Spring blossoms are not yet out, although the weather in much of China is weirdly warmish, and with the US-China trade deal due to be signed next week, the Shanghai stock market in relatively rosy territory and the auto market apparently bottoming out after two years of decline, there is some reason to see the coming year in non-dire terms.
Trump said that a second phase of the trade deal would not be concluded until November, which is an age away, and the overall tone of the relationship does not feel like it has changed much. Internationally, Brazil looks like it will go with Huawei for its 5G network in spite of presumably massive pressure from Washington. We await with interest the result of the same pressure on the UK, also heading towards a decision.
Inflation, however, remains high and pork supplies are tight ahead of Chinese New Year. The property market, meanwhile, remains in suspended animation, impacted more than anything by policy rather than market forces.
It’s a market which is fundamental to the economy, and cities have recently been allowed to make their own policies with regard to market regulation – a big shift from the usual one-size fits-all. In response, Tangshan this week announced a ban on the re-sale of newly-bought apartments until 2023.
The ability of Beijing to juggle the balls and spin the plates and keep things stable remains remarkable.
Enjoy the weekend.