China's Q4 GDP growth beats forecast after COVID-19 shock

BEIJING - China's economy grew at a faster-than-expected pace in the fourth quarter of last year, ending a rough coronavirus-stricken 2020 in remarkably good shape and remained solidly poised to expand further this year.

The gross domestic product (GDP) expanded 6.5 percent, data from the National Bureau of Statistics showed on Monday, faster than the 6.1 percent forecast by economists in a Reuters poll, and followed the 4.9 percent growth in the third quarter.

GDP grew 2.3 percent in 2020, the data showed, making China the only major economy in the world to avoid a contraction last year as many nations struggled to contain the COVID-19 pandemic.

Aided by strict virus containment measures and policy stimulus, the economy has recovered steadily from a steep 6.8 percent slump in the first three months of 2020, when an outbreak of COVID-19 in the central city of Wuhan turned into a full-blown epidemic.

The world's second-largest economy has been fuelled by a surprisingly resilient export sector, but consumption - a key driver of growth - has lagged expectations amid fears of a resurgence of COVID-19 cases.

Data on Thursday showed Chinese exports grew by more than expected in December, as coronavirus disruptions around the world fuelled demand for Chinese goods even as a stronger yuan made exports more expensive for overseas buyers.

Despite the steady recovery in quarterly growth, 2020 GDP growth was the weakest pace in more than four decades.

The slew of bright economic data has reduced the need for more monetary easing this year, leading the central bank to scale back some policy support, sources told Reuters, but there would be no abrupt shift in policy direction, according to top policymakers.

On a quarter-on-quarter basis, GDP rose 2.6 percent in October-December, the bureau said, compared with expectations for a 3.2 percent rise and a revised 3.0 gain in the previous quarter.

Analysts expect economic growth to rebound to 8.4 percent in 2021, before slowing to 5.5 percent in 2022.

While this year's predicted growth rate would be the strongest in a decade, led by a big jump in the first quarter, it is rendered less impressive coming off the low base set in pandemic-stricken 2020.

Some analysts also cautioned that a recent rebound in COVID-19 cases in China could impact activity and consumption in the run-up to next month's long Lunar New Year holidays.

China reported more than 100 new COVID-19 cases for the sixth consecutive day, with rising infections in the northeast fuelling concerns of another national wave ahead of a major holiday season.

(Reporting by Gabriel Crossley and Kevin Yao Editing by Shri Navaratnam)

-reuters-

China's super rich got $1.5 trillion richer during pandemic: report

BEIJING— China's super wealthy have earned a record $1.5 trillion in 2020, more than the past 5 years combined, as e-commerce and gaming boomed during pandemic lockdowns, an annual rich list said Tuesday.

An extra 257 people also joined the billionaires club in the world's number 2 economy by August, following 2 years of shrinking membership, according to the closely watched Hurun Report.

The country now has a total of 878 billionaires. The US had 626 people in the top bracket at the start of the year, according to Hurun in its February global list.

The report found that there were around 2,000 individuals with a net worth of more than 2 billion yuan ($300 million) in August, giving them a combined net worth of $4 trillion.

Jack Ma, founder of e-commerce titan Alibaba, once again topped the list after his wealth surged a whopping 45 percent to $58.8 billion as online shopping firms saw a surge in business owing to people being shut indoors for months during strict lockdowns to contain the virus.

He was followed by Pony Ma ($57.4 billion), boss of gaming giant and WeChat owner Tencent who made an extra 50 percent despite concerns about his firm's US outlook after it was threatened with bans there over national security fears.

First-time list member Zhong Shanshan, 66, best-known for his bottled water brand Nongfu, parachuted into third spot with $53.7 billion after a Hong Kong IPO in September, the report found.

'NEVER SEEN THIS MUCH WEALTH'

"The world has never seen this much wealth created in just one year," Hurun Report chief researcher Rupert Hoogewerf said in a statement.

This year's list shows China was "moving away from traditional sectors like manufacturing and real estate, towards the new economy," he added.

Wang Xing, founder of food delivery app Meituan, quadrupled his wealth and jumped 52 places to 13th in the list with $25 billion, while Richard Liu, founder of online shopping platform JD.com, doubled his money pile to $23.5 billion.

Health care entrepreneurs also moved up the list on the back of the pandemic, with Jiang Rensheng, founder of vaccine-maker Zhifei, tripling his value to $19.9 billion.

China shut down major cities around the country in late January and February to contain the virus that first emerged in Wuhan, causing an unprecedented economic contraction in the first quarter.

With infections appearing to be under control, the country is on track to become the only major economy to expand this year, according to the International Monetary Fund.

On Monday, data showed the economy expanded 4.9 percent in the third quarter but away from the glittering figures as many ordinary workers and fresh graduates are struggling to find jobs.

The urban jobless rate inched down to 5.4 percent in September, although analysts have warned of higher unemployment than officially reported this year.

Agence France-Presse

World Bank warns China growth could screech to a halt

WASHINGTON- The coronavirus pandemic's economic fallout could cause China's growth to come to a standstill while driving 11 million more people in East Asia into poverty, the World Bank warned Monday.

The pandemic is causing "an unprecedented global shock, which could bring growth to a halt and could increase poverty across the region," said Aaditya Mattoo, World Bank chief economist for East Asia and the Pacific.

Even in the best-case scenario, the region will see a sharp drop in growth, with China's expansion slowing to 2.3 percent from 6.1 percent in 2019, according to a report on the pandemic's impact on the region.

With two-fifths of the world's population under some form of lockdown that's caused the shuttering of businesses and a slowdown in transportation to try to contain the virus, the country where the outbreak originated may escape a recession but will nonetheless suffer a sharp slowdown.

Just 2 months ago, the World Bank's economists forecast China would grow by 5.9 percent this year, which would have been its worst performance since 1990.

Now the world's second-largest economy faces a more dire outlook, reflected in the record contraction in manufacturing activity in February and industrial production that fell for the first time in 30 years.

The East Asia and Pacific region, excluding China, could see growth slow to 1.3 percent in the baseline or contract 2.8 percent in the more pessimistic scenario as compared to 5.8 percent last year, the report said.

"The pandemic is profoundly affecting the region's economies, but the depth and duration of the shock are unusually uncertain," the report said, noting the region already was unsettled by trade conflict with the United States.

"Containment of the pandemic would allow recovery, but the risk of durable financial stress is high even beyond 2020," the World Bank warned. "Most vulnerable are countries that rely heavily on trade, tourism, and commodities; that are heavily indebted; and that rely on volatile financial flows."

WORSENING POVERTY 

Even in the best case, marked by a sharp slowdown followed by a strong recovery, 24 million fewer people in the region will escape poverty, the report said.

