BANGKOK (AP) — Chinese leaders have wrapped up a two-day annual meeting to set economic priorities for the coming year, the official Xinhua News Agency said in a report Tuesday that cited a litany of problems but also said the world’s second-largest economy had “achieved a recovery.”
The report gave no details of specific policy changes but laid out broad goals that are in line with what the ruling Communist Party has been doing as it endeavors to steer the world’s second-largest economy toward more sustainable, stable growth as China recovers from the setbacks of the COVID-19 pandemic.
The property industry is in crisis. Prices have been falling for months, suggesting weak overall demand both inside China and in global markets. Youth unemployment is precariously high and local government debts are adding to pressures on the financial system.
The Xinhua report said China was contending with slack demand, excess industrial capacity, weak consumer confidence and “certain risks and hidden problems” — and a world that has grown increasingly “complex, severe and uncertain.”
“China still has to overcome some difficulties and challenges to further revive the economy,” it said. “It is important to be more mindful of potential dangers and to effectively respond to and solve these problems,”
But it also called for greater confidence, saying that “favorable conditions outweigh unfavorable factors.”
The annual economic work conference is usually held in mid-December. It followed a meeting of top party leaders last week where Xinhua reported that Xi had described 2024 as a “crucial year” for attaining goals laid out in the party’s five-year plan through 2025.
Reports on both meetings suggest officials are seeking greater consistency in carrying out policies. That hints at concerns over moves in recent years that have at times caused major disruptions, such as strict and disruptive anti-COVID 19 policies that Beijing abruptly abandoned late last year.
Tuesday’s report said the meeting had called for maintaining stability and for establishing “the new before abolishing the old,” a phrase analysts said suggested greater caution and a more gradual approach.
Policy swings such as the decision late last year to abruptly drop the anti-virus controls, and uncertainty over regulatory changes have also unnerved foreign companies operating in China and appear to be deterring foreign investment, which has fallen sharply in recent months.
The economy has been slowing from its past double-digit growth for years and is forecast to have expanded at about a 5% annual pace this year, in line with the government’s target. Most estimates suggest it will slow further next year.
Last week, Moody’s Investor Service downgraded China’s sovereign debt rating as the country’s real estate crisis seeps into local governments and private financing. It also downgraded ratings for some major Chinese banks and insurance companies.
China has tipped into deflation in recent months, another sign of weakness.
Wholesale, or producer prices, have fallen year-on-year for all of 2023, dipping to a low of minus 5.4% in June. Consumer price inflation has hovered near 0% or below in annual terms since April.
The property sector, a major source of demand for any major economy, has stalled with dozens of developers defaulting on their debts and struggling to finish apartments they promised to deliver.
In response, the government has eased borrowing rules and cut mortgage rates for first-time home buyers while providing some tax relief measures for small businesses. Late last month, it announced plans to issue 1 trillion yuan ($330 billion) in bonds for infrastructure projects and disaster prevention, dipping deeper into deficit to try to nudge the economy into higher gear.
The weak housing market is among trends that have sapped enthusiasm for spending, hindering progress toward increasing domestic demand to help drive growth. Another is the high rate of unemployment among young Chinese, which was at about 20% as of June. That is the latest figure available after the government suspended its monthly reporting on that measure.
The Xinhua report said leaders had resolved to do everything possible to “secure people’s livelihoods and improve their well-being” and to emphasize stable employment.
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
