China’s 12-month Deceleration of Outbound Energy Consumption Revealed by the First Coronaviruses Outbreak

Just 12 months ago, China’s economy was growing too fast for its energy sector to keep up. Blackouts darkened vast factory districts. Office high-rises were evacuated minutes before they lost electricity for elevators. The water systems were without power.

The deceleration in China will have a dire impact globally. The world’s second largest economy weakened dramatically in 2022 because of its rigid zero-Covid policy, which left China out of sync with the rest of the world, disrupting supply chains and damaging the flow of trade and investment.

China is importing two million barrels of oil a day less than expected in August, and one sixth less natural gas than a year earlier, as the economy skids.

The sharp decline in demand by China, the world’s second-largest economy, is helping slow price rises sparked by Russian’s invasion of Ukraine. China’s slump in energy consumption is also offering an unintended assist to the U.S.-led efforts to choke off the enormous revenues Russia reaps as an energy exporter.

October’s decline of 0.3% was more than the 8.7% contraction that China’s outbound shipments experienced last month. That performance was the worst since February 2020, when the Chinese economy went to a standstill due to the first coronaviruses outbreak.

Outbound shipments in October shrank 0.3% from a year earlier, a sharp turnaround from a 5.7% gain in September, official data showed on Monday, and well below analysts’ expectations for a 4.3% increase. It was the worst performance since May 2020.

China’s Censorship Crisis in the Light of COVID-19 and Persistent Property Weakness: Implications for China

The data suggests demand remains frail overall, heaping more pressure on the country’s manufacturing sector and threatening any meaningful economic revival in the face of persistent COVID-19 curbs, protracted property weakness and global recession risks.

Chinese exporters weren’t even able to capitalize on a further weakening in the yuan currency and the key year-end shopping season, underlining the broadening strains for consumers and businesses worldwide.

Weak external trade is what it is. Last week, customs data showed the country’s exports contracted 8.7% in November from a year ago, the worst performance since February 2020. Most economists had expected that figure to be much higher.

The production of the high-end iPhones is expected to be lower due to a key cut at the plant in China.

We think that exports will fall in the coming quarters. The shift in global consumption patterns that pushed up demand for consumer goods during the PAIN will probably continue, said Zivchun Huang, economist at Capital Economics.

“We think that aggressive financial tightening and the drag on real incomes from high inflation will push the global economy into a recession next year.”

China stuck to its zero-tolerance approach to the viruses for nearly three years, which caused great economic damage and widespread frustration. Company profits plummeted and youth unemployment went to record levels.

Feeble October factory and trade figures suggested the world’s second-biggest economy is struggling to get out of the mire in the last quarter of 2022, after it reported a faster-than-anticipated rebound in the third quarter.

Chinese policymakers pledged last week to prioritize economic growth and press on with reforms, easing fears that ideology could take precedence as President Xi Jinping began a new leadership term and disruptive lockdowns continued with no clear exit strategy in sight.

The recovery of China’s Covid ravaged real estate sector reflects a sharp decline in the overall trade deficit over the last three months

The overall trade figure resulted in a slightly broader trade surplus of $85.15 billion, compared with the previous September figure of 84.74 billion.

The recovery will go through rough patches, despite Beijing abandoning Covid restrictions in the early weeks of December.

The indicators pointed to the fact that economic activity slowed last month. According to the National Bureau of Statistics, retail sales decreased by 5.9% in November. Retail spending was the worst it has been since May when Covids wreaked havoc on the economy.

China’s haphazard reopening isn’t the only factor dragging on the economy. In 2023, experts will continue to watch how policymakers attempt to fix the country’s ailing real estate sector, which accounts for nearly 30% of its GDP.

Fu Jiaqi, a Statistician at the National Bureau of Statistics said in a statement on Thursday that Covid outbreak in November resulted in residents cutting travel and staying at home, which had a significant impact on consumption.

He noted that consumption activities involving personal interaction, for example travel or dining, were greatly affected. The Catering sector revenues fell last month.

Sales of big-ticket items — such as cars, furniture, and high-end consumer electronics — also contracted sharply, as consumers were wary of spending amid worries about a weak economy. Spending on household appliances and telecoms devices plunged more than 17%. Car sales were down over 4%.

The First Year of China Reopening: Implications for the Development of the Second-largest Economic Region and for the Future Growth of the World Economy

The Central Committee of the Communist Party and the State Council, two of the country’s top governing bodies, have issued a plan to expand domestic demand and invest until the 20th century. Some of the rising risks are global economic and geopolitical uncertainties.

Beijing’s recent pivot from its stringent zero-Covid strategy — which had long choked businesses — is expected to inject vitality into the world’s second-largest economy next year.

