Two sets of numbers landed in Beijing this summer, and they described what looked like two different countries.

The first came from the customs administration. Chinese exports grew 25% in August in US dollar terms, quickening from 23.9% in July. The monthly trade surplus reached USD 119.09 billion.

Over the first eight months of the year the surplus totalled USD 805.51 billion, which puts the annual figure on course to pass USD 1 trillion for a second consecutive year. No country has ever run a goods surplus on that scale.

The second came from the statistics bureau. Retail sales in July grew 0.6% from a year earlier, down from 1% in June and well short of forecasts.

Fixed asset investment fell 6.7% in the first seven months, the steepest decline since April 2020. Property development investment dropped 19.2%. Urban unemployment ticked up to 5.2%.

This is the dichotomy that now defines the world’s second largest economy. Chinese factories have rarely been more competitive abroad. Chinese households have rarely been more reluctant to spend at home.

With second quarter growth cooling to 4.3%, against an official target range of 4.5% to 5%, Beijing is leaning harder on foreign buyers than at any point in the past decade.

Why the export side is roaring
The export boom is not simply a matter of cheap goods. It is being pulled by the global build-out of artificial intelligence infrastructure, which has lifted both prices and volumes for the high-tech goods China has spent a decade learning to make.

In the first eight months of 2026 the value of high-tech exports rose 42.9%. Semiconductor export values more than doubled, although volumes grew only 4.1%, a gap that shows how much of the gain is price rather than quantity.

Vehicle exports rose by more than half in both value and volume. Electric vehicles, solar cells and lithium-ion batteries did much of the rest of the work.

There is a second, less flattering driver. Weak demand at home means Chinese manufacturers have spare capacity and thin margins, so they sell abroad at prices few rivals can match.

Industries that depend on the domestic market have been fighting brutal price wars, a phenomenon Chinese officials call involution. Deflation at home has become a competitive weapon overseas.

Imports, meanwhile, are flattered by the same AI cycle. August imports rose 28.2% but still missed forecasts, and once semiconductors and petrochemicals are stripped out, the underlying picture is much softer.

Why the home side is stuck
The core problem is household balance sheets. Property once accounted for something close to a third of Chinese growth and holds the bulk of family savings.

New home prices fell 3.4% year on year in July and second-hand prices fell 5.4%, extending an erosion of wealth that is now in its fifth year.

Families who feel poorer save more and spend less, which is exactly what the data show. Chinese households save roughly 30% of income, against about 10% in most developed economies.

Three other forces compound it. Employment insecurity is the first. Youth unemployment has hovered above 16% for much of the year, and the sectors that once absorbed graduates, construction and property services chief among them, are shrinking.

Thin social protection is the second. Healthcare, pensions and eldercare still leave households carrying risk that the state absorbs elsewhere, so precautionary saving stays high.

Fading policy support is the third. The consumer goods trade-in subsidies that propped up appliance and car sales in 2024 and 2025 have run their course, and the base effects are now working against the figures.

Local government finances sit underneath all three. Land sales to developers once funded a large share of municipal spending, and that revenue has collapsed with the property market.

Cash-strapped local authorities are slower to pay contractors, slower to hire and slower to spend, which drains demand from thousands of small cities at once.

Chinese analysts flagged exactly this in July, noting that a pullback in broad fiscal spending and tighter local government rules pushed almost every domestic indicator in the same direction in the same month.

The one genuine bright spot is services. Travel, leisure and transport spending has held up better than goods, and there are signs of a gradual shift in how Chinese households allocate what they do spend.

Officials expect per capita services spending to move towards half of total household consumption over the next five years. It is a real change, but it is starting from a low base and it is not yet large enough to offset a shrinking appetite for cars, appliances and homes.

Prices tell the story. Consumer inflation was 0.5% in July, and core inflation, once gold and trade-in effects are removed, was about 0.8%.

Producer prices fell 0.7% on the month. Firms facing falling prices cut wages and delay investment, which weakens demand further.

That loop is the reason economists describe the slowdown as structural rather than cyclical.

What Xi’s government is doing
Beijing is not ignoring the problem, and its response has broadened considerably in 2026.

The most significant move is institutional. In July the State Council approved the 15th Five-Year Plan for Expanding Consumption, the first time expanding consumption has been given a dedicated national plan of its own.

It targets total retail sales of around 60trn yuan by 2030 and, more importantly, sets out to raise the household consumption rate rather than simply the volume of sales.

