### Summary
JD.com, China's biggest ecommerce retailer, reported a 50% surge in net income and 7.6% increase in revenue, beating expectations, due to its low-cost strategy attracting customers during China's economic downturn and increased competition.
### Facts
- 💹 JD.com's net income rose 50% to 6.6 billion yuan ($0.9 billion) and revenue increased 7.6% to 287.9 billion yuan ($39.7 billion), exceeding projections.
- 📈 The company gained market share from rivals including Baidu, Alibaba, and Pinduoduo.
- 💰 Service revenue jumped 30% to 54.1 billion yuan ($7.5 billion).
- 🛒 JD.com attracted more vendors and customers with its low-cost strategy and "10 billion yuan" subsidy program.
- 🗣️ CEO Sandy Xu attributed the solid performance to the company's enhanced business structure and supply chain capabilities.
### China's Economic Woes
- 🇨🇳 China's economy has faced challenges including slowing growth, rising debt, a property bubble bust, and weak domestic demand.
- 📉 Gross domestic product (GDP) rose only 3% last year, the slowest pace in decades.
- 🛍️ Retail sales fell 8% month-over-month in July, with deflation of 0.3% year-over-year, reflecting weak domestic demand.
- ⬇️ Deflation can harm economies by discouraging spending and borrowing, leading to a slowdown in economic activity.
### Summary
The Chinese economy has slipped into deflationary mode, with retail sales, industrial production, and exports all missing forecasts. Shrinking domestic demand and a debt-fueled housing crisis are the main causes behind this slowdown.
### Facts
- 📉 Retail sales in July grew by 2.5% year-on-year, compared to 3.1% in June.
- 🏭 Value-added industrial output expanded by 3.7% y-o-y, slowing from 4.4% growth in June.
- 📉 China's exports fell by 14.5% in July compared to the previous year, and imports dropped 12.4%.
- 💼 Overall unemployment rate rose to 5.3% in July, with youth unemployment at a record 21.3% in June.
- 📉 Consumer Price Index-based inflation dropped to (-)0.3%, indicating a deflationary situation.
- 🏢 China's debt is estimated at 282% of GDP, higher than that of the US.
### Causes of the slowdown
- The debt-fueled housing sector collapse, which contributes to 30% of China's GDP.
- Stringent zero-Covid strategy and lockdown measures that stifled the domestic economy and disrupted global supply chains.
- Geopolitical tensions and crackdowns on the tech sector, resulting in revenue losses and job cuts.
### Reaction of global markets
- The S&P 500 fell 1.2% following the grim Chinese data.
- US Treasury Secretary warns China's slowing economy is a risk factor for the US economy.
- Japanese stocks and the Indian Nifty were also impacted.
- China's central bank cut its benchmark lending rate, but investors were hoping for more significant stimulus measures.
### Global market concerns
- China's struggle to achieve the 5% growth target may impact global demand.
- China is the world's largest manufacturing economy and consumer of key commodities.
- A slowdown in China could affect global growth, with the IMF's forecast of 35% growth contribution by China seeming unlikely.
### Impact on India
- India's aim to compete with China in the global supply chain could benefit if Chinese exports decline.
- However, if China cuts back on commodity production due to slowing domestic demand, it may push commodity prices higher.
### Summary
The global economy is showing signs of decoupling, with the US economy remaining strong and China's economy disappointing at the margin. The recent data suggests that the US economy is resilient, with consumption and other indicators pointing in a positive direction. However, there are concerns about the bear steepening of the US curve and the repricing of the long end of the curve. In contrast, China's economy continues to struggle, with weak data and monetary policy easing. Japan has surprised with positive data, but there are questions about whether the current inflation shift will lead to tighter monetary policy. Overall, there are concerns about a potential global economic recession and its impact on various economies.
### Facts
- 💰 Despite the decoupling of the US and China economies, concerns remain about the negative impact of a China slowdown on global growth.
- 💹 Recent data show that the US economy, particularly consumption, remains resilient.
- 🔒 The bear steepening of the US curve and the repricing of the long end of the curve are causing concerns.
- 🇨🇳 In China, weak data on consumption and investment and declining house prices continue to affect the economy. The PBoC has eased monetary policy.
- 🇯🇵 Japan's 2Q data surprised with strong export growth, but there are concerns about the impact of a potential inflation shift on global yields.
- 🌍 The global economy is at risk of recession, with concerns about the impact on emerging market economies and the US economy.
### Summary
Mexico has become the top trading partner of the United States, surpassing China and Canada, with trade reaching $263 billion in the first four months of this year. This shift reflects an accelerated move towards "nearshoring" and regional trade, driven by factors such as increased protectionism and the desire for faster delivery times.
