China’s economy stabilized last quarter after slowing to the weakest pace in almost three decades, with the first acceleration in investment since June signaling that a firmer recovery could be underway.
- Gross domestic product rose 6 per cent in the final quarter of 2019 from a year earlier, the same as in the previous three-month period and the median estimate
- Fixed-asset investment rose 5.4 per cent in the year, increasing its pace in the final month particularly through a jump in manufacturing expenditure
The world’s second-largest economy expanded by 6.1 per cent in 2019, slower than 6.6 per cent the previous year but in line with the government’s target. The signing of the phase-one trade deal with the U.S. this week combined with recovering global demand has improved the outlook for Chinese factories and exporters in 2020, though uncertain implementation of that deal and domestic financial fragility remain risks.
Chinese stocks inched higher and the offshore yuan gained, trading at US$6.8715 at 10:48 a.m. in Shanghai.
Industrial output rose 6.9 per cent in December from the same period the previous year, versus the median forecast of 5.9 per cent. Some of that may be due to the effects of Chinese New Year. That holiday is earlier this year than in 2019, and companies may have increased production in December ahead of a shutdown later this month. Retail sales rose eight per cent versus an estimate of 7.9 per cent.
“The latest GDP and IP data provides a very positive start to the Chinese New Year for China’s economy,” said Rajiv Biswas, Asia Pacific chief economist at IHS Markit in Singapore. “The outlook for 2020 is for continued robust growth, boosted by the Phase One trade deal with the U.S. and the continued positive impact of government monetary and fiscal policy stimulus measures.”
The surveyed unemployment rate ticked up to 5.2 per cent in December from 5.1 per cent, signaling that the manufacturing-led slowdown in 2019 may be filtering through to the labor market.
What Bloomberg’s Economists Say…
Stronger-than-expected activity in December points to further stabilization in early 2020. The signing of the ‘phase-one’ trade deal takes China out of the most turbulent waters, but it will hardly be smooth sailing ahead — sizable U.S. tariffs will continue to weigh on the external sector, and sentiment is weak.
Chang Shu and David Qu, Bloomberg Economics
About 58 per cent of China’s growth in 2019 was due to consumption, with investment adding 31 per cent and the remaining 11 per cent from net exports, Statistics Bureau head Ning Jizhe told journalists after the data was released Friday in Beijing. That contribution of consumption was lower than in 2018, indicating that efforts to rebalance the economy away from reliance on an investment-led model still have a way to go.
One factor in that is likely to be the weak growth in incomes in 2019. Per capita incomes grew 5.8 per cent in the year, below the 6 per cent real growth of the economy. The slower growth in real incomes was partly due to higher inflation, according to Ning, who said he expects personal income and consumption to continue growing this year.
Policy makers have signaled they are prioritizing economic stability in 2020, with stimulus to be kept basically unchanged. Data released Thursday showed that overall credit growth held up in December and a gauge of borrowing costs fell, indicating that policy makers are beginning to see some progress in channeling credit to the economy.
“All we can say is that China’s economy is stabilizing. It’s hard to forecast if the trend will continue in 2020 and if there will be a rebound,” said Betty Wang, senior economist at Australia &New Zealand Banking Group. “The trade deal provided some short-term support for the economy, but there still exists great uncertainty in the long run.”
The number of births per 1000 people declined to 10.48, the lowest level on record according to National Bureau of Statistics data going back to 1949 when the Communist Party took power. China’s working-age population — thoseaged 15 to 59 — declined by 890,000, the figures released Friday showed. The number of newborns in 2019 fell to 14.65 million, a decrease of 580,000 from the year before.
That underlines the longer-term challenges that the economy faces, from demographics to an increasingly heavy debt load. Policy settings agreed by the top leadership last month are due to be signed off by the nation’s legislature in March.
For now, officials remain wary of boosting monetary stimulus and are focusing on the effectiveness of fiscal policy. Economists see the growth target for 2020 being set at “about 6 per cent,” signaling an acceptance of the long-term slowdown that the nation is on.
December’s data provides support to the argument that the current policy mix is the right one, according to Michelle Lam, greater China economist at Societe Generale SA in Hong Kong.
“Retail sales growth were steady, indicating still pretty resilient consumers despite growing downward pressure on the labor market,” she said. “This, together with the “phase one” deal, surely reduces the downside risks to the economy for 2020, offering comfort to policy-makers to stick with a measured easing approach.”
–With assistance from Tomoko Sato, Lin Zhu and Kevin Hamlin.
