Tag: China

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China’s exports miss forecasts as U.S. tariffs bite -imports record sharp decline

China exports drop

China’s exports in the January 2025 to February 2025 period rose 2.3% in U.S. dollar terms from a year earlier, significantly undershooting expectations of a 5% increase

That marked the slowest growth since April 2024 last year when exports increased by just 1.5% on the year, according to recently released data.

Imports surprised markets by declining 8.4% year-on-year in the first two months of 2025, the sharpest fall since July 2023.

Trump’s first round of 10% tariff hikes on Chinese goods took effect on 4th February 2025, followed by another 10% tariff increase just one month later, taking the cumulative levies to 20%.

China retaliated in kind.

* Data from the customs authority

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China announces 7.2% increase in defence spending and targets around 5% growth for 2025

China has unveiled plans for 2025, announcing a 7.2% increase in defence spending alongside a GDP growth target of around 5%

These decisions, revealed during the annual National People’s Congress in Beijing, reflect the nation’s strategic priorities amid a challenging and fast changing global landscape.

The 7.2% rise in defence spending mirrors last year’s increase, underscoring China’s commitment to modernizing its military capabilities. With a defence budget of approximately 1.78 trillion yuan ($245.7 billion), China maintains the world’s second-largest military budget, though it remains significantly smaller than that of the United States.

The funds are expected to support advancements in high-tech military technologies, including stealth fighters, aircraft carriers, and nuclear capabilities. This move comes as China navigates heightened tensions with the U.S., territorial disputes in the South China Sea, and concerns over Taiwan.

On the economic front, the target of around 5% GDP growth signals a cautious yet determined approach to sustaining economic momentum.

This figure aligns with last year’s target and reflects the government’s focus on addressing domestic challenges, such as a sluggish property market and subdued consumer spending, while countering external pressures like trade tensions with the U.S.

Premier Li Qiang emphasized the importance of boosting domestic consumption and fostering innovation to achieve this goal.

China’s dual focus on defence and economic growth highlights its efforts to balance national security with economic stability.

However, the path forward is fraught with uncertainties, including geopolitical tensions and the need for structural economic reforms.

As the world watches, China’s ability to navigate these challenges will shape its trajectory in the years to come.

China says

‘Tariff war, a trade war or any other type of war’ – China says it’s ready to fight U.S. until the end.

Ominous!

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Global markets slide into chaos as Trump pushes his ‘America First Agenda’

U.S. tariffs

Global markets have been thrown into turmoil following the announcement of sweeping tariffs by U.S. President Donald Trump

U.S. tariffs, which include a 25% levy on imports from Canada and Mexico and a 10% increase on Chinese goods, have sparked fears of a global trade war. Retaliatory measures from Canada and China have only added to the uncertainty, sending shockwaves through financial markets worldwide.

The FTSE 100, London’s blue-chip index, fell by 1.3%, marking its steepest decline since October last year. Across the Atlantic, Wall Street saw significant losses, with the S&P 500 dropping 1.6% and the Dow Jones Industrial Average falling 1.7%. European markets were not spared, as Germany’s DAX and France’s CAC 40 plunged by 3.5% and 2.1%.

Investors are increasingly concerned about the long-term implications of these tariffs. The measures threaten to disrupt global supply chains, inflate costs, and dampen economic growth. Analysts warn that prolonged trade tensions could push the global economy closer to a recession.

The tariffs have also had a notable impact on currency markets. The U.S. dollar weakened against major currencies, with the pound rising to a six-week high of $1.27. Meanwhile, safe-haven assets like gold saw a surge in demand, with prices climbing above $2,900 per ounce.

Oil markets were not immune to the fallout, as Brent crude futures dropped to a three-month low of $70.65 per barrel. The decline reflects growing concerns over reduced demand amid escalating trade tensions.

As the world braces for further economic uncertainty, the focus now shifts to how global leaders will navigate these turbulent waters.

The stakes are high, and the path forward remains uncertain.

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Trump’s tariffs tumble markets!

Stocks go red!

Trump’s tariffs have created fresh concern and new volatility in the markets forcing a stock market reversal.