But an additional 11 million people could descend into poverty under the more negative outlook, where there is a severe economic contraction followed by a sluggish recovery.

Mattoo said the 17 countries in the region key to global value chains and accounting for 70 percent of world trade "have all been affected" and now have some of the world's highest numbers of COVID-19 cases.

"In this interdependent world where our economic destinies are intertwined, there's going to be mutual amplification, because the shock is simultaneously affecting all these important countries," he told reporters.

"That makes it particularly costly in economic terms."

The World Bank called for strong action, with the priority first on containment but also on measures to cushion the shock to households of lost wages. 

Mattoo said it is not too late to follow Korea's example to ramp up testing and containment so that economies can begin to return to normal more quickly.

"This is not rocket science. With help even poorer countries can do it."

Agence France-Presse 

'Pink yuan' economy grows to $500 billion as China warms up to LGBT+

KUALA LUMPUR -- The growing popularity of online gay-friendly adverts in China shows business is waking up to the 'pink yuan' and more liberal attitudes among young people but the government remains unmoved.

China's gay economy is worth $300 billion to $500 billion annually, reaching some 70 million people, according to Daxue Consulting, a market research firm - making it the biggest gay and transgender market in the world in terms of population.

"Young Chinese people do appear to be opening up and accepting LGBT+ culture," Allison Malmsten, China analyst at the Shanghai-based company, told the Thomson Reuters Foundation.

"The LGBT+ market in China has a lot of untapped potential."

Homosexuality has been legal in China since 1997 and the country's largest organization for psychiatrists stopped classifying it as a mental disorder in 2001.

But same-sex marriage is not recognized and most LGBT+ people fear coming out to their families because of stigma.

An online advert showing a man bringing his partner home to celebrate the Lunar New Year with his family went viral across China last month, sparking positive responses among the LGBT+ community for helping break taboos in the conservative country.

The video by China's Alibaba Group, which specializes in e-commerce sites, is part of a growing trend, largely led by technology firms targeting millennials aged 23 to 38 and gay and trans consumers, said industry and LGBT+ analysts.

"Many of these companies have young consumers and showing inclusivity simply makes an ad memorable," said Malmsten.

"Look at the buzz created from the Alibaba advert - netizens and media spreading the advertisement all over, and at no extra cost for the company."

Chinese internet search giant Baidu, e-commerce company Dangdang, and ride-hailing giant Didi Chuxing have also promoted LGBT+ friendly adverts in recent years.

BANNED

The government often censors news, television shows and films that touch on LGBT+ issues in the name of "family values" while media companies self-censor, gay rights activists say.

China scrubbed at least 10 scenes with gay references from 2018's Oscar-winning biopic "Bohemian Rhapsody" about British musician Freddie Mercury.

"If we want to achieve a friendly and inclusive social environment, we need much more LGBTQ images on TV and in newspapers for (help) changing the law and social norms," said Yang Yi of the China Rainbow Media Awards.

"LGBTQ+ issues are becoming more and more invisible," said Yi, whose organisation works to improve gay and trans coverage.

But companies looking to carve out a slice of the country's pink economy must tread carefully. Subtlety is key.

"These ads, for the most part, do not outright voice support for same-sex couples, rather include them as an element in advertisements being accepted by others," said Daxue Consulting's Malmsten.

A Cathay Pacific Airways advert that showed a same-sex couple holding hands on a beach was banned in a government-run airport and metro stations last year in Chinese-controlled Hong Kong, which has been rocked by months of pro-democracy protests.

The ban was later reversed after an online backlash by LGBT+ activists, according to local media reports.

Social media is harder to police, leading to a trickle of gay-friendly online adverts that target a specific audience.

China banned online content showing "abnormal" behaviors - including homosexuality - in 2017 in a bid to promote "socialist values" and to assert Communist Party control over online discussions in the traditionally Confucian society.

But when China's Twitter-equivalent Weibo banned gay content in 2018, it was forced to reverse its decision within days after an outcry among pro-LGBT+ Chinese, using hashtags, open letters and even calling on people to dump shares in the company.

'PRIDE BANDWAGON'

In a sign of changing attitudes, China's top legislative body, the National People's Congress, last year said that introducing same-sex marriage was one of the most popular requests made by people.

While no new legislation was outlined, the statement raised hopes of reform among LGBT+ Chinese in a year when Taiwan became the first place in Asia to allow same-sex marriage.

Popo Fan, a Chinese filmmaker and LGBT+ activist based in Berlin, said the impact of pro-gay online content was limited in China as it often only reached young, well-educated, tech-savvy people on high incomes.

"Those advertisements are only targeting people who can buy or use the internet and smartphones," he said.

"A lot of people don't have this access and they have no opportunity to get any (LGBT+) information."

While pro-gay adverts can help to challenge taboos, China is far from accepting or legalizing same-sex relationships, said Suki Chung, an LGBT+ rights campaigner at Amnesty International.

And many companies were simply riding the "pride bandwagon" of LGBT+ marketing, without having genuinely inclusive policies towards sexual and gender minorities, she said from Hong Kong.

"LGBTI marketing ads will become a growing trend in the greater China region, given the lucrative pink dollars and the look-good image of being a 'social change maker' or pioneer," she said.

"Real change is still far away given that the Chinese government still imposes tight controls ... but the power of online netizens and LGBTI communities in fighting back against the government propaganda is strong."

source: news.abs-cbn.com

Like medieval Europe, virus idles China growth engine

Workers are stuck in their hometowns. Officials want detailed health plans before factories or offices can reopen. Assembly lines that make General Motors cars and Apple iPhones are standing silent.

More than two weeks after China locked down a major city to stop a dangerous viral outbreak, one of the world’s largest economies remains largely idle. Much of the country was supposed to have reopened by now, but its empty streets, quiet factories and legions of inactive workers suggest that weeks or months could pass before this vital motor of global growth is humming again.

Global growth could suffer the longer China stays in low gear. It has been hampered by both the outbreak and its own containment efforts, a process that has cut off workers from their jobs and factories from their raw materials. The result is a slowdown that is already slashing traffic along the world’s shipping lines and leading to forecasts of a sharp fall in production of everything from cars to smartphones.

“It’s like Europe in medieval times,” said Joerg Wuttke, president of the European Chamber of Commerce in China, “where each city has its checks and crosschecks.”

New figures show authorities still have a long way to go before the outbreak can be tamed. On Monday, authorities reported the most deaths from the new coronavirus in a single day, raising the death toll by 97 to 908.