Services take priority, with elderly care, childcare, culture, tourism, health, sport and education singled out.

The plan also promises to relax market access in services and revise the rules on paid annual leave, a quiet acknowledgement that people cannot spend on leisure they never get.

The fiscal arm is doing the near-term lifting. The finance ministry says 12.4 trillion yuan has been allocated to education, social security, healthcare and housing, and that childcare subsidies reached more than 25 million infants and toddlers and their families in 2026.

Three new measures took effect on August 1, extending consumption loan interest subsidies to working capital loans and credit card instalments and raising the number of participating lenders from roughly 100 to about 400.

On the investment side, Beijing has deployed an 800 billion yuan new-type policy finance tool, paired for the first time with a central government interest subsidy of 1.5 percentage points for up to two years on eligible loans to smaller private firms.

A 500 billion yuan private investment guarantee programme is being rolled out over two years.

Monetary policy remains what the central bank calls appropriately loose. The People’s Bank of China cut rates on structural tools in January and has signalled room for further reserve requirement and rate reductions, while pledging to keep the yuan broadly stable.

Running alongside all of this is the anti-involution campaign, an effort to curb wasteful capacity, local government subsidy races and destructive price wars. If it works, it should stop deflation feeding on itself.

Why the gap is not closing
The obvious criticism is one Chinese economists make themselves. Most of the money still flows to supply rather than demand. Policy finance tools, guarantees and industrial upgrading strengthen the export side of the ledger that is already strong, while direct transfers to households remain modest and highly targeted.

There is also a timing trap. Strong exports reduce the urgency to fix the weaker half of the economy. Growth targets can be met on the back of foreign orders, which allows the harder decisions on property, land finance and the social safety net to slip.

Scale is the third issue. The consumption plan is a five-year document, and its most powerful levers, pension top-ups, hukou reform and a broader safety net, are the slowest and most expensive to pull.

Childcare payments and loan interest subsidies help at the margin, but they do not change the calculation of a family that has watched the value of its flat fall for four years running.

That is a risky bet, because the export boom is politically fragile.

A surplus heading past USD 1 trillion a year invites tariffs, quotas and anti-dumping cases across Europe, Asia and Latin America, not only the United States.

Washington and Beijing have been exploring reciprocal tariff reductions on about USD 30 billion of goods each ahead of a summit this month, but the wider pressure to rebalance trade is not going away.

For the rest of 2026, the indicator to watch is not the export headline. It is retail sales, core inflation and whether the new consumption plan converts into cash in household hands rather than credit lines for firms.

Until Chinese families feel secure enough to stop saving, the country will keep exporting the demand it cannot generate at home, and the world will keep pushing back.

The post China’s two-speed economy, record exports and a consumer who will not spend appeared first on International Finance.

As per the Chinese customs data, exports from the Asian giant surged 25% year-on-year in August in US dollar terms, matching forecasts and accelerating from the 23.9% growth seen in July.

However, the Xi Jinping administration still needs to address the dichotomy between resilient exports and weak domestic activity, as policymakers struggle to revive consumption and investment as they pursue a 4.5%-5% GDP growth target for 2026.

Imports, on the other hand, jumped 28.2%, compared with a 27.5% year-on-year increase in July and a forecast of a 30% rise.

In the first eight months of 2026, exports of high-tech products have gone up 42.9% in US dollar value terms. Semiconductor export ⁠values more than doubled even as volumes edged up just 4.1%, while car exports rose more than 50% in both value and volume.

As per Zhaopeng Xing, ANZ’s senior China strategist, strong demand for AI products as well as electric vehicles, solar cells, and lithium-ion batteries has offset the impact from weather events. Companies, however, are rushing to send goods to the United States due to tariff uncertainties from the Donald Trump administration.

Despite the sluggish domestic demand, China’s push to dominate key technologies has driven investor appetite for tech stocks, while surging AI-related demand has lifted a new generation of manufacturers.

Chipmaker CXMT has emerged as the biggest success story, with the business swinging to a first-half profit in its maiden earnings report since listing, as soaring semiconductor prices and strong demand for AI-driven computing lifted sales.

However, industries in the non-tech sectors have been grappling with producer price inflation and soft demand. While exports have emerged as the favorite option for Beijing to offset industrial overcapacity, both the United States and the European Union (EU) are now asking the Jinping administration to lower its trade surpluses.