The tariffs, which include a 25% duty on imports from Mexico and Canada, as well as a 10% levy on Chinese goods, have led to significant market volatility.

Investors remain cautious as they assess the long-term implications of these trade restrictions. The tariffs are expected to raise inflation in the U.S. and could potentially lead to a severe market correction.

It’s a complex situation with far-reaching consequences for global trade and the economy.

The S&P 500 retreated on Monday, extending February’s rout and turning red for the year after President Donald Trump’s confirmation of forthcoming tariffs.

The S&P 500 index fell to end at 5849, marking its worst day since December 2024 and bringing its year-to-date performance to a loss of about 0.5%.

The Dow Jones Industrial Average dropped 649 points to finish at 43191. The Nasdaq Composite slid to close at 18350, weighed down by Nvidia’s decline of more than 8%.

Stocks took a notable leg down in the afternoon following President Trump’s reiteration that 25% levies on imports from Mexico and Canada would go into effect on Tuesday 5th March 2025, dashing investors’ hopes of a last-minute deal to avert the full tariffs on the two U.S. allies.

All three indexes traded in positive territory earlier in the day, with the Dow rising nearly 200 points at session highs.

China retaliated with reciprocal tariffs of 15% on some U.S. goods due to take effect 10th. March 2025.

Is the world order being dramatically upended?

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China’s AI vs U.S. AI – competition heats up – and that’s good for business – isn’t it?

DeepSeek AI

The escalating AI competition between the U.S. and China has taken a new turn with the emergence of DeepSeek, a Chinese AI startup that has introduced a low-cost AI model capable of rivaling the performance of OpenAI’s models.

This development has significant implications for data centres and the broader technology sector.

The rise of DeepSeek

DeepSeek’s recent breakthrough involves the development of two AI models, V3 and R1, which have been created at a fraction of the cost compared to their Western counterparts.

The total training cost for these models is estimated at around $6 million, significantly lower than the billions spent by major U.S. tech firms. This has challenged the prevailing assumption that developing large AI models requires massive financial investments and access to cutting-edge hardware.

Impact on data centres

The introduction of cost-effective AI models like those developed by DeepSeek could lead to a shift in how data centers operate.

Traditional AI models require substantial computational power and energy, leading to high operational costs for data centers. DeepSeek’s models, which are less energy-intensive, could reduce these costs and make AI technology more accessible to a wider range of businesses and organizations.

Technological advancements

DeepSeek’s success also highlights the potential for innovation in AI without relying on the most advanced hardware.

This could encourage other companies to explore alternative approaches to AI development, fostering a more diverse and competitive landscape. Additionally, the open-source nature of DeepSeek’s models promotes collaborative innovation, allowing developers worldwide to customise and improve upon these models2.

Competitive dynamics

The competition between DeepSeek and OpenAI underscores the broader U.S.-China rivalry in the AI space. While DeepSeek’s models pose a limited immediate threat to well-funded U.S. AI labs, they demonstrate China’s growing capabilities in AI innovation.

This competition could drive both countries to invest more in AI research and development, leading to faster technological advancements and more robust AI applications.

Broader implications

The rise of DeepSeek and similar Chinese and other AI startups could have far-reaching implications for the global technology sector.

As AI becomes increasingly integrated into various industries, the ability to develop and deploy AI models efficiently will be crucial.

Data centres will need to adapt to these changes, potentially investing in more energy-efficient infrastructure and exploring new ways to support AI workloads.

Where from here?

DeepSeek’s emergence as a significant player in the AI race highlights the dynamic nature of technological competition between the U.S. and China.

While the immediate impact on data centres and technology may be limited, the long-term implications could be profound.

As AI continues to evolve, the ability to innovate cost-effectively and collaborate across borders will be key to driving progress and maintaining competitiveness in the global technology landscape.

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Chinese tech giant Baidu to release next-generation AI model soon as DeepSeek leads Chinese AI tech

AI

China’s Baidu reportedly plans to release the next generation of its artificial intelligence model in the second half of this year, according to information recently reported.