In a sign that China’s leaders feel increasing pressure to look like they are in control, Xi Jinping, the country’s top leader, toured a Beijing neighborhood and hospital, in what state media described as an inspection of the front line of the outbreak. Chinese officials have been roundly criticized online even in the face of tough censorship for what many see as a slow initial response and the suppression of early warnings.

On Monday, a team from the World Health Organization landed in Beijing to work with Chinese researchers battling the coronavirus. Their arrival could signal a shift in attitude among China’s leaders, who had balked at a visit and have long worked to show that they do not need foreign assistance to tackle problems.

The organization’s director general, Tedros Adhanom Ghebreyesus, cited with concern instances of infections among people who had not traveled to China, suggesting that even more cases could emerge. “In short, we may only be seeing the tip of the iceberg,” he wrote on Twitter.

Chinese health officials have been encouraged that the pace of recoveries among victims has outpaced deaths for more than a week. The rate of infection, however, has continued to soar, suggesting that the worst is still to come.

It is becoming increasingly clear that restarting China — the world’s largest manufacturer and a titan of global trade — would be difficult even if the country makes major strides in the next few days toward containing the outbreak.

Until then, the damage is spreading.

On Monday, Nissan of Japan said it would shut down its plan in Kyushu, Japan, for four days beginning later this week “due to supply shortages of parts from China.” Other carmakers like FCA in Italy and Hyundai in South Korea have already warned that a lack of parts from China could force them to curtail production in their home markets.

The China Development Forum, the country’s premier gathering of business leaders and economists, said its annual meeting, set for next month, had been postponed indefinitely.

Government officials had extended China’s official Lunar New Year holiday by three days to Feb. 3 to keep people home. Major business hubs, like the cities of Beijing and Shanghai and the provinces of Guangdong and Shandong, then further extended holidays until Monday.

As the day dawned, it was clear that business as usual had not resumed. Traffic in Beijing was much lighter than normal, stores remained closed, and many residents worked from home or did not work at all.


Major companies said their factories remained closed or were running slower than usual. Ford Motor said that its joint venture with one of China’s biggest state-owned firms was restarting some production but that it would “ramp up our production over the following weeks.”

General Motors said that it would reopen the first of its huge assembly plants in China only Saturday and would gradually reopen the rest over the following two weeks, “based on local employees’ safety readiness, supply chain readiness and product inventory needs.”

China’s containment efforts are contributing to the disruptions.

Authorities have locked down a region of central China around Wuhan, the city at the center of the outbreak. Local authorities are taking a tough stance with traffic, meaning workers are struggling to return to their jobs. Many towns and cities have begun imposing two-week mandatory quarantines on arriving truck drivers who picked up cargos in cities with disease outbreaks or even just drove through these areas.

Wu Lin, an associate director at a Shanghai advertising company, returned to Wuhan, her hometown, for the holidays Jan. 21 and had a high-speed train ticket back to Shanghai on Feb. 2. But her ticket was canceled soon after Wuhan was locked down, and she has tried and failed repeatedly since then to find a way out.

“There is no point to keep looking,” she said.

Shipyards around the country have run into labor shortages, said Tim Huxley, chief executive of Mandarin Shipping, a Hong Kong freighter shipping company. Shipbuilders and ship repair providers have begun citing these labor shortages to invoke clauses in their contracts that allow them to delay completion of projects for events beyond their control, he said.

Aside from fear of disease, the country’s nearly 300 million migrant workers — almost two-fifths of the labor force — now have another reason to be reluctant to travel to distant cities: Their children are still home. Depending on the province, many schools are not scheduled to resume until Feb. 25 or even March 1.

Even factories with enough workers are running into further problems. The packaging industry is almost shut down, so everything from plastic packing to steel drums is running out, Wuttke said.

Local regulators are putting up even more barriers.

Before businesses in big manufacturing hubs like Shanghai, Shenzhen, Suzhou or Nanjing can reopen, they must now verify the travel history and health of every employee over the past two weeks. They must have frequent temperature checks of employees, hand-washing procedures and a plan to isolate and refer to hospitals anyone showing even fevers as low as 99.1 degrees Fahrenheit (37.2 degrees Celsius).

Most difficult of all, businesses cannot reopen without prior approval of their health plans by municipal officials — and larger operations also have to wait for a site visit from a health official.

Shenzhen, a vast sprawl of electronics factories and skyscrapers next to Hong Kong, issued new health and safety rules Sunday and said that factories that make iPhones and other Apple products would have to meet them before opening. Foxconn Technology, a Taiwanese company that owns the factories, said it met all health and hygiene rules but declined to comment on when production would restart at specific locations. Apple declined to comment.

Apple’s iPhone production, which is heavily concentrated in China, could drop by 10 percent in the first 3 months of the year, projected TrendForce, a Taiwan-based technology forecasting firm.

The municipal government in Shanghai, home to more than 20 million people and a vast array of businesses, said that only 70 percent of the city’s manufacturers were taking steps to resume production. Few have actually received permission to do so.

Businesses “want to protect staff, but also nobody wants to get caught offsides when it comes to the labor law or the daily announcements from the government,” said Ker Gibbs, president of the American Chamber of Commerce in Shanghai.

It is not yet clear how the ripples from China’s slowdown will affect the United States. Businesses that rely on assembling a lot of different parts from various suppliers could become the hardest hit. At the top of that list is the auto industry — a single car may require as many as 30,000 parts from various suppliers.

American businesses have been trying to diversify away from China as President Donald Trump’s trade war with Beijing has made it less economical to manufacture there. But a lot of steering parts, electronics and even door hinges still come to the United States from China, said Razat Gaurav, chief executive of Llamasoft, a company in Ann Arbor, Michigan, that handles supply chain logistics for big automakers and aerospace companies in North America.

“If the current coronavirus crisis continues to impact production capacity in China," he said, “it will ultimately impact auto assembly plants in the US and Mexico.”


2020 The New York Times Company

source: news.abs-cbn.com

Chinese markets plunge as rising virus death toll fuels fears for global growth

BEIJING -- The death toll from a coronavirus epidemic in China rose to 361 and Chinese stock and commodity markets fell heavily on Monday as investors retreated into safe-haven assets in the first trading session after an extended Lunar New Year break.

Chinese stock and commodity markets plunged at the open in their first session since Jan. 23, when the outbreak of the newly identified virus had claimed only 17 lives in Wuhan city in Hubei province.

Since then the flu-like virus has spread to more than two dozen other countries and regions, with the first death outside of China reported on Sunday, that of a 44-year-old Chinese man who died in the Philippines after travelling from Wuhan.

The total number of deaths in China rose to 361 as of Sunday, up 57 from the previous day, the National Health Commission said. The number of new confirmed infections in China rose by 2,829, bringing the total to 17,205.