China’s trade surplus rose to USD 119.09 billion in August, from July’s tally of USD 112.5 billion. The surplus in the first eight ‌months of this year has reached USD 805.51 ⁠billion, putting the annual number on track to top USD 1 trillion for the second year.

Trade surplus with the United States rose to USD 29.18 billion from USD 28 billion in July, with China’s exports to the world’s largest economy jumping 34.4% year-on-year, outstripping the 17.8% growth in imports.

The post Tech boom props up China’s export fortunes amid weak domestic demand appeared first on International Finance.

Retail sales rose just 0.6% year on year in July, slowing from 1% in June and missing the 1.5% increase that economists had expected.

The post Weak consumer demand, slumping investment drag on China’s economic growth appeared first on International Finance.

While better-than-expected exports, along with the Xi Jinping administration’s domestic fuel-pricing controls, ‌helped Beijing weather the energy shock, higher input costs threaten to squeeze already weak factory margins, apart from further dampening consumer spending if the Middle East conflict drags on.

As per the data from the National Bureau of Statistics (NBS), factory output grew 4.1% from a year earlier (slowest growth since July 2023), compared with a 5.7% rise in March.

“The strong performance of the exporters helped to mitigate the weaknesses in domestic demand, but not enough to fully offset it,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, while interacting with Reuters.

Exports gathered pace in April as factories raced to meet a wave of orders from AI-related industries, while other buyers sought to stockpile components amid fears of the Iran war potentially pushing global input costs even higher.

Zhang didn’t expect ⁠the Xi Jinping administration to change its policy stance on just one month of weak data, stating that Beijing would likely reassess its policy stance in July when the Q2 GDP data comes out.

“Retail sales, a gauge of consumption, rose just 0.2% in April, cooling sharply from 1.7% in March and sliding to their weakest gain since December 2022. The figures were also well below forecasts centred on a 2% increase. The fragility of household consumption was underscored in April domestic car sales, which dropped 21.6% in April from a year earlier for their seventh straight month of decline, even as automakers ramped up efforts to expand in overseas markets to offset weakness at home,” reuters reported further.

“Retail sales growth in the first four months of 2026 points to still-weak household demand, with consumers concentrating spending on selective discretionary and upgrade categories rather than broad-based consumption,” said Yuhan Zhang, principal economist at the Conference Board’s China Center.

Zhang further added that the split highlights a two-speed recovery: steady spending on small lifestyle and tech upgrades, but weak appetite for big-ticket, credit-driven purchases tied to housing and income.

While the jobless rate reportedly nudged down to 5.2% in April from 5.4% in March, fixed-asset investment (FAI) contracted 1.6% in the first four months of 2026, compared with a 1.7% rise in the January-March period and a ‌1.6% expansion ⁠forecast. Domestic crude steel output also echoed the weak investment data, falling 2.8% from a year earlier.

“We believe weaker credit demand and heavy rainfall in southern China may have contributed to the April FAI decline compared with the first quarter,” said Lisheng Wang, economist at Goldman Sachs in a note, while cautioning that the occasional NBS “statistical correction” of previously reported data may have amplified the volatility.

As the Iran war and the stalemate at the Strait of Hormuz continued to disrupt the global supply chains, the Chinese leadership have already pledged to strengthen the country’s energy security, accelerate technological self-sufficiency and seek greater control of supply chains, while dealing with external shocks.

The world’s second-largest economy expanded 5.0% in the first three months of 2026, just touching the Beijing’s full-year target range of 4.5% to 5.0%. However, as per analysts, the recovery is running on uneven ground, with industrial output continuing to outstrip domestic demand.

“While a protracted downturn in the property market remains a drag on growth, the Middle East conflict has exposed the economy to external risks at a time of fragile consumption at home. China’s property investment contraction widened in April year-on-year, ⁠but new home prices fell at their slowest monthly pace in a year, offering some signs of stabilisation as local governments deploy measures to boost sales and shore up sentiment,” Reuters noted.

Also Read:

The post China witnesses growth loss due to Iran war disruptions appeared first on International Finance.

Speaking at a press conference on the second day of his visit to the Chinese capital, Chalmers stated that Australia’s relationship with its biggest trading partner had “a lot at stake.”

He said, “We are very pleased to see these additional steps being signalled by the Chinese government in order to boost economic activity and boost growth here in China.”