### Facts
- 🇲🇽 Mexico has overtaken China and Canada as the top trading partner of the US since the start of the pandemic.
- 🌍 The $263 billion worth of goods traded between Mexico and the US in the first four months of 2021 accounted for 15.4% of total US trade.
- 🌎 In comparison, trade totals with Canada and China were 15.2% and 12% respectively.
- 🚚 The practice of "nearshoring," where countries bring supply chains closer to home, has gained momentum, driven by factors such as increased protectionism and the demand for faster delivery times.
- 📉 The economic chaos of 2020 continues to shape the world economy, with regional trade and nearshoring becoming more prominent.
Please note that the article also mentions the improving relationship between the US and China, as well as the potential for growth in trade between Mexico and the US. However, these points are not included in the bulleted facts above.
### Summary
The latest trade figures for New Zealand show a larger-than-expected $1.1 billion trade deficit for July, mainly due to a 14% decrease in dairy exports and the economic slowdown in China.
### Facts
- 📉 New Zealand experienced a bigger-than-expected trade deficit of $1.1 billion in July, driven by a 14% drop in dairy exports.
- 📉 The 12-month running deficit is $15.8 billion, lower than the previous record of $17.1 billion in May but higher than the $12 billion deficit a year ago.
- 🌍 The overseas merchandise trade statistics focus on imports and exports of merchandise goods, while the balance of payments figures encompass the country's total transactions with the rest of the world.
- 📊 The current account deficit decreased to $33 billion in March, accounting for 8.5% of GDP compared to 9% in December.
- 📉 In July, goods exports fell by $890 million (14%) to $5.5 billion, while goods imports fell by $1.2 billion (16%) to $6.6 billion.
- 🥛 The largest export commodity group, including milk powder, butter, and cheese, dropped by $350 million (19%) to $1.5 billion compared to the previous year.
- 🔽 Exports to China decreased by $407 million (24%) year-on-year, with notable declines in meat and edible offal, preparations of milk, cereals, flour, and starch, and milk powder, butter, and cheese.
### Summary
Thailand's economy grew slower than expected in Q2 2023, with tourism offsetting weaker exports due to global demand slowdown.
### Facts
- 💼 Thailand's economy expanded by 1.8% in Q2 2023, lower than the expected 3.1% growth.
- 📉 The government revised its GDP growth forecast for 2023 to 2.5% to 3.0%, down from the previous range of 2.7% to 3.7%.
- 📊 Q2 GDP rose by 0.2% on a quarterly basis, below the forecasted increase of 1.2%.
- 🌐 Thailand's economy has been supported by the tourism sector and private consumption growth amid weak global demand.
- 📉 Exports, a key driver of growth, have contracted since October 2022, primarily due to China's slowdown as its major trading partner.
### Summary
China's foreign trade with other BRICS countries (Brazil, Russia, India, and South Africa) increased by 19.1% in the first seven months of 2023, reaching 2.38 trillion yuan ($326.85 billion).
### Facts
- 💼 In the January-July period of 2023, China's trade with other BRICS countries accounted for 10.1% of its total foreign trade value, rising by 1.6 percentage points.
- 📈 China's exports to BRICS countries reached 1.23 trillion yuan, showing a year-on-year growth of 23.9%.
- 📉 China's imports from BRICS countries amounted to 1.15 trillion yuan, with a year-on-year growth of 14.3%.
- 🌐 China's private companies expanded their trade with BRICS countries, with a trade volume of 1.36 trillion yuan, representing a year-on-year growth of 29.4% and accounting for 57.1% of the total trade volume between China and BRICS countries during the period.
- 🔧 Since its establishment in 2006, the BRICS mechanism has become a significant driver for global economic recovery and has continuously strengthened economic and trade cooperation among its member countries.
### Summary
China's fiscal revenue rose 11.5% in the first seven months of 2023, but at a slower pace than the previous six months, indicating a loss of economic momentum.
### Facts
- 💰 China's fiscal revenue increased by 11.5% in the first seven months of 2023.
- 💸 Fiscal expenditure grew by 3.3% to 15.2 trillion yuan ($2.10 trillion).
- 📉 In July, fiscal revenue only rose 1.9% year on year, slower than the previous month's increase.
- 📉 Fiscal expenditure fell 0.8% in July, narrowing the decline compared to the previous month.
- 🌍 China's economy grew at a sluggish pace in the second quarter due to weak demand domestically and internationally.
- 📉 The consumer sector in China experienced deflation in July, with analysts predicting persisting price stagnation for the next six to 12 months.
### Summary
India's total exports and imports of goods and services surpassed $800 billion in the first half of 2023, with a healthy growth in the services sector offsetting a slowdown in global demand.