The Shanghai Composite index shed 8 percent to hit one-year low on Monday, wiping almost $370 billion off the market value, according to Reuters calculations.

The yuan began trade onshore at its weakest level this year . Iron, oil and copper traded in Shanghai all dropped by their daily limits, catching up with global price falls as the spread of the virus has weighed on the world's growth outlook.

Investors were bracing for volatility when onshore trade in Chinese stocks, bonds, yuan and commodities resumed, following a steep global selldown on fears about the impact of the virus on the world's second-biggest economy.

Looking to head off a panic, China's central bank said it would inject 1.2 trillion yuan ($173.8 billion) of liquidity into the markets via reverse repo operations on Monday.

Beijing also said it would help firms that produce vital goods resume work as soon as possible, state broadcaster CCTV reported.

But while stock markets reopened, most provinces have extended the Lunar New Year holiday to try and contain the virus, with workers in Hubei not scheduled to return to work until after Feb. 13.

Cities like Wuhan remain in virtual lockdown with travel severely restricted, and China is facing mounting international isolation as well due to restrictions on flights to and from the country.

At least another 171 cases have been reported in more than two dozen other countries and regions, including the United States, Japan, Thailand, Hong Kong and Britain.

The World Health Organization has declared the outbreak a public health emergency of international concern, but said global trade and travel restrictions are not needed.

More than 250 people from 30 countries arrived in France on Sunday after being flown out of Wuhan, the center of the outbreak, in the latest evacuation of foreign nationals from the locked-down city.

Australia evacuated 243 people, many children, from Wuhan on Monday and will quarantine them on a remote island in the Indian Ocean off its northwest coast.

Australia on Saturday followed the United States in barring entry to all foreign nationals travelling from mainland China.

The Group of Seven leading industrialized democracies are trying to find a common approach for dealing with the fast-spreading new coronavirus, German Health Minister Jens Spahn said on Sunday.

The virus is thought to have emerged late last year in a Wuhan market illegally trading wildlife. It can cause pneumonia and spreads between people in droplets from coughs and sneezes.

It has created alarm because it is spreading quickly and there are still important unknowns surrounding it, such as its death rate and whether it is able to spread before any symptoms show.

The number of deaths in China from the new virus has now passed the total Chinese toll from the 2002-03 outbreak of Severe Acute Respiratory Syndrome (SARS), another coronavirus which emerged from China and killed almost 800 people around the world.

Even so, Chinese data on the numbers of infections and deaths suggests the new coronavirus is less deadly than the SARS outbreak, although such numbers can evolve rapidly.

source: news.abs-cbn.com

China inflation surges as pork prices soar

BEIJING - China's consumer inflation accelerated at its fastest pace in almost 6 years in September as African swine fever sent pork prices soaring nearly 70 percent, official data showed Tuesday.

Authorities have gone as far as tapping the nation's pork reserve to control prices of the staple meat, as the swine fever crisis could become a political and economic liability for the state.

The consumer price index (CPI) -- a key gauge of retail inflation -- hit 3.0 percent last month, the National Bureau of Statistics (NBS) said, up from 2.8 percent in August and the highest since since November 2013.

Analysts in a Bloomberg news poll had forecast 2.9 percent.

The rise was caused by food price inflation, particularly disruptions to pork supply, Capital Economics said in a note.

The price of pork soared 69.3 percent on-year in September, the NBS said.

Beijing's official statistics say around one million pigs have been killed since the first outbreak of swine fever in August but that is widely considered to be an underestimate.

This in turn has also pushed up prices of other meats including beef, chicken and duck and eggs by up to 19 percent as consumers switched to other sources of protein. 

"Looking ahead, consumer price inflation should continue to accelerate in the coming months as supply disruptions continue to push up pork prices and as the drag from lower oil prices eases," said Martin Lynge Rasmussen from Capital Economics.

Producer prices, however, continued to slide for the fifth straight month, hit by weakening demand and mounting trade tensions with the US.

The producer price index (PPI) -- an important barometer of the industrial sector that measures the cost of goods at the factory gate -- contracted 1.2 percent in September from the previous year, the NBS said.

A slowdown in factory gate inflation reflects sluggish demand, while a turn to deflation could dent corporate profits and drag on the world's number two economy.

This in turn could lead to a drop in prices globally. 

source: news.abs-cbn.com

World stock markets extend gains on China turnaround

NEW YORK -- Stock markets rallied on Monday, building on strong pre-weekend gains, with investors buoyed by forecast-busting Chinese manufacturing data.

Europe and Asia posted gains at the close, and Wall Street registered another strong session to open the second quarter.

Analysts also cited optimism over US-China trade talks as a positive driver.

The broad-based S&P 500 jumped 1.2 percent, extending the positive trend after notching its best quarterly performance since 2009.

Markets had stumbled towards the end of March on worries about slowing growth or a recession but "it feels like some of that concern is receding," said Art Hogan, chief market strategist at National.

"The data is starting to stabilize," he said.

US manufacturing data was strong. US retail sales disappointed in February but the result was tempered somewhat by an upward revision to the January data.

The yield on the 10-year US Treasury yield jumped on Monday. Last week's dip in the benchmark had been seen as a sign of medium-term economic weakness.

But the day's most oft-cited catalyst was a March purchasing managers index showing growth in the Chinese manufacturing sector was far better than expected. 

"The Chinese manufacturing sector has been under the microscope... as a weekend of positive news for the sector helps drive markets higher," said Joshua Mahony, senior market analyst at IG trading group. 

"Four months of stagnant and negative growth in the manufacturing sector has understandably hit sentiment globally, given the impact Chinese business has upon global growth.

"Thus it comes as no surprise to see the optimists come out in force today" after the strong figures.

"The manufacturing print... will go a long way to allaying slowdown fears about China, at least in the short-term as the US-China trade talks move back to Washington this Wednesday," said OANDA senior market analyst Jeffrey Halley.

Top negotiators from the world's two biggest economies meanwhile flagged progress in last week's discussions in Beijing on the tariffs row ahead of this week's talks.