“What happens here and what is decided here has big consequences for our own economy, our own workers and businesses and investors, and for our country more broadly,” he explained.

Beijing revealed several initiatives meant to put the second-biggest economy in the world back on track while also acknowledging “problems” with it.

Chalmers made his first trip to Beijing as Australia’s treasurer in seven years.

Under the leadership of a new Canberra government, trade relations between the two nations have steadily improved.

As they recovered from a savage economic spat in which Beijing imposed trade barriers worth billions of dollars on Australian coal, timber, barley, beef, and rock lobster, Chinese Premier Li Qiang declared in June that relations were “on the right track.”

Now, the majority of these have been disassembled. However, lingering disagreements continue, ranging from the Pacific’s diplomatic squabbles to China’s continued detention of a writer critical of the government.

Meanwhile, the Australian economy experienced a strong recovery following the COVID-19 pandemic. But as the population ages and the environment changes, inflation has increased and fiscal pressures are approaching.

Rebuilding fiscal buffers through tax exemption reductions and increased public spending efficiency in areas like health is necessary, while monetary policy should stay tight until underlying inflation is manifestly on course to reach the central bank target.

The post Australia’s treasurer says China stimulus could boost growth down under appeared first on International Finance.

Even though paying less for gas may be beneficial, the market impact goes beyond just decreased consumer pricing. The global economy is affected in a rippling manner by changes in oil prices. One of the biggest casualties is the oil industry itself. The stakeholders’ profit margins go down significantly as they sell their products for less money, resulting in job losses, output decrease or possibly bankruptcy. It encompasses both the oil companies and the countries whose economies heavily rely on oil exports.

In response to the failure of two prestigious American banks, Silicon Valley Bank and Signature Bank, oil prices fell in the first quarter of 2023. Investors are in a difficult position too. The fear about the impact of this banking sector crisis spreading to the wider financial sector caused hefty projections for oil demand to be quashed. Analysts are now cautioning that the oil market will be “locked in a surplus for most of the first half of the year” because of persistent “contagion” risks brought on by the turmoil in the banking sector.

The US inflation rate, since 2022, reached its highest level in 40 years as a result of the sanctions placed on Moscow amid the Ukraine war. To combat this, the Federal Reserve increased interest rates to their highest level since 2007. Although the inflation has come down below 4%, there are talks around further rate increases, even though some have projected that the banking crisis would likely end shortly and that the oil price would rebound too. The impact of the interest rate rises is also difficult to forecast and may continue to draw attention to specific financial market segments as well as vulnerabilities brought on by excessive debt and stretched asset valuations.

Low oil prices may be tough for nations that export it, but the phenomenon will be manageable, according to a WEF analysis, because “with price changes, there is a shift in profiting between oil-producing and oil-consuming countries.”

To mitigate the effects on their economies, oil exporting nations will go for options like reducing government spending, boosting taxes, ending subsidies, and implementing measures to tighten the financial system like hiking interest rates.

In addition, the US CPI has significantly grown, placing stress on the economy at a time when the Federal Reserve is already grappling with inflation among banking issues. If the Federal Reserve lowers interest and inflation rates, the oil market may recover. However, it appears that the market is currently either bracing for a future recession or that one or more funds are being forced to raise cash and reduce risk on their books as a result of worries about liquidity in the wake of bank collapses.

Tracing the ‘hope’

Large investors like Warren Buffet, who boosted his investment in the oil business Occidental Petroleum. are drawn to lower oil prices. Buffett’s company Berkshire Hathaway now owns a 22.2% stake in the corporation as a result of the most recent acquisitions. It has purchased more than 200 million shares worth $12.2 billion. The Chinese market will likely be the source of demand in 2023.

China is the world’s largest consumer of oil, therefore an increase in Chinese demand might help oil prices. The International Energy Agency (IEA) predicted a two million barrel daily rise in oil demand by 2023. The IEA Executive Director asserted that “With the Chinese economy now recovering, it will have major implications for oil and gas market balances.” The OECD has also increased its projection for world economic growth by 0.2% points, from 2.2% in November to 2.6% this year and 2.9% in 2024.

China’s recovery

Despite the upward revision of growth projections, the OECD issued a warning that the recovery is still fragile and that the risks are still disproportionately to the downside. According to customs statistics, China’s crude oil imports dropped 18.8% to the lowest daily rate since January in July 2023 as major exporters reduced their international exports and domestic reserves kept growing.