### Facts
- 📈 Exports of goods and services rose by 1.5% to $385.4 billion in January-June 2023 compared to the same period in 2022.
- 📉 Imports declined by 5.9% to $415.5 billion during the first half of 2023, compared to January-June 2022.
- 💵 Standalone goods exports dropped by 8.1% to $218.7 billion, while imports contracted by 8.3% to $325.7 billion.
- 💼 Services exports grew by 17.7% to $166.7 billion, while imports rose by 3.7% to $89.8 billion during the six-month period.
- 💰 The depreciation of the Indian Rupee didn't prevent the decline in merchandise exports, and weak global demand and loss of competitiveness in labor-intensive sectors contributed to the modest decline.
- 🌍 Several factors, including conflicts, inflation, monetary policies, and financial uncertainty, are expected to weaken world trade in 2023.
- 🛡️ India should focus on increasing product quality and supply chain competitiveness, retain policy space in free trade agreements and Indo-Pacific Economic Framework for Prosperity (IPEF), and be prepared to respond to unilateral policy decisions.
- 📊 Among the product categories contributing to India's exports, 11 out of 29 registered positive export growth, while 18 declined during January-June 2023.
- 📱 Smartphone exports surged to $7.5 billion in the first half of 2023, up from $2.5 billion in the same period in 2022.
- 🌐 India's exports declined in 134 of the 240 countries it exports goods to, with major declines observed in the USA, UAE, China, Bangladesh, and Germany.
- 🌐 India's export promotion should focus on the 41 countries where its exports exceed $1 billion, accounting for 87% of its exports.
- 👥 The top 15 countries with which India has the highest trade deficit include China, Russia, Saudi Arabia, Iraq, and Switzerland.
- 📉 The share of free trade agreement partners in India's merchandise exports decreased from 30.1% in the first half of 2022 to 26.8% in 2023.
- ⛽ Import of crude petroleum declined by 7.6% to $73.2 billion in January-June 2023, with Russia's share in India's import of petroleum crude increasing significantly.
- 🌍 Import growth from major suppliers like Iraq, Saudi Arabia, and the UAE declined during this period.
China's economy, which has been a model of growth for the past 40 years, is facing deep distress and its long era of rapid economic expansion may be coming to an end, marked by slow growth, unfavorable demographics, and a growing divide with the US and its allies, according to the Wall Street Journal.
China's foreign trade with other BRICS countries increased by 19.1 percent in the first seven months of 2023, accounting for 10.1 percent of China's total foreign trade value during that period.
Hong Kong's exports continue to decline for the 15th consecutive month, with a 9% decrease in July, due to trade contraction with mainland China, the US, and Europe, affecting the city's economic recovery and prompting a downgrade in GDP forecast.
China has a complex network of trade partnerships with over 200 countries, regions, and territories, and it has a trade surplus with the majority of them, including the US and India, while having deficits with major Asian economies like Taiwan, Japan, and South Korea. These trade relationships are influenced by historical, geopolitical, and strategic factors.
China's economic slowdown is worrisome for global markets as it is one of the largest buyers of commodities.
The US dollar will remain dominant in global trade, but China's yuan is gaining popularity among developing countries such as Russia, Brazil, India, and South Africa.
US trade has shifted away from China due to policies enacted by the Biden and Trump administrations, but US reliance on China-linked supply chains has not necessarily been reduced and consumers have faced higher costs, according to new research presented at a Federal Reserve economic symposium.
China's economic slowdown is causing alarm across the world, as it is expected to have a negative impact on global economic growth, leading to reduced imports and trade, falling commodity prices, a deflationary effect on global goods prices, and a decline in tourism and luxury spending.
Vietnam's exports have declined for the sixth consecutive month due to weaker global demand and China's deteriorating economic outlook, posing a risk to the country's GDP growth target.
South Korea's exports are expected to have fallen 11.6% in August, marking the 11th consecutive month of decline, as China's economic recovery remains sluggish and demand weakens in other regions.
China's economy is not as bad as perceived, with consumer spending picking up and indicating that growth is moving in the right direction, according to an official at the British Chamber of Commerce in China.
China's economic slowdown, driven by a debt-ridden and overbuilt property sector, is not expected to have a significant impact on the global economy or US exports, although a prolonged downturn could have broader consequences. While companies like elevator maker Otis will feel the effects, China's reduced growth is unlikely to be contagious beyond its borders.
The prospect of a prolonged economic slump in China poses a serious threat to global growth, potentially changing fundamental aspects of the global economy, affecting debt markets and supply chains, and impacting emerging markets and the United States.