KEY FIGURES AROUND 2100 GMT (5 A.M. TUESDAY IN MANILA)

New York - Dow: UP 1.3 percent at 26,258.42 (close)

New York - S&P 500: UP 1.2 percent at 2,867.19 (close)

New York - Nasdaq: UP 1.3 percent at 7,828.91 (close) 

London - FTSE 100: UP 0.5 percent at 7,317.38 (close) 

Frankfurt - DAX 30: UP 1.4 percent at 11,681.99 (close)

Paris - CAC 40: UP 1.0 percent at 5,405.53 (close)

EURO STOXX 50: UP 1.0 percent at 3,385.38 (close)

Tokyo - Nikkei 225: UP 1.4 percent at 21,509.03 (close)

Hong Kong - Hang Seng: UP 1.8 percent at 29,562.02 (close)

Shanghai - Composite: UP 2.6 percent at 3,170.36 (close)

Pound/dollar: UP at $1.3103 from $1.3035 at 2100 GMT on Friday

Euro/pound: DOWN at 85.58 pence from 86.06 pence

Euro/dollar: DOWN at $1.1213 from $1.1218

Dollar/yen: UP at 111.35 yen from 110.86 yen

Oil - Brent Crude: UP $1.45 at $69.01 per barrel

Oil - West Texas Intermediate: UP $1.43 at $61.59 per barrel

source: news.abs-cbn.com

Asian shares retreat, China cuts growth target

TOKYO -- Asian shares stepped back on Tuesday after China cut its economic growth target and pledged measures to support the economy amid growing challenges from rising debt and a dispute over trade and technology with the United States.

Australian shares dropped 0.6 percent while South Korea's Kospi lost 0.5 percent. MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.2 percent and Japan's Nikkei dropped 0.3 percent.

China cut its growth target for this year to 6.0 to 6.5 percent, in line with expectations, from around 6.5 percent last year.

Premier Li Keqiang also said the country sees budget deficit of 2.8 percent of GDP and the Finance Ministry set quota for local government's special bond issues at 2.15 trillion yen, 0.8 trillion yen above last year.

"The increase in local governments' special bond is fairly large," said Naoto Saito, chief researcher at Daiwa Institute of Research.

"Since those funds will be solely used for infrastructure investments, you cannot avoid the impression that the government is relying on investments to support the economy in the short-term rather than de-leveraging. This could cause problems in the longer term."

Wall Street's major indexes fell on Monday, with the Dow Jones Industrial Average shedding 0.79 percent and the S&P 500 losing 0.39 percent.

An unexpected fall in US construction spending, data that normally attracts little attention, was cited as a factor.

But others saw the retreat as a long overdue correction after a rally since late last year.

MSCI's World index,, a gauge of 23 developed markets, has risen 16.6 percent from its near two-year low set on Dec. 26 low, even as the earnings outlook stagnated, driven by hopes of a dovish Fed and a compromise between Beijing and Washington on trade.

The index is now trading at 14.6 times expected earnings, the highest level since early October, when a bear market began globally.

Thus a media report on Monday that US President Donald Trump and Chinese President Xi Jinping could reach a formal trade deal at a summit around March 27 prompted profit-taking rather than follow-through buying.

The 10-year US Treasuries yield dropped to 2.724 percent after touching from six-week highs of 2.768 percent in the past two sessions.

In currency markets, the dollar held an upper hand against many of its rivals as other major central banks are seen tilting to a more dovish stance than the Federal Reserve.

The euro fetched $1.1339, having dropped 0.25 percent on Monday, amid expectations the European Central Bank is preparing to give banks more cheap, long-term funding at its policy meeting on Thursday.

The dollar traded at 111.75 yen, off a 10-week high of 112.08 on Friday.

Gold has fallen for four days in a row by Monday to as low as $1,283.10 per ounce, its lowest level since Jan. 25. It last stood at $1,286.6. Silver hit two-month lows of $15.0725 per ounce.

Oil prices held firm after OPEC ally Russia said it would ramp up supply cuts.

US crude futures stood at $56.41 per barrel, down 0.3 percent in early Asia but still up 1 percent on the week.

source: news.abs-cbn.com

World stock markets falter after China data confirms economic slowdown

LONDON -- European shares fell on Monday from six-week highs as a slowdown in China's economy stalled a global equity rally, but sterling rallied to the day's highs after Prime Minister Theresa May promised to be more "flexible" with lawmakers over Brexit.

Trade in general was subdued with US markets closed for the Martin Luther King Jr. Day but equity prices were hit after data showed the Chinese economy, the world's second biggest, grew 6.4 percent in the fourth quarter from a year earlier, matching levels last seen in early 2009 during the global financial crisis.

The number was in line with forecasts, while factory output picked up stronger-than-expected in December and stronger services sector were some bright spots. That, along with expectations of more stimulus from Beijing, pushed Asian markets to the highest since early-December .

But the rally in world shares appeared to end there.

A pan-European equity index fell 1.3 percent, below 6-week highs hit on Friday while Germany shares, heavily exposed to exports to China, was 0.6 percent lower on the day.

US stock market futures, which offer an indication of how Wall Street shares will next open, were down roughly half a percent.

"It seems that the optimism we saw in Asia did not extend into Europe," said Brittany Baumann, macro strategist at TD Securities in London.

"And the start of this week is a reflection of the downside risk that still exist - Brexit and China/US trade developments."

China's economy faces deep and complicated changes, President Xi Jinping said on Monday.

Growing signs of weakness in China -- which has generated nearly a third of global growth in recent years -- has fueled anxiety about risks to the world economy in recent weeks and are weighing on profits for firms such as Apple.

"On balance, the (China) data is relatively positive and does not point to a hard landing," said Timothy Graf, head of macro strategy at State Street Global Advisors in London.

"The consumption data being better than expected is the positive takeaway in that China is trying to engineer a move towards a consumer-led economy."

But in other signs of caution, the Australian dollar , often used a liquid proxy for China investments, nudged down to $0.7156.

Oil prices also fell on further evidence that economic growth in China, the world's second largest crude consumer, was easing. Brent crude oil futures fell 0.2 percent to $62.57 a barrel.

BREXIT "PLAN B"

In currency markets, sterling firmed after Prime Minister Theresa May indicated she would be more "flexible" with lawmakers, even though she refused to rule out a no-deal Brexit. There are few signs she can break a deadlock with parliament after her Brexit deal was rejected last week.

May offered to tweak her defeated deal by seeking further concessions from the European Union on a backup plan to avoid a hard border in Ireland.

Sterling fell initially as she spoke, then climbed to session highs, rising above $1.29. Against the euro it touched a high of 88.07 pence, up 0.2 percent on the day, reversing earlier losses.

"Her failure to detail Plan B could be the catalyst to the parliament to taking control of the process," John Marley, a senior currency consultant at FX risk management specialist, SmartCurrencyBusiness, said.

"Ultimately that makes an extension, a deal or even a second referendum more likely."

Britain's FTSE index traded around flat while British government bond yields slipped 3 basis points to 1.32 percent.

source: news.abs-cbn.com

Trade war, censors blow chill wind through China's giant tech scene

BEIJING -- Wang Miaoyi's small one-bedroom apartment, which doubles as her design studio, is overflowing with game magazines, figurines and boxes of sci-fi novels.