China reopening could provide a much needed boost to the global economy, which is facing significant challenges such as energy shortages and slowing growth.

But the process of reopening is likely to be erratic and painful, according to economists, with the country’s economy in for a bumpy ride in the first few months of 2023.

The abruptness of the easing of restrictions has left the public unprepared, leaving them to largely fend for their own.

“In the initial phase, I believe the reopening may unleash a wave of Covid cases that could overwhelm the health care system, dampening consumption and production in the process,” Zhuang said.

Already, the rapid spread of infection has driven many people indoors and emptied shops and restaurants. Factories and companies have also been forced to shut or cut production because more workers are getting sick.

The economy is expected to recover after March. HSBC economists projected a contraction of 0.5% in the first quarter but 5% growth over the rest of the year.

The Rise and Fall of the China Real Estate Industry: The Times of Xi Jinping’s Decelerating Exit from Zero-Covid

Construction of pre-sold homes has been held up and delayed because of the crisis in the industry. That caused a rare protest this year by homebuyers who refused to pay loans on unfinished homes.

While Beijing has made a series of attempts to rescue the sector — including unveiling a 16-point plan last month to ease the credit crunch — statistics still paint a gloomy picture.

At a key policy meeting earlier this month, top leaders vowed to focus on boosting the economy next year, suggesting they would roll out new measures that improve the financial condition of the property sector and boost market confidence.

The measures that have been announced so far are not sufficient to drive a turn around, according to analysts from Capital Economics.

But in recent months, the trade sector — which makes up around a fifth of China’s GDP and supplies 180 million jobs — has started showing cracks from a global economic slowdown.

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After a tumultuous end to a momentous and challenging year, China heads into 2023 with a great deal of uncertainty – and potentially a glimpse of light at the end of the pandemic tunnel.

The chaos unleashed by leader Xi Jinping’s abrupt and ill-prepared exit from zero-Covid is spilling over into the new year, as large swathes of the country face an unprecedented Covid wave.

In his nationally televised New Year’s Eve speech, President XI said that the Covid response has entered a new phase. Everyone is holding onto hope, and the light is in front of us. We should make an effort to pull through as perseverance and solidarity mean victory.

Intl-HNK-MIC in China: After Xi’s inauguration and his presidency, the country’s health system is struggling

Some countries have offered a warm welcome back, with foreign embassies and tourism departments posting invitations to Chinese travelers on Chinese social media sites. But others are more cautious, with many countries imposing new testing requirements for travelers coming from China and its territories.

After securing a third term as president of the country, Xi signaled that he hopes to mend relations with the west, but his nationalist agenda and friendship with Russia will likely complicate things.

The lifting of restrictions caused an explosion of cases and a lack of preparation to deal with the surge of patients and deaths.

Doctors are stretched to the limit and hospitals are overwhelmed, as the country’s health system tries to cope with an influx of bodies.

The experts warn the worst is yet to come. While major cities like Beijing may have seen their peak, smaller cities and rural areas are still bracing for more infections.

The outlook doesn’t look good. Some studies estimate the death toll could be in excess of a million, if China fails to roll out booster shots and antiviral drugs fast enough.

The government has launched a booster campaign for the elderly, but many remain reluctant to take it due to concerns about side effects. Fighting vaccine hesitancy will require significant time and effort, when the country’s medical workers are already stretched thin.

Source: https://www.cnn.com/2023/01/02/china/china-2023-lookahead-intl-hnk-mic/index.html

What do Chinese people want from the new world? And what does China want in the next few years of China’s relations with the West?

Any uptick in China’s growth will provide a vital boost to economies that rely on Chinese demand. There will be more international travel and production. There will be upward pressure on global inflation due to rising demand and energy and raw materials prices.

In spite of the uncertainty, Chinese people are rejoicing at the partial reopening of the border after the end of the international arrivals period.

Even though some people voiced their concern online, many of them are planning trips abroad, travel websites recorded massive spikes in traffic within minutes of the announcement.

Several Chinese people overseas told CNN they had been unable to return home for a few years due to the long-term travel ban. Huge life moments were missed and spent apart from: graduations, weddings, births, deaths.

China’s ties with the West and many of its neighbors plummeted significantly over the origins of the coronavirus, trade, territorial claims, Beijing’s human rights record and its close partnership with Russia despite the devastating war in Ukraine.

The lack of top-level face-to-face diplomacy certainly didn’t help, neither did the freeze on in-person exchanges among policy advisers, business groups and the wider public.

The communication lines are open and the US Secretary of State and the French President are both expected to visit Beijing this year.

In the new year, tensions may again flare over Taiwan, technological containment, as well as China’s support for Russia – which Xi underlined during a virtual meeting with Russian President Vladimir Putin on December 30.

