(Bloomberg) — Chinese officials are using a new strategy to help shape a positive narrative on their nation’s slowdown: Making early disclosures on flattering economic news in a bid to boost markets.
The latest example came Thursday, when Vice Finance Minister Liao Min highlighted bright spots in the budget data at a press briefing in Beijing. His comments beat the monthly statement which normally provides that information, without commentary, by one hour.
“We believe this will have a positive impact on facilitating the economy’s recovery,” Liao said, spotlighting the fastest execution of budget spending for January and February in nearly five years. He downplayed less rosy numbers that might have got investors’ attention, explaining falling revenue was distorted by base effects.
Premier Li Qiang kicked off the trend back in January by giving early confirmation China had met its 2023 growth goal at a major forum in Switzerland. His reveal came one day before the official figures were due, and allowed China’s No. 2 leader to trumpet Beijing’s ability to hit that target without using major stimulus.
Later that month, central bank governor Pan Gongsheng took the rare step of personally announcing a cut to banks’ reserve requirements, 12 days before the trim took effect. That move sparked rallies in Chinese stocks and bonds. This month, Commerce Minister Wang Wentao unveiled a surprise soar in export numbers at a high-profile briefing one day before the data was due.
The change in operating mode signals officials are stepping up efforts to boost confidence in China’s economy, as a property crisis and weak domestic demand drag on sentiment at home. Foreign investors have described having “promise fatigue” over Beijing’s pledges to improve the business environment for them.
“This suggests that economic officials are feeling a degree of political heat,” said Christopher Beddor, deputy China research director at Gavekal Dragonomics, of the spate in early releases. The “strange reveals” have one message in common, he added: “Either things are better than expected, or officials are taking steps to make it better.”
The new strategy follows a call from top leaders to amplify bullish views about the economy at a December meeting. China’s post-pandemic recovery disappointed last year, partly due to geopolitical tensions and dented investor confidence after years of Covid curbs and policy swings.
In line with that call to create positive news narratives around the economy, Xuan Changneng, a deputy governor of the People’s Bank of China, on Thursday repeated a pledge by his boss earlier this month that there is still room to lower the reserve ratio requirement.
His comments spurred a brief uptick in Chinese shares. Overall, however, the early reveals’ impact on the market has been muted, as investors take time to assess the signals, according to Bruce Pang, chief economist for Greater China at Jones Lang LaSalle Inc.
“The teachers are underlining the key points,” he added. “But it will take investors time and patience to verify how important the messages are.”
Government agencies have previously been accused of trying to bury negative data, including by temporarily suspending the release of some indicators and changing how they’re calculated. Such abrupt moves have only fanned investor fears about the ruling Communist Party’s increasingly opaque policymaking.
The National Bureau of Statistics halted the publication of monthly numbers for industrial profits for several months in 2022 when the figure was declining. After the youth jobless rate hit a record high in June, officials paused publishing that data for months before bringing it back with a rosier number that excluded students.
Another tweak to that high-profile data set came this month: It will no longer be released at the NBS’ monthly press briefing, as has been the norm in recent years. Instead, it will now be published to an online database at an unspecified time. Officials didn’t give an explanation for the change in operations.
With policymakers targeting an ambitious goal of about 5% growth this year, officials will need to steady confidence in the economy. A measure of new foreign direct investment into China fell in 2023 to the lowest level in 30 years, while a market meltdown earlier this year underscored the challenges facing the government. The surprise early data releases are unlikely to be any substitute for a meaningful shift in policies.
But such statements are a positive step, according to Xiaojia Zhi, chief China economist at Credit Agricole CIB, because they signal “more communication” from the government to guide market expectations.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