The 30-year old game developer is a child of the county's tech boom: she studied at one of China's top universities and her company hit it big with an award-winning game that was published on Nintendo's Switch console and the PC gaming platform Steam, with plans for roll-out on other game platforms.

Now her ambitions - and those of many others across China's giant tech industry - are facing a reckoning, with rising state control over the sector, tightening regulation and a biting trade war with the United States stymieing growth.

"(In 2015) doing a start-up was popular. So many young people set up small businesses, like developing games, and dreamed of making big money as well as being free," she said. "But they found out now it's really unrealistic."

Wang says she has had to abandon for now hopes of releasing the game on new platforms in China, closing the original studio that developed it and working instead on updates with a skeleton crew of freelancers. She has moved from the Beijing tech hub of Zhongguancun to the city's cheaper far-west outskirts to cut costs.

She is not alone. Reuters interviewed a dozen tech industry insiders, from gig economy workers to investors, who said that the boom days of easy returns looked to be over.

Until last year, China's tech industry had enjoyed years of breakneck growth. Firms including Alibaba Group Holding Ltd and Tencent Holdings Ltd almost doubled in value in 2017 alone, making big-ticket investments as part of a multi-billion dollar expansion into cloud, offline retail and finance.

But now the market is feeling the pinch. Hiring numbers are down, company margins are thinner and tumbling technology stocks have wiped nearly half a trillion dollars this year from the value of China's top listed tech firms.

The biggest names in tech have flagged concerns, including Alibaba and Baidu Inc, who revised down their full-year sales forecasts in recent weeks on the weaker outlook.

"Investments into the tech space have definitely cooled down, measured by almost every metric: number of deals, deal size or fund raising," said Zhang Chenhao, Shanghai-based Managing Partner at technology-focused Prometheus Fund.

"I think this year is the first time over the last 30 years when greed yields to the fear."

HAND OF THE STATE

The technology sector is facing challenges on all sides.

A broader economic slowdown saw China's third quarter GDP slow to its weakest pace since the global financial crisis. The currency has slid against the dollar and domestic markets are down sharply.

Alongside a series of tit-for-tat trade tariffs, the United States has accused China of stealing technology, barring tech acquisitions by Chinese firms and blacklisting others.

At home, tech companies from social media to gaming and fintech have seen tightening regulation and a heavier hand from the ruling Communist Party.

Gaming and social media giant Tencent has seen its stock price dive by more than 25 percent this year amid a temporary ban on licences for games, its top revenue driver.

At the country's top internet forum in Wuzhen this week, officials signaled they would look to rein in the country's tech giants.

"They can be big but we should also be well-regulated," said Gao Xiang, vice minister of China's Ministry of Industry and Information Technology on Thursday.

China's regulators have already cracked down on everything from rude joke apps to livestream bloggers disrespecting national anthem - sending a chill through the free-wheeling and innovative online arena.

"The people who worry about technology is first older people, second government and third successful people, they hate it and worry about it," Alibaba's billionaire executive chairman Jack Ma said at an event in Shanghai last week.

"Normally businesses do innovation and governments talk innovation. In order to protect yesterday's interests... they will say please don't do it."

This year Alibaba has lowered its revenue forecast for the first time since listing in 2014.

Meanwhile, local ride-sharing giant Didi Chuxing, backed by Japan's SoftBank Group Corp, has cut the subsidies it pays to drivers after being forced to shutter its car-pooling services under a plan agreed with regulators following criticism over the murders of two young female passengers in separate incidents.

"(In 2015) I bought my first vehicle because you could earn almost 800 yuan a day with the subsidies," says Huang Sun, who used to drive full-time for the company but now says he only takes rides when he is bored. "Now maybe you can't even earn 200 yuan if you drive all day."

HIRING FREEZE

The chill across the tech industry is reflected in hiring data.

According to statistics released by leading local job website Zhaopin.com, job demand in the IT and internet sector has dropped by 51 percent as of September compared with a year earlier.

Companies have slowed hiring in certain fields, including sales and software development, recruiters and human resources staff at Alibaba and Tencent said, asking not to be named because they were not authorized to speak to press.

Tencent did not respond to a request for comment. Alibaba had no immediate comment.

"In general, they are all reducing headcount, or they're not preparing a very big budget for headhunting," said Mocca Wang, who is the director of the IT industry unit at international recruitment firm Spring Professional, which works with companies like Alibaba, Tencent and Baidu.

Smaller start-ups, a key driver of growth in the sector, are also being squeezed by tighter access to credit.

"These companies can't get capital and can't invest," said Wang. "They're going bankrupt."

China's tech firms are, to be sure, still posting sales growth rates above overseas peers.

Tencent chief Pony Ma told state television in a recent interview that there was still "tremendous potential" in the market, though admitted "there are challenges of various kinds right now".

But the numbers suggest tougher times lie ahead - a worry for China's steeply-valued private tech start-ups and newly-listed firms such as smartphone maker Xiaomi Corp and Tencent-backed food deliver giant Meituan Dianping .

"Before the feeling was that anyone can get funding, that if you throw out words like blockchain, AI, big data and machine learning that would get you funding," said Benjamin Speyer, managing director at Hangzhou-based consultancy Serica.

"Now everyone is a bit more nervous about potentially making a mistake with their money."

Alibaba, whose China commerce sales growth dropped to its lowest rate since 2015 in the last quarter, said it would take less income from its platforms for the near future, effectively subsidizing merchants, in an effort to retain brands on its platform.

Competitor JD.com Inc, which posted a loss last quarter, is seeking to revive profits by outsourcing some of its 2.5 million square meters of warehouse space.

The country's upstart technology workforce are even more keenly aware of the slowdown.

Even as property and living costs continue to rise sharply in major cities such as Beijing and Shanghai, tech workers say salaries can't keep up.

Beijing-based Liu Wangwei works as a software engineer at one of the country's highest-valued start-ups and rents a two-bedroom apartment because his partially-disabled mother often stays with him.

He said his rent has risen by almost 50 percent since they moved to the area in 2014 and says he is considering moving to another of the company's offices in a smaller city where the government subsidises housing for technology workers.

"I always thought I could join the well-known tech companies and never worry about money," said Liu. "When I was in university our teachers gave us encouragement to be like (Steve) Jobs and Jack Ma. It's not the same as we were promised."

source: news.abs-cbn.com

As trade war looms, China cuts some banks' reserve requirements

BEIJING -- China's central bank said on Sunday it would cut the amount of cash that some banks must hold as reserves by 50 basis points (bps), releasing $108 billion in liquidity, to accelerate the pace of debt-for-equity swaps and spur lending to smaller firms.