The planned update comes as Chinese companies race to develop innovative AI models to compete with OpenAI and other U.S. based companies.

Baidu was the first major Chinese tech company to roll out a ChatGPT-like chatbot called Ernie in March 2023.

However, despite initial momentum, the product has since been eclipsed by other Chinese chatbots from large tech companies such as Alibaba and ByteDance, as well as startups.

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Apple and Google shares fall after China reportedly launches probes into Apple App Store practices and Google’s anti-trust issues

Google and Apple probed

China Launches Probes into Google and Apple Over Antitrust Concerns

China has recently initiated investigations into both Google and Apple, raising concerns over potential antitrust violations.

The State Administration for Market Regulation (SAMR) is considering whether to formally investigate Apple’s App Store practices, particularly focusing on the fees Apple charges and its policies that block third-party payment providers. This move has already caused Apple’s shares to fall.

In addition to the probe into Apple, China has also opened a separate investigation into Google, although details about the focus of this investigation have not been disclosed. These probes come at a time when trade tensions between the U.S. and China are escalating under President Donald Trump’s administration.

Apple’s app store under scrutiny

Apple’s App Store has been under scrutiny globally, with regulators in Europe recently forcing the company to open up its App Store under the Digital Markets Act, allowing non-Apple companies to offer app stores and app developers to use third-party payment systems.

If the China probe goes ahead, it would pose further challenges for Apple in one of its largest markets, where it is already facing stiff competition from local companies such as Huawei.

Google

Google, on the other hand, has not yet commented on the specifics of the investigation, but the move highlights the increasing regulatory pressures faced by U.S. tech giants in China.

Both companies will need to navigate these investigations carefully as they continue to operate in a highly competitive and regulated environment.

The outcome of these probes could have significant implications for the tech industry, potentially leading to changes in how these companies operate in China and other markets.

As the investigations unfold, the world will be watching closely to see how Google and Apple respond to these regulatory challenges.

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Tariff Man – Trumps tariffs take affect – markets fall!

U.S. Tariffs

U.S. President Donald Trump’s tariffs have moved from threat to reality.

U.S. President Donald Trump launched a series of tariffs on Saturday. U.S. imports from Mexico and Canada will face a 25% duty, while those from China will be subject to a 10% tariff. Energy resources from Canada will face a lower 10% tariff.

Canada’s Prime Minister Justin Trudeau announced on the same day retaliatory tariffs of 25% against $155 billion in U.S. goods. Industry leaders in the U.S. have expressed concern over those tariffs.

They cap off a wild start to the new year during which a new U.S. president entered the White House and a new Chinese artificial intelligence player, DeepSeek upended the industry.

Indices at new highs

Something else that was new in January: the highest-ever closing level for the S&P 500, Dow Jones and new FTSE 100 highs were enjoyed too.

With tariffs now in effect and the possibility of a trade war looming markets may struggle to new heights in the short term.

Even Big Tech earnings and the jobs numbers coming out this week, typically market-moving reports, are likely to play second fiddle to policy developments.

Markets react

Markets are already responding to the news. Prices of oil and gold, which typically rise during periods of volatility, have increased, but Bitcoin is trading lower. It remains uncertain whether these will be a temporary shock or a sustained trend.

China’s factory activity experienced slower growth in January 2025 compared to December 2024 and is expected to be adversely affected as U.S. companies seek to reduce their dependence on Chinese imports.

Trump’s current tariffs may be targeted, but it’s hard to see any country or sector escaping the tariff turmoil.

The EU is also in line for a tariff attack and maybe the UK after.

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Is Nvidia share price at risk as DeepSeek creates an alternative lower cost AI direction?

China and U.S. AI

Nvidia’s share price has been on a rollercoaster ride recently. After experiencing a significant drop due to concerns over the Chinese startup DeepSeek’s AI models, Nvidia’s stock saw a sharp recovery.

On Tuesday 28th January 2025 Nvidia shares ended 8.82% higher at $128.86 on Nasdaq, following a 17% drop the previous day.

However, there are mixed opinions about the potential for more downside. Some analysts believe that Nvidia’s stock still looks weak on the technical charts and may face further declines.