China's exports are expected to contract at a slower pace in August, with a projected fall of 9.2%, as manufacturers continue to face pressure due to weak overseas demand and a shrinking labor market.
China's economy is showing signs of slowing down, including a decrease in GDP growth rate, declining exports, deflationary consumer price index, high youth unemployment, a weakening yuan, and a decrease in new loans, which could have global implications.
China's share of US goods imports has dropped to its lowest level since 2006, as American companies reorganize supply chains to reduce dependence on China and shift to countries like Mexico and Vietnam.
China's economic growth has slowed but has not collapsed, and while there are concerns about financial risks and a potential property crisis, there are also bright spots such as the growth of the new energy and technology sectors that could boost the economy.
China's imports and exports experienced a monthly decline in August, with exports falling by 8.8% and imports falling by 7.3%, indicating ongoing challenges despite some slight improvement.
China's appeal to multinational corporations remains strong due to its robust domestic market and commitment to opening up its economy, leading to a shift in the quality of foreign investment inflow into the country, particularly in sectors such as trade in services and high-end manufacturing.
The decline in Chinese imports into the U.S. is impacting steel prices and raising concerns about sourcing steel and other metals.
Big Japanese manufacturers and the services sector in Japan are experiencing a decline in confidence, with concerns of a slowdown in China's economy affecting global and domestic growth, according to a Reuters poll. The weak sentiment in the business sector raises doubts about the ability of exports to drive economic recovery amid weak domestic demand. Many companies cited high input costs and weak demand as contributing factors, along with geopolitical risks and tensions between the US and China.
China's currency, the yuan, has depreciated over 8% against the dollar as the Chinese economy grows less than expected, making it harder to reach its growth target of 5% for 2023, and worries about the economy have intensified due to issues in the real estate sector and financial health of local governments, causing concerns about the future of the yuan which may experience a slow but steady depreciation in the face of a weak dollar and a desire to maintain a trade surplus.
China's struggling economy, including its deflation and property crisis, will have a significant impact on the US due to its high foreign investment exposure in China and the dependence of key exporting countries like Chile, Australia, and Peru on the Chinese market.
Singapore's annual exports fell for the 11th consecutive month in August, declining by 20.1% as the trade-dependent economy struggles with global headwinds and declining demand, indicating that export stabilization is not yet within reach.
The outlook of U.S. companies on China's markets in the next five years has hit a record low due to factors such as political tensions, tariffs, slow Covid recovery, and issues in the real estate market; however, complete decoupling between the two economies is unlikely.
Japan's exports to China declined for the ninth consecutive month in August, dropping 11%, due to weak demand and the suspension of seafood imports following the Fukushima Daiichi nuclear plant incident.
China experienced its largest capital outflow since 2015, with $49 billion leaving the country, as economic concerns prompt investors to withdraw; of this, $29 billion was withdrawn from securities investments, including bonds. The outflow was compounded by a record-high $12 billion in mainland-listed stocks being dumped by foreign investors and a $16.8 billion deficit in direct investment, the largest since 2016. The decline in the capital account was exacerbated by the tourism season, with outbound travel negatively impacting the services sector, while inbound travel remained suppressed, causing a continued deficit in the services trade. Efforts by Beijing, such as reducing the foreign currency reserves held by banks, have aimed to support the yuan but have been unable to prevent a significant decline in the offshore yuan. Weak exports and the allure of US yields have also contributed to the yuan's decline, further complicating China's capital flight situation, as doubts about the country's ability to achieve its 5% GDP target for the year grow.
China's economy showed positive signs of recovery in August, with an increase in industrial output, retail sales, and consumer inflation, indicating resilience despite concerns of "stagnation" or "collapse" in Western media reports; willingness to spend also recovered, with an increase in residents' income, per capita consumption spending, and domestic tourism; furthermore, China's exports remained resilient, with a steady increase in the export share of intermediate and capital goods, outweighing the decline in the export share of consumer goods.
China's economic growth appears to be slowing down, with issues such as an aging population and a collapsing housing sector leading to speculation that the country's economic miracle may be coming to an end, while its diplomatic strategies have also caused strain on international relationships.
Chinese exporters are navigating a bumpy road back overseas amid a turbulent economic recovery, but are adapting to changes in global supply chains by diversifying production lines and exploring new markets such as the US.
China's economic growth this year may be as low as 2 percent, half of what the International Monetary Fund predicts, due to problems in the property sector, weak foreign direct investment, and other structural issues, according to Daniel Rosen of the Rhodium Group. The IMF has forecasted 5.2 percent growth for China, but Rosen believes growth above 3 percent is unlikely in the medium term. Additionally, concerns are rising that China's economic challenges could hinder global growth.
