Business

China trade surplus in Jan-Feb reaches $125.16bn

Published

2 months ago

March 7, 2024

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China trade surplus in Jan-Feb reaches $125.16bn

China’s export and import growth in the January-February period beat forecasts, suggesting global trade is turning a corner in an encouraging signal for policymakers as they try to shore up a stuttering economic recovery.

China’s improved export data joins those of South Korea and Germany, and Taiwan, who all saw their shipments top expectations over the first two months of the year, with the Asian economies benefiting from a surge in demand for semiconductors.

Exports from the world’s second-biggest economy in the two months were 7.1 per cent higher than a year before, customs data showed on Thursday, beating a Reuters a poll that expected an increase of 1.9pc. Chinese imports were up 3.5pc, compared with a poll forecast for growth of 1.5pc.

Hence, China’s trade surplus grew to $125.16 billion, compared with a forecast of $103.7 billion in the poll and $75.3 billion in December.

“The better-than-forecast data echoes a recovery in global trade driven by the electronics sector, but also benefits from a low base effect, as export growth in January-February 2023 was -6.8pc,” said Xu Tianchen, senior economist at the Economist Intelligence Unit.

The customs agency publishes combined January and February trade data to smooth out distortions caused by the shifting timing of the Lunar New Year, which this year fell in February.

Chinese Premier Li Qiang on Tuesday announced a 2024 economic growth target similar to last year of around 5pc and promised to transform the country’s development model, which is heavily reliant on exporting finished goods and industrial overcapacity.

Read more: China development model to be remodelled, as Beijing targets around 5pc economic growth

Policymakers have been grappling with sub-par growth over the past year amid a property crisis with reduced consumer spending, divestment by foreign firms, manufacturers struggling for buyers, and a huge local government debt burden.

Policymakers will need to see a sustained rebound in exports to be convinced that the crucial engine of growth will help bolster the economy.

In contrast to the trade data, for instance, manufacturing activity in China in February shrank for a fifth month, according to the government’s purchasing managers’ index released a week ago, while new export orders decreased for an 11th consecutive month.

“After accounting for changes in export prices and for seasonality, we estimate that export volumes rose significantly in January and February, hitting a fresh high,” said Zichun Huang, China economist at Capital Economics, in a note.

“We doubt the sustainability of this strength, however, since exporters now have more limited scope to reduce prices to secure market share,” she added.

Some cause for optimism can be found in the fact China’s exports to the United States in January-February returned to growth, rising 5pc from a year earlier compared with a decline of 6.9pc in December. But outbound shipments to EU still shrank 1.3pc in the same period.

Policymakers have pledged to roll out further measures to help shore up growth after the steps implemented since June had only a modest effect, but analysts caution Beijing’s fiscal capacity is now very limited and note Li’s address to the annual meeting of the National People’s Congress also failed to inspire investor confidence.

Many analysts worry that China may begin flirting with Japan-style stagnation later this decade unless policymakers take steps to reorient the economy towards household consumption and market-allocation of resources.

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Business

Chinese firm aims to expand investments in Pakistan, shows interest in mining sector

Published

1 day ago

May 17, 2024

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Chinese firm aims to expand investments in Pakistan, shows interest in mining sector

A notable Chinese company has expressed keen interest in expanding its investment in Pakistan, in yet another sign of investor confidence boost in the leadership of Prime Minister Shehbaz Sharif.

A delegation from Chinese firm MCC Tongsin Resources led by its Chairman Wang Jaichen called on PM Shehbaz here on Friday.

The premier invited the Chinese company to invest in Pakistan’s mining sector and manufacturing of export goods.

Shehbaz assured the delegation that his government would extend all-out facilitation to the company from minerals exploration and processing to the export of goods.

The PM instructed the relevant federal ministers and officers to continue consultation with the Chinese firm, taking the Balochistan chief minister, provincial departments and stakeholders on board.

The delegates reposed trust in PM Shehbaz’s leadership, and expressed keen interest in enhancing their investment in Pakistan’s mining and minerals sectors.

The delegation briefed Prime Minister Shehbaz about the construction of a mineral park in Pakistan and their future investment plans.

The premier welcomed the Chinese firm and highlighted the priority steps by his government to promote foreign investment in Pakistan.

He said that being a time-tested friend, China supported Pakistan in every difficult hour for which the Pakistani nation was grateful to the leadership and people of China.

Federal ministers Ahad Khan Cheema, Dr Musaddik Malik, Rana Tanveer Hussain, Jam Kamal Khan and relevant senior officers attended the meeting.

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Business

Govt jacks up power price by Rs1.47 per unit

Published

1 day ago

May 17, 2024

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Govt jacks up power price by Rs1.47 per unit

The government on Friday increased the electricity tariff by Rs1.47 per unit.

According to Nepra sources, the collection from consumers will take place in August, September, and October.

The electricity companies had requested the funds as part of the third quarter adjustment for 2023-2024, seeking Rs 31.34 billion under capacity charges.

Sources said that Rs5.57 billion were requested for operation and maintenance costs, and Rs12.38 billion were requested for the transmission and distribution impact under monthly fuel cost adjustment.

Previously, Nepra had completed the hearing on the electricity companies’ request under the quarterly adjustment.

Nepra approved the Power Division’s request, allowing an increase of Rs 1.45 per unit in electricity prices.

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Business

Hong Kong allows China’s digital yuan to be used in local shops

Published

1 day ago

May 17, 2024

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Hong Kong allows China's digital yuan to be used in local shops

Hong Kong will allow mainland China’s pilot digital currency to be used in shops in the city, the head of its de facto central bank said on Friday, marking a step forward for Beijing’s efforts to internationalise the yuan amid rising geopolitical tensions.

The programme, backed by Beijing, will allow mainland Chinese and Hong Kong residents to open digital yuan wallets via a mobile app developed by China’s central bank and will permit them to make payments in retail shops and some online stores in Hong Kong and in mainland China.

Transactions using e-CNY, predominantly for domestic retail payments in China, hit 1.8 trillion yuan ($249.27 billion) as of end of June 2023, with 120 million digital wallets opened, according to the latest disclosure from China’s central bank.

Using the wallet, users can make payments at over 10 million merchants in 17 provinces and cities in the mainland.

Each wallet used in the city will be subject to a balance limit of 10,000 yuan, with single transactions and daily payments capped at 2,000 yuan and 5,000 yuan, respectively, officials from the Hong Kong Monetary Authority said.

Peer-to-peer transfers will not be allowed at the moment, according to the HKMA.

“By expanding the e-CNY pilot in Hong Kong .. users may now top up their wallets anytime, anywhere without having to open a mainland bank account, thereby facilitating merchant payments in the mainland by Hong Kong residents,” HKMA Chief Eddie Yue said.

Currently, users of other digital yuan wallets such as those operated by Ant Group and Tencent can make payments in the city.

Industrial and Commercial Bank of China, Bank of China Ltd, China Construction Bank Corp and Bank of Communications Co have been selected as e-CNY wallet operators.

The yuan’s use in global finance remains low, though it has shown steady increases.

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