The largest oil importer in the world imported 10.29 million barrels per day (bpd) of crude in July, according to figures from the General Administration of Customs.

The second-highest import volume on record was reached in June at 12.67 million bpd.

However, despite China’s economy being severely impacted by widespread COVID outbreaks and massive lockdowns a year earlier, oil imports were 17% greater than the 8.79 million bpd brought in at that time.

Some 325.8 million metric tons of crude were imported during the first seven months of the year, an increase of 12.4% from the same time in 2022.

“The (month-on-month) decline was led by lower imports from the big-3 crude exporters, namely the U.S., Saudi Arabia, and Russia, which have cut exports amid reduced production targets and/or higher domestic demand,” said Emma Li, a China crude oil analyst at Vortexa in Singapore.

Li pointed out that at the end of July, China’s onshore crude oil inventories were over 1.02 billion barrels, and that the steady increase in those stockpiles would enable Chinese refiners to reduce their imports in the months to come.

Despite the overall decrease in imports, data from consultancy Zhuochuang showed that state-owned refineries increased their processing rates in July to an average of 78%–82%, up 2-3% points from June.

The need for summer travel had been predicted to increase gasoline usage.

According to data from the Longzhong consultancy, domestic diesel inventories increased by around 2% while domestic gasoline inventories decreased by about 3% between mid-June and mid-July as sluggish export volumes and a downturn in the real estate industry continued to dampen demand.

Chinese oil product exports increased in July as a result of better fuel profit margins in Asia, which also supported higher processing rates.

Exports of refined petroleum increased in July 2023 from 4.51 million metric tons the month before by 55.8% to 5.31 million metric tons.

Some 10.31 million metric tons of natural gas were imported into China in July, an increase of 18.5% from 8.7 million a year earlier when importers reduced spot purchases due to high liquefied natural gas prices around the world.

In conclusion, the oil market is currently facing a complex web of factors that are influencing its dynamics.

The impact of the price fluctuations extends beyond the pump. Many oil businesses, especially those heavily reliant on higher oil prices, are grappling with reduced profits, potential job losses, decreased output, and even the threat of bankruptcy. The banking crisis and uncertainty in the financial sector have further exacerbated the situation, leading to cautious projections for oil demand and market surplus.

The broader economy is also feeling the effects, with the US Federal Reserve raising interest rates to counterbalance inflation. This move, however, brings its own set of uncertainties and potential repercussions, including impacts on specific financial segments and vulnerabilities arising from debt and asset valuations.

Amid the challenges, there are glimmers of hope. Key investors like Warren Buffet see opportunity in lower oil prices, and the recovery of the Chinese economy, as the world’s largest oil consumer, holds promise for increased oil demand. The International Energy Agency’s projection of a rise in oil demand by 2023, driven by China’s recovery, suggests a potential positive shift in the market.

However, caution remains. The recovery is still fragile, as evidenced by China’s cautious oil import trends and the ongoing risks associated with the pandemic. The world economy’s growth projections have been revised upwards, yet the OECD emphasises that the downside risks remain significant.

In this intricate landscape, the oil market’s future trajectory remains uncertain. It will likely depend on a delicate balance between geopolitical events, economic recovery, investor sentiment, and government policies. While challenges persist, the interplay of various factors also presents opportunities for adaptation, innovation, and growth across industries and economies.

Despite all the encouraging indicators, there is still a lot of uncertainty over the future of the oil industry, the recovery of China, the implications of the ongoing Ukraine conflict, and the geopolitical environment as a whole. It’s a waiting game, at least for the moment.

The post Navigating the ‘oil’ uncertainty appeared first on International Finance.

Loo, while looking at the pan-China data, be it the official estimates of unsold property inventory or the construction-to-sales ratio, found that it would take at least four to six years for the real estate developers in the world’s second-largest economy to complete unfinished residential projects.

“That means efforts to boost funding to developers and other efforts to resolve China’s property market problems don’t directly address the bigger issue of uncompleted homes,” Loo’s research stated, as reported by CNBC.

“However, as one slices the data, the existing excess supply in the market is likely to take at least another four years to unwind, absent a meaningful pickup in demand,” Loo commented further in her study.

“Increasing supply coming from secondary market transactions – as households, worried about depleting profits from price declines, sell their second or third homes – is an additional drag to this process,” she said further, while noting that “developers’ inventory is far too large for households to absorb quickly.”

