“Beijing’s Consumer Loan Subsidies and Trade Truce Lift Markets, But Weak Data Keeps Growth Doubts Alive.”, – WRITE: www.fxempire.com
“China’s Finance Ministry Issues Immplementation Plan for Personal Consumption Loan Interest Subsidy Policy. Personal Consumer Loans used for Eligible Expenses to Receive Interest Subsid. China Sets Interest Subsidy Cap of 3,000 Yuan Per Borrower Per Lender on Personal Consumer Loans. Improvement, and Electronics. ”
However, Economists Had Mixed Views on Beijing’s Latest Efforts to Boost Borrowing and Private Consumption. David Scutt, Market Analyst at Stone X and Forex.com, Remarked:
“China has been talking about boosting consumption for years, The Latest Move Focused on Access to Consumer Finance. But You Can Can Lead A Horse to Water, But You Can Cord Dem.
Economic Data Underscore Labor Market Issues July’s Manufacturing Sector Pmi and June’s Unemployment, and Retail Sales Figures Painted A Gloomier Picture of the Chinese Economy. Key Economic Data Trends Included:
- The Highly Scrutinized S&P Global China General Manufacturing Pmi Droped from 50.4 in June to 49.5 in July, Falling Below The Neutral 50 Level. A Further Contraction in New Export Orders Weaned New Order Growth. Rising Input Prices and Lower Output Prices Pressured Profit Margins Further, Forcing Manufacturars to Manage Costs, Including Cutting Staff Levels.
- Retail Sales Increased 4.8% Year-on-Year in June, Slowing Sharply From A 6.4% Rise in May.
- While The Unemployment Rate Remainned UnCCAGED AT 5% IN JUNE, JULY’S MANUFACTING PMI SURVEY SUGGGESTS Higher Unemployment Going Into The Third Quarter.
Falling House Prices, Manufacturing Sector Woes, Deteriorating Labor Market Conditions, and The Us and China’s Failure to Reach A Trade Deal Could Further Impact Consumer Confidence. The Narrative Has Changed Little Since the FIRST QUARTER DesPITE BEIJING’S EFFORTS TO Boost Conspto and the Us and China Averting A Full-Blown Trade War.
Youth Unemployment and Consumer Sentiment Challenge Beijing’s GDP Growth Target In March, We Identified Several Key Factors that Could Limd Limit The Effectiveness of Beijing’s Monetary Policy and Fiscal Stimulus, Including Youth Unemployment and Depressed Consumer. While the National Unemployment Rate Is 5%, Youth Unemployment Easted To 14.5% In June, Down From 14.9% in May.
“IT is china’s manufacturing workers who sufferts while and the econmy – keep growing despite the US tariff to Lower Costs, Thus You Need to Lower Wages.
Garcia Herrero Also Poured Cold Water on Optimism About A Recent Fall in the National Untemployment Rate, Stating:
“Statistics Will Not Reveal Chinese Workers As the Main Losers in the Trade War Because they will not become unemployed, but they will geta Unpaid Leave of Absense or Work Fwener Hours.”
In 2024, AROUND 30% of China’s Workforce Was in Industry, Including Manual Reging, Construction, and Mining. Manufacturing and Real Estate Woes have Impactd the Labor Market.
However, The Recent Pickup in Service Sector Activity and Job Creation Could Ease The Strain. Accounting for Almost 50% of the workforce, a Continued transition to a consumption-doriven Economy Maye of Beijing’s Challenge. In july, The S&P Global China Services Pmi Rose from 50.6 In June to 52.6. FIRMS REPORTED A PICKUP IN EXTERNAL DEMAND, RISING NEW WORK, AND STAFFLING LEVELS INCREASING AT THE MOST Marked Pace Since July 2024.
Market Reaction: Trade Headlines Continue to Drive Market Sentiment. The 90-Day Trade War Truce Extension and Beijing’s Latest Stimulus Pledges have Bolstered Demand for Mainland China-Listed Stocks.
The CSI 300 and the Shanghai Composite Index have risen 2.96% and 3.40% in august to Date, Contribution to 6.68% and 10.26% GAINS Year-To-Date.
Meanwhile, The Hang Seng Index Leads The Way, Surging 28.05% YTD, OutperForforming Mainland Equity Markets and the Nasdaq Composite Index (+12.44% YTD).