There is a palpable sense of economic slowdown, of no imminent US trade talk breakthroughs, and of continuing overall tightenings. The impending massive purchases by China of US agricultural produce, including soybeans, trumpeted by Trump after the G20 summit have so far not been forthcoming. Various economic data points continue to support a pessimistic outlook. China’s exports and imports both fell in June, with the US trade situation being viewed as a key factor. The GDP number for Q2 is due to be released next Monday, and pundits seem to be betting on 6.2% as the number, after 6.4% for Q1. Both are the lowest in recent history, although of course, if reliable, they are still stellar compared to any other major economies. That number would also fit into the overall official guidelines provided in March, which was a prediction of GDP growth of between 6% and 6.5% for the year. But anecdotally and in terms of announcements and data, it’s getting tougher to do business and make money in China.
In other news, the excellent Caixin had an interesting report on swine flu, which indicated the situation was worse than had previously been disclosed, with under-reporting by local officials leading to a wider spread of the disease that is decimating the country’s pig population, and has implications both for inflation (up in June) and for the basic confidence of Chinese consumers in food safety.
And on Tuesday, Mr. Xi said that Chinese officials must actually work. “Don’t be muddle-headed officials who are politically apathetic and do things half-heartedly; don’t be lazy officials who spend the whole day eating and idle their time away.”
Have a particularly productive weekend.