Chinese Economics Thread

[Serb]

The better the economy is doing, both in the short and long terms, the more can be spent on outside investments.

This tells you everything you need to know about the state and level of the Chinese economy currently.

At least in the countries where outflows are as tightly controlled as they are in China, it is a bullish sign.

It is also clear that the Global South is the principal target, so even closer geopolitical alignments from this.

Those are mostly manufacturing and more valuable investments than the US's simple, service-based investments.

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In 2023 alone, Chinese outward direct investment in the Asia-Pacific region surged 37% to nearly US$20 billion. That outflow speaks to how Chinese companies seeking growth abroad are altering financial dynamics from Asia to the West to Latin America.

“China’s ODI has risen substantially since the turn of the millennium,” says Frederic Neumann, chief Asia economist at HSBC. “Only starting to venture out into the international investment landscape in the mid-2000s, China was, in a sense, ‘late to the game.’ However, after rapid increases in the first half of the 2010s, China’s stock of ODI now surpasses that of Japan, Germany and the UK.”

Significantly, the sectors in which China is focusing are shifting. For example, mining and real estate ODI have declined. More recently, manufacturing, transport, storage and postal services have been among the top sectors. Now, it’s technology, renewable and green energy, electric vehicles and digitalization.

China’s geographic priorities are pivoting, too. The US and Europe are less in favor, while Southeast Asia,

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and the Middle East are seeing more ODI from Asia’s biggest economy.

Interesting how much cohesion there is between all segments of that country's society:

Of course, geopolitical currents are written between the lines in bold font. It’s worth noting that among the nations that saw a roughly 100% drop in engagement with China Inc investments between 2022 and 2023 were the Philippines, Mongolia and Papua New Guinea – all places that are at odds with Beijing on a variety of priorities.

As Christoph Nedopil, director of the Griffith Asia Institute, tells Nikkei Asia: “There are various reasons but it is typically due to incorporation of political and economic risks. For example, the Philippines and China have had some cooling of bilateral relationships.”

Especially

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. Southeast Asia’s biggest economy, which grew more than 5% in 2023, took in about US$7.3 billion of Chinese ODI last year.

The segment on Latin America, latest in the game:

“China’s engagement with Latin America has also been expanding rapidly,” says Wu of China Briefing.

A “substantial catalyst for this expansion,” he notes, was a nearly $3 billion transaction in Peru. There, China Southern Power Grid International acquired two Peruvian assets from Enel, Italy’s largest utility company. It speaks to how “Latin America emerged as a remarkable hub for M&A deals for Chinese enterprises,” Wu says.

Loletta Chow, global leader of EY China Overseas Investment Network, notes that “China remains Latin America’s second-largest trading partner and the region is gradually becoming a crucial economic and trade partner for Chinese enterprises.”

In a November report, EY China calculated that the mergers-and-acquisition deal value by Chinese enterprises in Latin America was $3.3 billion, up 185.9% year on year. The main targets were Peru’s power sector and advanced manufacturing and mobility sector enterprises in Brazil.

EY Global notes that China Inc’s top interests in Latin America are electronics, cross-border e-commerce, agriculture, healthcare, culture and tourism, logistics, solar energy, and automotive, “signaling broad prospects for future collaboration between the two regions.”

It can also be a way to buttress China’s

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in the region, notes Linda Calabrese, a research fellow at the Overseas Development Institute. “Therefore,” she says, “investing in renewables has positive non-monetary returns and can improve bilateral relationships.”

Margaret Myers, Asia-region director at the Inter-American Dialogue think tank, notes that Chinese investors “remain focused on traditional sectors of interest, too, including those related to China’s own food and energy security.”

Some of these still account for a significant portion of overall investment, but investment within these sectors is also shifting in ways that are consistent with China’s growing focus on innovation,” Myers says.

In general, she adds, “the sorts of large-scale infrastructure projects” that once characterized BRI “are no longer as emblematic of Chinese investment in Latin American countries as they once were.”

In many parts of the region, Chinese interest in canals, rail, and other major transport and energy, she adds, “is being replaced by a growing emphasis on innovation, whether in information and communication technology, renewable energy, or other emerging industries, consistent with Beijing’s laser focus on its own economic upgrading and global competitiveness.”

 

[Randomuser]

Ive noticed the western MSM media seems to have quieted down on China is collapsing lately. Maybe the big institutions bought up the HK stocks while it was cheap.

Until next news cycle.

 

[henrik]

China has 12½ times more robots in its workforce than industry experts predicted

Only a matter of time’ before Chinese robotics companies catch up to leading-edge technology, according to a US think tank
But world’s largest robotics market still lags in software development and innovation

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[BlackWindMnt]

China has 12½ times more robots in its workforce than industry experts predicted

Only a matter of time’ before Chinese robotics companies catch up to leading-edge technology, according to a US think tank
But world’s largest robotics market still lags in software development and innovation

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What is the leading edge in robotics anyway? I can't read the link because of paywall.
As far as i know China's Midea owns the german Kuka at the time it was one of the leading robotics companies in the world.

 

[PikeCowboy]

China has 12½ times more robots in its workforce than industry experts predicted

Only a matter of time’ before Chinese robotics companies catch up to leading-edge technology, according to a US think tank
But world’s largest robotics market still lags in software development and innovation

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at some point you godda wonder what the point of these "experts" is.

 

[Overbom]

Good data

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China's upbeat industrial output, retail sales tempered by frail property​

• Retail sales, factory out top f'casts in boost to recovery
• Gives policymakers hope of keeping growth stable
• But continued weakness in property remains big concern
• Analysts say more policy support needed to shore up economy

BEIJING, March 18 (Reuters) - China's factory output and retail sales beat expectations in the January-February period, marking a solid start for 2024 and offering some relief to policymakers even as weakness in the property sector remains a drag on the economy and confidence.

Industrial output rose 7.0% in the first two months of the year, data released by the National Bureau of Statistics (NBS) showed on Monday, above expectations for a 5.0% increase in a Reuters poll of analysts and faster than the 6.8% growth seen in December. It also marked the quickest growth in almost two years.
Retail sales, a gauge of consumption, rose 5.5%, slowing from a 7.4% increase in December but beating an expected 5.2% gain.

 

[Randomuser]

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So you telling me all that stuff about China market collapsing was just FUD by wall street so they could buy it up cheaper?

Sucks to the guys who sold

 

[siegecrossbow]

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So you telling me all that stuff about China market collapsing was just FUD by wall street so they could buy it up cheaper?

Sucks to the guys who sold

It’s the same with a lot of rich Chinese liberals.

When China announces sale of national debt — post on Weibo “who will buy this junk? CCP won’t even last the decade.”
When national debt is sold — wait in huge queues and buy as much as they could.

 

[Maikeru]

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So you telling me all that stuff about China market collapsing was just FUD by wall street so they could buy it up cheaper?

Sucks to the guys who sold

I think also the Biden admin was leaning on a lot of funds not to invest in China as some kind of leverage point.

 

[BoraTas]

What is the leading edge in robotics anyway? I can't read the link because of paywall.
As far as i know China's Midea owns the german Kuka at the time it was one of the leading robotics companies in the world.

I don't want to commit Chinese chauvinism here as a non-Chinese yet I would really like to know how they assessed what the cutting edge is and how China is behind this. It is weird to make such claims in the first place when these are so many categories of robots and technologies related to them.