What does the study suggest?

Loo’s study noted that apartment homes in China were typically sold ahead of project completion, thereby putting pressure upon the real estate developers to finish their construction activities on time.

“However, financing struggles and other issues have meant developers have had to delay home delivery times — discouraging future home sales. On the extreme end, residential construction in the relatively poor province of Guizhou could take well over 20 years to complete,” Loo said further.

While China’s real estate and related sectors used to account for about a fifth to one-fourth of the country’s economy during the pre-COVID times, rating agency Moody’s now expects that figure to decline.

The firm also stated that the drop in land sales will result in the local governments facing financial strain.

“That means Beijing may need to step in, posing downside risks to China’s fiscal, economic and institutional strength,” Moody’s noted, while downgrading its outlook on Xi Jinping government’s credit ratings to negative from stable.

Moody’s also expects China’s GDP to slow to 4% growth in 2024 and 2025 and average 3.8% a year from 2026 to 2030. The firm, however, maintained an “A1” long-term rating on the country’s sovereign bonds.

No Spillover Risk

Loo does not see China’s property market troubles as having a significant spillover to the rest of the country’s economy.

“We think China’s housing downturn will tread a different path than that of the US, Spain, or Ireland 10-15 years ago, and is unlikely to trigger a broader financial crisis,” she remarked in her study.

While pointing out that falling house prices, mortgage failures and bank lending were interlinked, Loo said that in China, government policies, state-controlled banks and more stringent mortgage terms would ensure that the property crisis doesn’t become a drag for the overall economy.

Agreeing with Loo, S&P Global Ratings said, “We do see some similarities between China’s situation and the economic stagnation in Japan after the latter’s property bubble burst in 1991. However, China can avert this outcome, helped by regulatory action and the strength of its banking and corporate sectors.”

The post Will China’s real estate sector return to growth path? Oxford economist answers appeared first on International Finance.

Yu’s predicament demonstrates the challenge Beijing confronts in reviving sluggish consumer spending. While reducing interest rates lessens household financial pressures, researchers claim that consumers are unable to loosen their purse strings due to the bleak economic outlook and the absence of longer-term changes in sectors like pensions and healthcare.

About one of the government’s stated goals for those measures, Yu, an asset management firm, told Reuters, “The rate cuts have little impact on my spending power.”

China recently announced lowering interest rates on current mortgages and relaxing regulations for first-time homebuyers in major cities, actions that the central bank and financial regulators described as “conducive to expanding consumption.”

The country’s property market has been rocked by faltering consumers as property giants Evergrande and Country Garden face debt woes. Country Garden just narrowly avoided default while Evergrande has filed for bankruptcy protection.

China’s house prices slipped in July 2023, falling 0.1% year-on-year after a brief recovery in May and remaining flat in June.

However, in a coordinated action, state-owned banks also reduced deposit rates by 10 to 25 basis points to stop profit margins from further contracting. According to Nomura analysts, borrowers might save 200–300 billion yuan (USD 27–41 billion) annually as a result of the mortgage rate reductions.

However, they also note that a 15 basis point reduction in interest rates on the 131.4 trillion yuan in deposits held by Chinese families will result in a 197 billion per year reduction in interest income.

First-time homebuyer mortgage rates hover around 4%, while rates on one-year fixed deposits are approximately 1.5%. Ting Lu, chief China economist at Nomura, described it as “more of a redistribution of income” and claimed it had “limited” effects on spending.

In an economy where real estate accounts for 70% of household wealth, researchers think there is some justification for trying to stabilize the housing market. However, eventually, rather than using household savings, transferring resources from other parts of the economy to consumers would be the most effective approach to encourage Chinese people to spend.

Zhaopeng Xing, senior China analyst at ANZ, stated that “the main constraint is people’s income,” adding that the recent measures’ “mild” boost to consumer confidence will only be temporary. Yu projects a 1,000 yuan reduction in his monthly mortgage payments, which would be somewhat offset by a decrease in interest income from his accounts. He might invest a portion of his funds in stocks and bonds in the hopes of safeguarding his future gains. However, some people are risk-averse, particularly in light of the rising employment insecurity.

Despite being dissatisfied with the decreased rates, Li Xiao, a data analyst in Shanghai, said that he would retain the money in the bank. The depositors eventually suffer the costs, Li claimed, despite the government’s desire to increase consumption. Because people don’t spend because they have no money, decreasing deposit rates won’t be very effective.