Some analysts suggest that Nvidia shares may trade in the range of $105 to $135 and recommend a ‘sell on rise’ strategy. Some also pointed out signs of technical deterioration, suggesting that Nvidia’s stock may be entering an intermediate-term corrective phase.

On the other hand, some investors are optimistic about Nvidia’s long-term growth prospects, especially with its strong fundamentals and continued advancements in AI technology.

The market remains dynamic, and the stock’s performance will likely depend on various factors, including broader market trends and developments in the AI industry.

Nvidia meteoric will likely change dramatically when face with an alternative AI chip manufacturer.

Doubt cast

DeepSeek, has made significant advancements in AI technology. There are claims and speculations that DeepSeek may have used some U.S. technology to enhance its capabilities.

For instance, it was reported that DeepSeek acquired a substantial number of Nvidia’s high-performance A100 graphics processor chips before the U.S. imposed restrictions on their sales to China. Additionally, there have been allegations that DeepSeek copied some technology developed by U.S. rival OpenAI.

However, these are unfounded claims and it’s important to point out that DeepSeek has also been praised for its innovation and efficiency, developing AI models at a fraction of the cost compared to leading U.S. tech companies.

This may even aid Nvidia as it could drive the cost of AI down bringing it to a wider audience more quickly thus enhancing Nvidia’s future sales.

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The aftermath from the arrival of Deepseek

Deepseek AI

Nvidia, the renowned American technology company, recently experienced the largest one-day loss in U.S. history. On January 27, 2025, Nvidia’s stock plummeted by 17%, resulting in a staggering market cap loss of nearly $600 billion.

This unprecedented drop was primarily triggered by the emergence of DeepSeek, a Chinese artificial intelligence startup that has been making waves in the tech industry.

DeepSeek, founded in 2023 by Liang Wenfeng, has developed open-source large language models that rival some of the best AI models in the world. The company’s latest model, DeepSeek-V3, has demonstrated impressive performance at a fraction of the cost of its competitors.

This has raised concerns among investors about the sustainability of Nvidia’s dominance in the AI chip market.

The release of DeepSeek’s latest technology has caused significant anxiety among U.S. tech giants, leading to a massive sell-off in the stock market. Companies that rely heavily on Nvidia’s GPUs, such as Dell, Oracle, and Super Micro Computer, also saw their stock prices plummet.

The ripple effect of Nvidia’s loss was felt across the tech-heavy Nasdaq, which dropped by 3.1% on the same day.

Nvidia one-month chart 27th January 2025

In response to this market upheaval, former President Donald Trump commented on the situation, stating that DeepSeek’s emergence should serve as a ‘wake-up call’ for American companies.

Trump emphasised the need for U.S. industries to remain competitive and innovative in the face of rising competition from Chinese tech firms. He acknowledged the impressive advancements made by DeepSeek and suggested that American companies could benefit from adopting more cost-effective methods in their AI development.

Trump’s remarks highlight the growing concern among U.S. policymakers and industry leaders about the rapid advancements in AI technology coming from China.

The success of DeepSeek has demonstrated that significant breakthroughs can be achieved with relatively modest investments, challenging the notion that massive capital expenditure is necessary for top-tier AI performance.

As the AI race continues to heat up, it is clear that companies like Nvidia will need to adapt and innovate to maintain their competitive edge. The emergence of DeepSeek has not only disrupted the market but also underscored the importance of staying ahead in the rapidly evolving field of artificial intelligence.

For American tech giants, this wake-up call serves as a reminder that the global AI landscape is becoming increasingly competitive, and complacency is not an option.

Has the U.S. spent wisely on AI development?

The emergence of DeepSeek has indeed raised questions about the spending strategies of U.S. tech companies on AI development. DeepSeek’s ability to develop high-performing AI models at a fraction of the cost has led to concerns about the necessity of the massive capital expenditures by large U.S. tech firms.

For instance, companies like Microsoft, Alphabet, Meta, and Amazon have collectively spent over $1 trillion on AI investments in recent years. This significant spending has been driven by the belief that larger models and more computing power would lead to better performance.

