China: quick economy update

  • The government said Sunday that it’s targeting growth of “around 6.5% or higher if possible” in 2017 vs 6.7% Y-O-Y
  • Substantial stimulus provided by Chinese Govt in terms of public infrastructure spending and increased bank lending.
  • Earlier in August 2016, International Monetary Fund, hd warned China about its high corporate debt levels.
  • China’s debt stands at about 254% of GDP at $25 trillion, (source Bank for International Settlements).
  • Last year, Chinese authorities reported exactly the same economic growth rate for three quarters in a row, unusually consistent for a rapidly expanding economy such as China..
  • The credibility of the official data took a further hit in January when the governor of one of China’s major industrial provinces admitted officials there had been falsely boosting economic data for years.
  • Chinese Government warns of job cuts (500,000 cuts over and above 726,000 cuts in coal and steel sector jobs last year) trying to reduce tens of millions of tons of excess capacity in coal and steel sectors.
  • Urban areas new job creation expectation at: 11 million jobs vs. 13.1 million the government says were created last year
  • Poverty alleviation: 12.4 million people were removed out of poverty last year. Xi Jinping has promised to eradicate poverty in China by 2020, translating to reduction in the number of people in poverty by at least 10 million annually.
  • 10 Year Govt. Bond Yield: China 10Y decreased 0.05 percent or 0.03% to 3.41 on Friday March 3 from 3.21 in the previous trading session. Historically, the China Government Bond 10Y reached an all time high of 4.85 in November of 2013 and a record low of 2.51 in December of 2008.
  • USD vs CNY: 6.89
  • China’s foreign exchange reserves fell by $12.3 billion in January 2017 to $2.998 trillion, vs. a drop of $41 billion in December. It was the seventh straight month of decline and the first time in nearly six years that reserves were below the closely watched $3 trillion level.
  • China’s gold reserves: rose to $71.292 billion at the end of January, from $67.878 billion at end-December.
  • Foreign Exchange Reserves: in China averaged 895550.70 USD Million from 1980 until 2017, reaching an all time high of 3993212.72 USD Million in June of 2014 and a record low of 2262 USD Million in December of 1980.
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