Mindset Matters: The Responsibility Of Corporate Behavior In Magnifying The Disability Economy – Forbes
Through a series of columns starting with the previous Mindset Matters piece, the hope is to open a dialogue around the significance of the emerging Disability Economy and discover some of the intricacies that are key to its very growth. As we mine deeper into this burgeoning economy of identity it is critical to recognize that this very concept is not static, but rather filled with complexity and nuances that must be explored further. If companies are going to truly embrace disability inclusion as a key stakeholder within their leadership strategy and a central theme to their long-term business success, then they must integrate key areas of knowledge that are essential to adopting a framework that radiates true disability confidence.
Corporations who choose to participate in this budding Disability Economy must understand the holistic nature of what needs to be done. A good starting point is to acknowledge the fact that the disability community is diverse, that the lived experience of disability cannot be seen through one lens, rather it must be seen through a diversity of perspectives that offer organizations a multitude of opportunities. Corporate leadership should have an awareness that while the Disability Economy is continuing to grow, it is ephemeral, in that it will continually change with each generation and each situation demanding new requirements that necessitate innovative ways of thinking and operating. It is this very awareness that will be critical for organizations to foster greater economic opportunities within this uncharted space.
So, what do businesses need to know? Corporate leadership must understand that to honestly immerse themselves within the Disability Economy in an authentic way they must identify with the value of needs. It is this understanding that must become the fundamental building block for corporate leaders to work on as they move forward while embracing disability into their business strategy. The value of needs is based on the notion that amplifying soft skills such as listening, trust, and empathy are central to pushing past barriers that are critical to gaining access to this new marketplace.
The adage “Nothing About Us, Without Us” cannot be far from the mind of any corporate leader who is engaging in the disability space. For any corporate leader to be involved in the Disability Economy, one must begin with a level of trust. No matter what the product or service, having buy-in from the disability community is essential to the process. Understanding the communities’ needs is imperative, but it is also the first salvo in starting an ongoing dialogue between corporate entities and the disability community themselves. It is through this process that the potential for real evolution can happen, and new products and services can have real meaning within this growing market.
As corporate leaders realize the value of need, the next step is making them habitual. The role of need must become an essential calling card for any organization doing business within the Disability Economy. It is not only critical for larger corporations but has value across many other branches of the emergent Disability Economy from entrepreneurship, social investors, to nonprofit organizations, and even government and educational institutions. These are topics that we will investigate further in future columns, but for the moment it is important to acknowledge the role behaviors play in expanding economic opportunities by celebrating the value of both the individual and the collective to shape the reality of the future.
Corporate leaders say they want to “do the right thing”, yet the question lies not just in the want, but the how. It is time for organizations and their leadership teams to be vulnerable and recognize that it is okay not to know. By identifying the needs of others to become a part of the habit of daily business life gives corporate leaders the flexibility to not only be prepared for change but move beyond a level of unconscious bias that offers a continuous mode of learning that will impact business both socially and economically creating opportunities for true disruption that can recalibrate the culture of business for the next century.
Japan economy contracts 3.6% in 3Q as virus hits spending – Yahoo Canada Finance
TOKYO (AP) — Japan’s economy contracted at a 3.6% annual rate in July-September as a wave of coronivirus infections crimped travel and other activities, the government said Wednesday.
The estimate for the last quarter, downgraded from an earlier report of a 3.0% contraction, reflected weakness in consumer spending and trade, the government said.
In quarterly terms, the measure used for most economies, the economy contracted 0.9%, compared to the earlier estimate of a 0.8% contraction.
The world’s third-largest economy was in a slump before the pandemic hit. Its recovery has been fitful thanks to precautions taken to curb COVID-19 infections. Troubles with supply chains, especially for computer chips used in autos, have also taken a toll.
Japan’s latest big coronavirus outbreak, in the late summer, has receded for now with a sharp drop in cases. But it hit during the usually busy summer travel season, with calls for restricted business activity and travel hurting restaurants, hotels and other service sector industries.
Consumer spending is recovering and will likely drive a recovery in the current quarter, Norihiro Yamaguchi of Oxford Economics said in a commentary.
“With supply chain disruptions easing in the auto sector, production and exports are also projected to recover, albeit at a moderate pace,” he said.
The latest data showed a lower level of private inventories than earlier reported and weaker government and consumer spending. It also showed wages contracted by 0.4%, instead of growing by 0.1% as earlier reported.
Japan’s Cabinet has approved a record 56 trillion yen, or $490 billion stimulus package, including cash handouts and aid to ailing businesses, to help the economy out of the doldrums worsened by the coronavirus pandemic. Parliamentary approval of the plan is expected this month.
The Associated Press
The global economic transition to a green economy – Lombard Odier
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