Both leaders agreed on the importance of cementing strategic coordination and injecting stability into the world, according to Chinese state media.

Beijing has long refused to condemn Russia’s invasion of Ukraine, or even refer to it as such. The conflict has been blamed on the US and NATO by the Kremlin, which decried Western sanctions.

But few experts believe China will distance itself from Russia, with several telling CNN the two countries’ mutual reliance and geopolitical alignment remains strong – including their shared vision for a “new world order.”

“(The war) has been a nuisance for China this past year and has affected China’s interest in Europe,” said Yun Sun, director of the China Program at the Washington-based think tank Stimson Center. “But the damage is not significant enough that China will abandon Russia.”

Kristalina Georgieva said that this year is going to be harder on the global economy than we have left behind.

She said the situation in Europe looks more dire than the US’s, due to the war in Ukraine. “Half of the European Union will be in recession,” Georgieva added.

The leader of China said that he expected the country’s economy to have expanded by at least 4.4% last year, much higher than the average predicted by economists but much lower than the 8.4% growth rate seen in 2020.

When I talk to Asian leaders, they always start by asking, “what will happen with China?” Is China going back to higher levels of growth? she said.

The next couple of months will “be tough for China, and the impact on Chinese growth would be negative,” Georgieva said, adding that she expects the country to move gradually to a “higher level of economic performance, and finish the year better off than it is going to start the year.”

Inflation and Artificial Intelligence Threats in the United States, China, and the Middle East, as reported by CNN Business in October 2004

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But perhaps surprisingly, inflation ranks fourth on the list, behind worries about a rogue Russia under the leadership of Vladimir Putin and Xi Jinping’s consolidation of power in China.

Increased use of artificial intelligence technology to wreak havoc on the global economy adds to the fears about the disruption from Russia and China. Eurasia called AI “a gift to autocrats.”

Ian Bremmer is a political scientist and author and he pointed out that the war between Russia and Ukraine may become a bigger problem for the US and Europe.

“Nuclear saber-rattling by Moscow will intensify. The report said that Putin’s threats would become more explicit. It is concerned that the Russians will start cyberattacks on Western firms and governments.

Attempts to disrupt oil lines, American satellites and other infrastructure, as well as attempts to influence and sabotage global elections could be related to that.

It was announced in October that key economic data would not be released by Chinese officials, news that Eurasia said was an ominous sign for global markets.

“China would be unlikely to identify the new variant because of reduced testing and sequencing, to recognize more severe disease due to an overwhelmed health system, and to let news of a more severe variant get out given Xi’s track record on transparency,’ Eurasia said. The world would have no time to prepare for a deadlier virus.

Source: https://www.cnn.com/2023/01/04/investing/premarket-stocks-trading/index.html

The Taxi Driver for the Tik Tok Boom: A Manhattan jury trial of the first 17 years of the FTX (NYSE:BTC) premarket stocks trading

The risk of emerging-market crises is still listed as the fourth greatest risk, even though inflation is listed as the fourth greatest risk.

The phenomenon as the “Tik Tok Boom” is caused by Gen Z’s ability and motivation to organize online, making life harder for multinational companies, and disrupting politics with the click of a button.

The man with the initials SBF pleads not guilty to wire fraud, conspiracy to commit money-laundering and conspiracy to misuse customer funds.

SBF appeared in a Manhattan court Tuesday for the first time since he was arrested in the Caribbean and extradited to the United States. Kara Scannell reported that the legal drama for SBF is just beginning. A trial was set for October 2.

The world of cryptocurrencies was in turmoil just before FTX collapsed. The prices of bitcoin, ethereum and other digital coins all plummeted in 2022. In December, both FTX and Alameda were forced to file for bankruptcy due to investors pulling deposits.

Private investors funded the $32 billion value of FTX. The company was expected to be one of the hottest initial public offerings of the year. Not any more.

Source: https://www.cnn.com/2023/01/04/investing/premarket-stocks-trading/index.html

Apple’s stock and stock declined during a tough 2022 and beyond: results from the first $3 trillion market valuation in a year on average

Last year was a bad one for Apple as it faced production disruptions in China due to the swine flu.

The massive campus owned by Apple supplier Foxconn has returned to its full capacity after worker protests and restrictions.

The new Apple phones, the 14 Pro and 14 Pro Max in the US, were more than a month away due to supply chain issues, according to analysts at the investment bank. It was a bad time since Christmas and other winter holidays were just around the corner.

Apple’s stock had a tough 2022, like the rest of Big Tech, and it didn’t start off 2023 in a festive fashion either. The shares of Apple fell to their lowest point in more than a year. The value of Apple fell below $2 trillion. Just a year ago, Apple was the first company in the world to reach a $3 trillion market valuation.