However, DeepSeek’s success with more cost-effective methods challenges this notion and suggests that efficient innovation might be more important than sheer scale.

The impressive performance and lower costs of DeepSeek’s models have prompted some analysts to question whether the billions of dollars spent by U.S. tech companies on AI development are justified. This has led to a re-evaluation of AI spending strategies and a push for more efficient and innovative approaches to AI development.

In summary, while U.S. tech companies have invested heavily in AI, the success of DeepSeek highlights the potential for achieving cutting-edge results with fewer resources. This has sparked a broader discussion about the most effective and efficient ways to advance AI technology.

Asking ChatGPT – ‘Do you see Deepseek as a competitor or a threat?’

The reply:

As an AI, I don’t have personal opinions or feelings. However, I can share that DeepSeek’s rapid rise and impressive performance in the AI field are noteworthy. Their ability to develop high-performing models at a lower cost is a significant achievement and has certainly shaken up the industry. It’s a reminder of the dynamic and competitive nature of the AI landscape, where innovation can come from unexpected places.

Asking ChatGPT – ‘What do you think of Deepseek?’

The reply:

DeepSeek is a fascinating and disruptive player in the AI landscape. Founded in 2023 by Liang Wenfeng, this Chinese startup has quickly gained attention for its open-source large language models, which rival some of the best AI models in the world at a fraction of the cost. Their latest models, DeepSeek-V3 and DeepSeek-R1, have demonstrated impressive performance and efficiency, challenging the dominance of established tech giants2.

DeepSeek’s emergence has caused significant market upheaval, leading to substantial drops in the stock prices of major AI-related firms, including Nvidia. The company’s success highlights the potential for innovation and cost-effectiveness in AI development, which has prompted industry leaders and policymakers to re-evaluate their strategies.

Overall, DeepSeek’s rapid rise and impact on the AI industry underscore the importance of staying competitive and innovative in this fast-evolving field. It’s a reminder that breakthroughs can come from unexpected places and that the AI landscape is becoming increasingly dynamic and competitive.

It would not be drawn on these questions but, one thing is for sure the U.S. has spent billions developing their systems and charge fortunes for using it.

This is about to change.

And further…

The Deepseek website reportedly crashed on 27th January 2025 due to heavy global demand. There were also reports of unrelenting cyberattacks on its systems…?

Curious. From minnow to centre stage in just one day!

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China’s DeepSeek low-cost challenger to AI rattles tech U.S. markets

China Deepseek AI

U.S. technology stocks plunged as Chinese startup DeepSeek sparked concerns over competitiveness in AI and America’s lead in the sector, triggering a global sell-off

DeepSeek launched a free, open-source large-language model in late December 2024, claiming it was developed in just two months at a cost of under $6 million.

The developments have stoked concerns about the large amounts of money big tech companies have been investing in AI models and data centres.

DeepSeek is a Chinese artificial intelligence startup that has recently gained significant attention in the AI world. Founded in 2023 by Liang Wenfeng, DeepSeek develops open-source large language models. The company is funded by High-Flyer, a hedge fund also founded by Wenfeng.

The AI models from DeepSeek have demonstrated impressive performance, rivaling some of the best chatbots in the world at a fraction of the cost. This has caused quite a stir in the tech industry, leading to significant drops in the stock prices of major AI-related firms.

The company’s latest model, DeepSeek-V3, is known for its efficiency and high performance across various benchmarks.

DeepSeek’s emergence challenges the notion that massive capital expenditure is necessary to achieve top-tier AI performance.

The company’s success has led to a re-evaluation of the AI market and has put pressure on other tech giants to innovate and reduce costs.

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China’s fourth-quarter GDP grows at 5.4%

China GDP

China’s economy expanded by 5.4% in the fourth quarter, surpassing market expectations, as a series of stimulus measures propelled the economy to meet Beijing’s growth target

This final-quarter surge helped elevate China’s full-year GDP growth to 5.0% in 2024, with the official target of around 5%.