The reserve reduction, the third by the central bank this year, had been widely anticipated by investors amid concerns over market liquidity and a potential economic drag from a trade dispute with the United States.

But the 700 billion yuan ($107.65 billion) in liquidity that the central bank said would result from the reduction in reserves was bigger than expected.

Expectations of a cut had risen after the State Council, or cabinet, said on Wednesday monetary policy tools including targeted cuts in banks' reserve requirement ratios will be deployed to strengthen credit flows to small firms and keep economic growth in a reasonable range.

Economists are not ruling out further reserve requirement reductions for the rest of the year as borrowing costs rise due to Beijing's clamp-down on leverage in the financial system, a campaign now in its third year, while uncertainty over Sino-US trade ties persists.

The People's Bank of China (PBOC) said on Sunday that the latest targeted cut in some banks' reserve requirement ratios (RRRs) - currently 16 percent for large banks and 14 percent for smaller banks - will take effect on July 5.

The PBOC said the cut will release about 500 billion yuan ($77 billion) for the country's five large state banks and 12 national joint-stock commercial banks. Lenders are encouraged to use the money to conduct debt-for-equity swaps.

China's policymakers have been pushing for debt-for-equity swaps since late 2016 to ease pressure on firms struggling with their debts.

The country's top banks, controlled by the government, have rushed to sign deals with state-owned enterprises to ease their debt burden and give them time to turn around their business and improve their creditworthiness.

The latest RRR cuts will also release about 200 billion yuan in funding for mid-sized and small banks to increase lending to credit-strapped small businesses, the PBOC said.

The combined 700 billion yuan liquidity injection exceeded market expectations of 400 billion yuan. In the PBOC's last targeted RRR cut in April, 400 billion yuan of net liquidity was released.

"The intensity of the move exceeded market expectations," said Wang Jun, Beijing-based chief economist at Zhongyuan Bank.

"This move will help support the real economy and stabilise financial markets. We've seen rising debt defaults and funding strains on small firms, as well as a sharp adjustment in the capital market."

But the latest reserve cut signals a "policy fine-tuning," not a policy reversal, Wang said.

The central bank said on Sunday it would keep monetary policy prudent and neutral.

Sunday's announcement followed the worst weekly loss in the Chinese stock market since early February as fears of a full-blown trade war with the United States weighed.

The Chinese yuan on Friday also fell to its lowest versus the dollar in more than 5 months, though it has remained firm against a basket of trading partners' currencies, and a sharp depreciation is not in the cards.

TRADE WAR

The latest RRR cut is set to take effect a day before the United States and China are expected to begin collecting increased tariffs on respective lists of goods.

Fears of a full-scale trade war with Washington have magnified concerns about the outlook for the world's second-largest economy, following weaker-than-expected Chinese growth data for May and as Beijing's financial regulatory crackdown starts to weigh on business activity.

Net exports overall were already a drag on growth in the first quarter after giving an added boost to the Chinese economy last year, highlighting the need for sustained strength in domestic demand if significant new US tariffs are imposed.

Beijing is also likely to backtrack on efforts to reduce its reliance on debt if the dispute escalates into an all-out trade war, some economists say.

Beijing's financial risk clamp-down has already slowly pushed up borrowing costs, and is restricting alternative, murkier funding sources for companies such as shadow banking.

Strained liquidity conditions have caused a growing number of credit defaults with private companies facing mounting refinancing risks. Latest official surveys also showed tight funding has hit smaller manufacturers.

The weighted average lending rate for non-financial firms, a key indicator reflecting corporate funding costs, rose 22 basis points in the first quarter to 5.96 percent, PBOC data showed. That compared with a total of 47 basis points in 2017.

Policymakers have been trying to strike a delicate balance between the need for tougher supervision and reforms and ensuring the stability of the financial system, while keeping economic growth on track.

ANZ Research said on Sunday that it still expected another 50 bps RRR cut in October.

Economists still expect China's economic growth to slow to 6.5 percent this year from 6.9 percent in 2017, citing rising borrowing costs, tougher limits on industrial pollution and an ongoing crackdown on local governments' spending to keep their debt levels in check.

source: news.abs-cbn.com

China seen to post solid 1Q growth as debt risks loom

BEIJING - China is expected to report on Monday that its economy grew 6.8 percent in the first quarter, well above Beijing's full-year target, buoyed by surging government infrastructure spending and a gravity-defying property market that is showing signs of overheating.

A strong reading could help wobbly global financial markets but add to worries that China's government is still relying too heavily on old growth engines like stimulus and not doing enough to tackle risks from an explosive build-up in debt.

Though policymakers have pledged repeatedly to push reforms to head off financial risks and asset bubbles, the government is seeking to keep the world's second-largest economy on an even keel ahead of a major leadership transition later this year.

Beijing has set a slightly more modest growth target of around 6.5 percent for this year, theoretically offering more wiggle room for reforms after the economy grew 6.7 percent in 2016 - the weakest pace in 26 years.

Most economists polled by Reuters expect the economy expanded 6.8 percent in the first quarter from a year earlier, the same pace as in the fourth quarter of 2016. On a quarter-on-quarter basis, it likely grew 1.6 percent in January-March from the previous three-month period.

Economists at ANZ reckon growth may even clock in at 6.9 percent in the quarter, pointing to strong property and infrastructure investment.

"The announcement in early April of the construction of the Xiongan new economic zone, which requires massive infrastructure spending, suggests Chinese authorities are likely to rely more on investment to stabilize growth in the next few years," ANZ said in a note.

China's long-ailing industrial sector has been posting its best profits in years, thanks to higher prices for steel and other building materials, giving "smokestack" industries more cash flow to pay off debt and invest in more efficient plants.

China's export outlook also brightened considerably on Thursday as it reported forecast-beating trade growth and as US President Donald Trump softened his anti-China rhetoric in an abrupt policy shift, though the risk of US protectionist trade action is by no means off the table.

Still, many analysts expect economic growth to cool later this year as the impact of earlier stimulus measures starts to fade and as local authorities resort to ever-tougher measures in a bid to get soaring home prices under control.

ACCUMULATED PROPERTY CURBS

Most analysts don't see a price crash, but believe the accumulated weight of property curbs will eventually translate into weaker sales, construction and investment.

China imported the most iron ore on record in the first quarter, but iron ore and steel futures prices are nosediving on fears that its steel production is outweighing demand.

Beijing also is continuing to rely heavily on new credit to generate growth as productivity slows, despite worries about debt risks.

China's banks extended the third highest loans on record in the first quarter, though March lending was less than expected.

At the same time, China's central bank has shifted to a tightening bias, and is using more targeted measures to contain risks in the financial system, after years of ultra-loose settings.