Under the condition of some anonymity, Guo, a state-employed employee in the southern province of Guangdong, said he would continue to save “even if deposit rates drop to zero.”

“The economy is bad, and people don’t have enough confidence,” he declared.

“Keeping the principal with you is already a win,” Nancy Yang, who works for an auto parts supplier in Wuhan, in central China, claims that the lack of end-of-year incentives from her workplace for 2022 is the main reason she isn’t spending her money.

“I’m not saving because of the meagre interest rate, Yang remarked, but rather because there are too many unknowns, including unreliable enterprises, stagnant income, house payments, and raising children,” she added further.

Experts Not Impressed

China’s real estate sector is going in “two directions,” and even though further stimulus was expected, a recovery won’t happen anytime soon, according to a former advisor to the People’s Bank of China.

“The property market right now in China is actually two-fold. It’s actually going in two directions,” Li Daokui, now a professor of economics at Tsinghua University, told CNBC.

Asked if Beijing’s policy response should be “bolder,” Li said there are “many meetings, discussions, deliberations which are [unseen] below the water.”

The post China’s real estate stimulus faces consumer confidence test appeared first on International Finance.

According to a government spokeswoman Fu Linghui, the choice was made as a result of changes in the world’s second-largest economy and its society.

China’s urban 16 to 24-year-old unemployment rate reached a record high of more than 20% in June.

Recently, the nation’s central bank reduced borrowing costs in an effort to support growth.

According to official data released, China’s overall unemployment rate increased to 5.3% in July.

At the same time, the government announced a temporary suspension of data on youth unemployment but did not specify a time frame for the suspension, according to the BBC.

The method of calculating unemployment among young people needed to be reconsidered, a spokesman for the National Bureau of Statistics said.

“The economy and society are constantly developing and changing. Statistical work needs continuous improvement,” Fu Linghui told a news conference in Beijing.

Fu suggested that the increase in students between the ages of 16 and 24 had an impact on the unemployment rate, although China has never included individuals who are in the education sector as unemployed.

In 2018, China began releasing statistics on youth unemployment. However, it does not currently release information on young people’s work status in rural areas.

According to the BBC, the revelation came as the nation’s post-pandemic economic recovery was sluggish.

Meanwhile, households across China have been thrown into panic over the past week as ‘Country Garden,’ a company renowned for building huge projects in China’s second and third-tier cities, missed USD 22.5 million in coupon payments on August 6, 2023.

The firm, one of the world’s largest homebuilders, has until early September to make the payments or has to follow hundreds of other developers who are in the default and restructuring category.

The post China stops showing youth unemployment data appeared first on International Finance.

The US West Texas Intermediate (WTI) crude futures were down 14 cents, or 0.2%, at USD 71.06, while Brent futures were down 21 cents, or 0.3%, to USD 75.69 per barrel.

The dollar increased as statistics indicated that permits for new construction increased and US homebuilding jumped in May to the highest level in more than a year, suggesting that the housing industry may be recovering after being severely damaged by Federal Reserve rate hikes.

Oil demand is affected by a stronger dollar since it increases the cost of the commodity for customers using foreign currencies.

China, the top oil importer in the world, is experiencing a sputtering recovery, which continues to worry the market. With a smaller-than-expected 10-basis-point decrease in the five-year, China reduced its benchmark lending prime rates (LPR) for the first time in ten months in an effort to spur economic growth.

The rate cut came in response to recent economic data showing that China’s industrial and retail sectors were having trouble maintaining growth from earlier this year.

“Investors remained impatient with China’s efforts to boost economic growth. Beijing’s slow stimulus rollout is adding concerns about the weakening economy,” ANZ Research said in a client note.

The oil market was also cautious ahead of the US Federal Reserve Chair Jerome Powell’s speech, which is anticipated to shed light on potential rate changes in the largest economy in the world.

Recently, two Federal Reserve policymakers and an economist who joined the Fed’s Washington-based board stated that their top priority is to lower the country’s excessive inflation so that it may resume sustainable growth.

“We expect Fed Chair Powell to deliver a hawkish semi-annual testimony to Congress reflecting the FOMC’s median projection for higher interest rates in coming months and more resilient inflation in the near term,” ANZ Research said in the note.

The post Oil prices slide further amid concerns over China’s economic growth appeared first on International Finance.