In December 2024, retail sales increased by 3.7% from the previous year, exceeding forecasts of around 3.5%. Industrial output reportedly grew by 6.2% compared to previous year, surpassing expectations of 5.4%.

Contrast these figures to the UK’s quite pathetic 0.1% growth recently announced.

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China’s electric vehicle boom is becoming increasingly focused on hybrids

Hybrid vehicle

Hybrid-powered vehicles are becoming more popular than battery-only ones in China, according to latest full-year reports, even as consumers move away from fossil-fuel-only cars.

Market leader BYD reported that well over half of the 4.3 million passenger cars it sold in 2024 were hybrid-powered, marking a significant reversal from 2023.

Chinese electric car start-ups that have exclusively sold battery-powered vehicles generally delivered fewer cars in 2024 compared companies that also offered hybrid models.

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China initiates investigation into Nvidia as the microchip battle rumbles on

Tech tug 'o' war

China has reportedly initiated a probe into Nvidia, the US computer chip manufacturer, over purported breaches of anti-monopoly regulations.

The company’s shares fell by over 3% following the announcement, signalling the latest development in the ongoing tech conflict between the U.S. and China over the profitable semiconductor market.

Over recent weeks, the U.S. imposed stricter restrictions on the sale of certain exports to Chinese firms, and the dispute over the industry is anticipated to persist as Donald Trump returns to the White House.

Established in 1993, the company initially gained recognition for producing computer chips designed to process graphics, especially for video games.

Today, the tech giant leads in developing chips that drive artificial intelligence (AI), boasting a market value exceeding $3 trillion.

Its increasing control over the market has drawn scrutiny from competition regulators in the U.S. and internationally. Recently, the firm confirmed that it had been approached by regulatory bodies globally, including those in the U.S., UK, European Union, South Korea, and China.

The business finds itself at the centre of escalating geopolitical and economic tensions between the U.S. and China, with both nations vying for supremacy in advanced chip technology.

Nvidia disclosed last month that sales to China, including Hong Kong, represented approximately 13% of this year’s revenue to date.

However, this figure has declined following Americas enhancement of restrictions on sophisticated technology exports to Chinese companies, citing national security concerns. Chinese state media reported that Beijing had initiated an investigation.

The inquiry alleges that Nvidia breached commitments established during its 2020 acquisition of Mellanox Technologies, a smaller entity.

This development follows the U.S.’s recent intensification of restrictions, affecting sales to 140 entities, including Chinese chip companies such as Piotech and SiCarrier, barring special authorisation.

In retaliation, China reportedly imposed stringent new regulations on the export of crucial minerals to the U.S., such as antimony, gallium, and germanium. Observers have highlighted the significance of these measures, noting they specifically target the U.S rather than imposing general restrictions.

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Mega port opens in Latin America to Chinese fanfare

Container port

The inauguration of Chancay Port in Peru represents a significant development in China-Peru relations and is set to revolutionise trade facilities within Latin America.

This $3.5 billion mega port, opened by Chinese President Xi Jinping and Peruvian President Dina Boluarte, is a component of China’s Belt and Road Initiative (BRI) and seeks to improve connectivity between South America and Asia.

Located about 80 kilometres north of Lima, the deep-water port is anticipated to emerge as a significant trade hub, especially for commerce with China. Boasting a draft depth of 17.8 metres, the Chancay port is capable of hosting the largest container ships in the world, which is expected to considerably cut down shipping durations and logistical expenses.

The port has the potential to process over 1 million TEUs (twenty-foot equivalent units) each year, enhancing Peru’s position as a key logistical centre in the region.

Job creation

The Chancay Port is expected to generate over 8,000 jobs in the coming decade, aiding in the export of minerals such as lithium and copper from Chile and Peru. It will also facilitate the import of Asian electronics, textiles, and other consumer goods, further connecting Latin American markets with Asia.

Peruvian authorities see the port as a move towards transforming Peru into the ‘Singapore of Latin America’, boosting its role as a global trade centre.

The Chancay Port aims to rival other significant ports in the area, like Mexico’s Port of Manzanillo and California’s Long Beach, by offering direct routes to Asia and cutting shipping times by as much as 20 days.