MORE RATE INCREASES?

The People's Bank of China (PBOC) has raised short-term interest rates several times already this year, while boosting its regulatory oversight.

Analysts predict further modest rate increases this year, but do not expect a full-blown policy rate hike as authorities fear tapping the brakes too hard would stunt economic growth.

The Organisation for Economic Co-operation and Development (OECD) says China's total private and public debt has exceeded 250 percent of GDP, up from 150 percent before the global financial crisis.

"While the authorities obviously recognize the risks, credit has continued to expand at a pace that looks unsustainable," analysts at Barclays said.

"Although this does not necessarily equate to the risk of an imminent crisis, the apparent plan to 'kick the can down the road', at least past the Party Congress, means that problems left to fester may become more difficult to resolve."

source: news.abs-cbn.com

China forex regulator tightens controls to stem outflows: sources

SHANGHAI/HONG KONG - China is stepping up measures to stem capital outflows after the yuan currency skidded to more than eight-year lows, taking aim at outbound investment, sources said on Tuesday.

The State Administration of Foreign Exchange (SAFE) has begun vetting transfers abroad worth $5 million or more and is stepping up scrutiny of major outbound deals, including those with prior approval, sources with knowledge of the new rules said.

Capital outflows through both legal and illegal channels have added pressure to the yuan's slide. The Chinese currency has lost nearly 6 percent of its value against the dollar so far this year.

Sources said the forex regulator told banks about the new rules on Monday, the same day the government said it would stick to its "going out" strategy of encouraging outbound investment.

SAFE did not respond to a Reuters request for comment.

"Previously, only forex transfers worth $50 million or more needed to be reported to SAFE. Now, the threshold has been drastically lowered to $5 million, and covers both foreign currency and yuan," said one of the sources with direct knowledge of the rules.

"All we can do is to ask clients to be patient, and tell them that the transaction is being vetted by SAFE for authenticity and may not be approved."

The fresh restriction applies to transfers abroad under the capital account, for transactions such as portfolio or foreign direct investment.

The source said that even if an outbound investment had already obtained approval to buy foreign exchange, but the money had not been fully transferred, the remainder of the quota was now subject to further approval if it exceeds $50 million, which is regarded as a "large sum".

Two other sources confirmed the new rules.

Chinese state-owned banks were seen selling dollars in the onshore foreign exchange market for a second straight day on Tuesday, in what traders said appeared to be a bid to support the yuan.

The yuan has rebounded around 0.5 percent in the past few sessions.

source: news.abs-cbn.com

China data point to steadier economy for now, but Trump victory adds to risks

BEIJING - China's economy largely showed further signs of steadying in October as expected, but disappointing retail sales growth and fears of US trade frictions under incoming President Donald Trump are increasingly clouding the outlook.

Fixed-asset investment quickened slightly and beat expectations in January-October as the government stepped up infrastructure spending to support growth, official data showed on Monday.

But a number of other indicators released over the past week from exports to bank lending, as well as expectations of a slowdown in the heated property market, suggest economic momentum may falter in the months ahead.

"On balance, today's data suggest that the recent recovery in economic activity continued into the fourth quarter," Capital Economics said in a note.

"We expect growth to hold up well for another quarter or two. However, with credit growth now slowing and the property market beginning to cool the drivers of the recent recovery look set to fizzle out early next year."

China's leaders have depended on a surging real estate market and government infrastructure spending to drive activity this year and look set to meet their growth target of 6.5 to 7 percent. The construction boom in turn has helped perk up the ailing industrial sector, spurring demand for cement to steel.

But top policymakers and investors are also clearly growing more concerned about the risks of prolonged debt-fueled stimulus.

China's overall debt has jumped to more than 250 percent of GDP from 150 percent at the end of 2006, the kind of surge that in other countries has resulted in a financial bust or sharp economic slowdown, analysts say.

"I believe the overall policy tone has turned to risk management as the authorities are concerned about asset bubbles," said Singapore-based economist Zhou Hao at Commerzbank, predicting that the government will throttle back its aggressive stimulus before the end of the year.

INVESTMENT STILL HEAVILY RELIANT ON GOVERNMENT

Fixed-asset investment expanded 8.3 percent in the first 10 months from a year earlier, slightly ahead of market expectations and supported largely by government spending.

Investment by state firms surged 20.5 percent, though the pace cooled slightly from the first nine months.

In an encouraging sign, growth of private investment picked up to 2.9 percent from 2.5 percent in January-September, though it remained sluggish after hitting a record low of 2.1 percent in the first eight months of the year.

Private investment accounts for about 60 percent of overall investment in China.

Chinese policymakers have been trying to lure private investors into big infrastructure projects through public-private partnerships, but many lucrative sectors are still dominated by less efficient state firms.

UNCERTAINTIES
The most surprising miss for October was found in retail sales, though analysts were quick to note it was too early to tell if slowing consumption would turn into a trend.

Retail sales growth cooled to a five-month low of 10.0 percent from 10.7 percent in September. Analysts had forecast they would hold steady.

On Friday, Alibaba Group Holding Ltd.'s Singles' Day festival posted a record 120.7 billion yuan ($17.73 billion) worth of sales, though the gala shopping day saw growth slow as Chinese shoppers searched for deeper discounts and lower price tags.

Statistics bureau spokesman Mao Shengyong blamed the sales slowdown on a high level of comparison with last year.

"Consumption can maintain stable growth. There should not be a problem achieving this year's GDP growth targets," he told a news briefing.

October industrial output also missed expectations but to a much smaller degree, rising 6.1 percent, the same pace as in September but marginally less than forecast.

Stronger factory prices have helped boost industrial profits, relieving some pressure on companies squeezed by higher costs and weak demand, though there are concerns some of the gains are due to speculation and are not sustainable.

Data last week showed a sharp slowdown in bank lending last month, suggesting demand for mortgages is cooling after a spate of steps by local governments last month to restrict home purchases to cool soaring prices.

While property investment growth quickened in October to its highest since April 2014, some analysts suggested it could be due to a last-minute push by developers to complete construction projects as home sales and surging prices start to slow.

October exports and imports also fell more than expected, adding to doubts that the pick-up in economic activity in the world's largest trading nation can be sustained even if a trade war with the US does not materialize.

Trump had lambasted China throughout the campaign, drumming up headlines with his pledges to slap 45 percent tariffs on imported Chinese goods and label the country a currency manipulator his first day in office.

China's top leaders are due to map out economic and reform plans for 2017 at the annual Central Economic Work Conference expected in December.

Analysts believe it's too early for the government to start withdrawing policy support now due to rising domestic and global uncertainties, despite the risk of added debt.

source: www.abs-cbnnews.com