasoline prices rose 0.8%, reversing a 4% decline in January.
The consumer prices index rose 0.3% in February on a monthly basis, up from 0% in January.
Food prices rose 2.4% year on year, down from January’s rise of 3.4%.