Expansion

This progress highlights China’s expanding role in Latin America and its dedication to strengthening economic relationships within the region. The Chancay Port represents not only a conduit for commerce but also a sign of the increasingly close partnership between China and Latin America.

President Xi Jinping himself attended the inauguration of the Chancay port, an indication of just how seriously China takes the development.

There is a strong perception that the U.S. is losing ground in Latin America as China forges ahead with its Belt and Road Initiative (BRI).

The deep-water port also potentially carries military implications for the U.S. too.

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Exports for China in October 2024 up sharply beating expectations

Exports

China exports reportedly rose by 12.7% year on year to $309.06 billion in October 2024 – the highest jump since March 2023 when they rose 14.8% according to recent data reports.

Imports, however, declined by a more-than-expected 2.3% in October, according to customs data.

The world’s second-largest economy is facing challenges with weakening domestic consumption and an ongoing property crisis, with exports emerging as a bright spot.

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China’s manufacturing output expands in October 2024 according to survey

Exports China

China’s factory activity jumped back into expansion among smaller manufacturers in October 2024, according to a private survey report released on Friday 1st November 2024.

In October 2024, the Caixin/S&P Global manufacturing purchasing managers’ index reached 50.3, surpassing the prediction of 49.7.

The index stood at 49.3 in September 2024, 50.4 in August, and 49.8 in July. A PMI figure above 50 signifies an expansion in activity, whereas one below 50 suggests a contraction.

Following the release of the official PMI data on Thursday 31st October 2024, which showed the first expansion in the country’s manufacturing activity since April 2024, the Caixin measure, which typically reflects the performance of exporters and private sector firms, contrasts with the official PMI that includes larger and state-owned enterprises.

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Apple smartphones return to top 5 rank in China following iPhone 16 release

Apple smartphones

Apple has returned to the top five smartphone vendors in China’s market during the third quarter, lifted by the release of the iPhone 16, according to data.

Apple’s shipment growth remained steady year-on-year in the Q2, securing the company a second-place rank by market share in Q3.

Following Apple, Huawei held the third position with a 15.3% market share, as per reported data. Despite this, Huawei’s smartphone shipments in China saw a significant increase of 42% year-on-year.

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China’s industrial profits have plummeted at the sharpest rate since the pandemic

Factory workers

In September 2024, China’s industrial profits fell at the fastest rate since the pandemic of 2020 began, according to China’s National Bureau of Statistics

Following a 17.8% decrease in August 2024, profits in September 2024 plummeted by 27.1% from the previous year, reportedly the most significant drop since the 34.9% decline in March 2020, according to analysis.

In response, Chinese officials have intensified efforts to stimulate growth.

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IMF cuts China’s growth as property market concerns grow

China growth at risk

The International Monetary Fund (IMF) has issued a warning about the potential decline of China’s property market while reducing its growth forecast for the world’s second-largest economy.

In a report published Tuesday, The IMF has reduced its growth forecast for China this year to 4.8%, which is 0.2 percentage points below its July projection. For 2025, the IMF reportedly anticipates growth to be at 4.5%.

The IMF has pointed out that the unexpected contraction of China’s property sector is among several factors posing risks to the global economic outlook.

‘The real estate market could face worsening conditions, potentially leading to further price declines amid a drop in sales and investment’, the report indicated.

The report referenced past property crises in countries such as Japan in the 1990s and the U.S. in 2008, suggesting that if China’s situation is not managed, property prices may fall even more.

According to the IMF‘s World Economic Outlook, this could undermine consumer confidence, leading to lower household spending and domestic demand.

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China cuts lending rates by 0.25%

China cuts interest rates

China on Monday 21st October 2024 lowered its main benchmark lending rates by 0.25%

The People’s Bank of China (PBOC) has announced a reduction in the one-year loan prime rate (LPR) to 3.1% and the five-year LPR to 3.6%.

The one-year LPR affects corporate and most household loans in China, whereas the five-year LPR is a reference for mortgage rates.

This adjustment was anticipated. The governor of China’s central bank reportedly on Friday 18th October 2024 hinted at a forum in Beijing that the loan prime benchmark rates would decrease by 0.20% to 0.25%.

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China reports GDP growth of 4.6% – above expectations

China data screen

China’s National Bureau of Statistics announced on Friday that the GDP growth for the third quarter was 4.6% year-on-year, marginally above the 4.5% forecasted by economists. But slightly lower than the second quarter’s year-on-year growth of 4.7%.

In terms of quarterly growth, the third quarter experienced a 0.9% increase, which is higher than the 0.7% seen in the previous quarter.

Additional data released on Friday 18th October 2024, including retail sales and industrial production, also exceeded expectations, indicating a positive outlook for the world’s second-largest economy.

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China stocks drop after trade data disappoints Hang Seng falling 4%

China stocks drop

Chinese stocks declined on Tuesday 15th October 2024, contrasting with the broader gains in other Asia markets, which followed record highs reached by the Dow Jones Industrial Average and the S&P 500 on Wall Street

The CSI 300 index in Mainland China fell to close at 3,855.99, and the Hang Seng index in Hong Kong decreased by 3.67% to finish at 20,318.79.

After the markets closed on Monday 14th October 2024, China reported disappointing trade figures for September 2024, with exports increasing by only 2.4% from the previous year and imports rising a mere 0.3%, both significantly below expectations.

China CSI 300 index one-day chart

China CSI 300 index one-day chart as of 15th October 2024
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China’s PPI deflation deepens in September 2024

Economic data China

In September 2024, China witnessed a decline in consumer inflation rates and an intensification of producer price deflation, despite efforts to implement additional stimulus measures aimed at reviving weak demand and stabilizing economic activity

The consumer price index (CPI) rose by 0.4% from the previous year, a slowdown from the 0.6% increase observed in August, as reported by the National Bureau of Statistics (NBS) on Sunday 13th October 2024. This increase was below the 0.6% rise economists had forecasted.

Month-on-month, the CPI remained unchanged, contrasting with the 0.4% increase in August and missing the expected 0.4% rise.

The producer price index (PPI) registered a year-on-year fall of 2.8% in September 2024, a sharper decline than the 1.8% decrease in the previous month and exceeding the 2.5% drop projected by analysts.

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China’s exports and imports came in less than expected in September 2024 – missing targets

China exports and imports

China’s exports increased by 2.4% in September 2024 compared to the previous year when measured in U.S. dollars, and imports saw a rise of 0.3%, customs data showed Monday 14th October 2024

The figures fell short of expectations. China’s exports were predicted to rise by 6% year-on-year in September 2024, measured in U.S. dollars, as per reported analysts’ data. This increase would be less than the 8.7% rise seen in August 2024.

Imports were also projected to grow by 0.9% in September from the previous year, based on analysts’ data, which would be a slight uptick from the 0.5% growth in August 2024.

Exports have been a highlight for China’s economy amidst subdued consumer spending and a downturn in real estate.

According to reported analysis of the official data, China’s exports to the U.S., its biggest trading partner, went up by 2.2% in September year-on-year, while imports from the U.S. saw a 6.7% increase.

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Chinese stocks tumble amid stimulus benefit scepticism

China stocks drop

On Wednesday 9th October 2024, Chinese stocks experienced a sharp decline, with the Shanghai benchmark plummeting by 6.6%

Hong Kong’s index fell by 1.5%, in contrast to the mostly positive performance of other global markets.

Beijing’s recently detailed economic stimulus plans did not meet the high expectations set after the central bank and other agencies announced measures aimed at revitalising the struggling property sector and accelerating economic growth.

The Shanghai Composite Index fell 6.6% reversing a 4.6% gain from Tuesday 8th October 2024 when it re-opened following a weeklong national holiday.

The CSI 300 Index, which follows the top 300 stocks in the Shanghai and Shenzhen exchanges, relinquished 7.1% – ending a 10-day winning streak.

In Shenzhen’s smaller market, the benchmark tumbled by 8.7%.

The Hang Seng index in Hong Kong dropped 1.5% – and this coming after a steep decline of over 9% the previous day.