Tag: china

China rolls out new measures to fix its property crisis, spur growth

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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China announced a slate of fresh measures Friday to reinvigorate its ailing property industry after the latest data showed housing prices have slumped nearly 10% since the start of the year.

Among other things, the central bank said it would reduce the minimum down payment for mortgages and remove the floor on interest rates for first and second homes.

China’s housing market has slumped after a crackdown on excessive borrowing by property developers several years ago, dragging along a wide range of other businesses — such as home furnishing, appliances and construction — and slowing growth in the world’s No. 2 economy.

Dozens of developers, whose legions of high-rise apartments have transformed urban landscapes across China, have defaulted on their debts. Many projects have just stalled, unfinished.

He Lifeng, a vice premier, said officials would roll out policies to suit each city and “fight the tough battle of dealing with the risk of unfinished commercial housing.”

“We will solidly advance key tasks such as guaranteed housing delivery and absorption of existing commercial housing,” the official Xinhua News Agency cited He as telling a top level teleconference on property policies.

The effort to entice more families to buy homes has gained momentum after earlier moves such as interest rate cuts and government-backed financing failed to lure buyers into the market at a time when developers are struggling to deliver housing already promised and paid for.

Housing is a mainstay of investment for Chinese, given the low level of interest rates paid by banks, and many potential buyers might be waiting for the market to bottom out before considering new purchases. Also, layoffs and other disruptions from the pandemic have left many people wary of spending.

The announcement by the People’s Bank of China said that effective Saturday, the interest rate for first-time housing provident fund loans for under 5 years will be cut by 0.25 percentage point to 2.35%. The rate for loans over 5 years was reduced by 0.25 percentage point to 2.85%.

Minimum down payments for loans for first homes will be 15% of the purchasing price. For second homes, it will be 25%, it said.

The latest efforts, which take the down payment levels and mortgage interest rates to historic lows, show Chinese leaders are determined to stabilize the real estate market, Chen Wenjing of China Index Holdings, a Nasdaq-listed company specializing in information about China’s real estate market, said in a report.

“Reducing the down payment threshold and home purchase costs for residents will likely boost their willingness to buy homes,” Chen said. If major cities follow up with related measures, that will likely improve market sentiment even more, he said.

Also Read: North Korea test-fires a ballistic missile a day after US, South Korea conduct a fighter jet drill

Officials should focus on ensuring home buyers get what they paid for, and when that is impossible the courts may need to get involved, said Dong Jianguo, vice minister of Housing and Urban-Rural Development.

“In judicial proceedings, protecting the legitimate rights and interests of homebuyers should also be a top priority,” Dong told a news conference in Beijing.

Earlier Friday, officials of the National Bureau of Statistics acknowledged that domestic demand — spending by consumers and businesses — remained “insufficient” and said the government was considering further ways to revitalize the property industry after housing prices sank 9.8% in January-April from a year earlier.

“The complexity, severity, and uncertainty of the current external environment are significantly increasing. There is insufficient effective domestic demand, high business pressure, and many risks and hidden dangers,” said Liu Aihua, a spokesperson for the bureau.

“The foundation for recovery needs to be strengthened,” Liu said.

One of the key strategies being rolled out involves local governments buying apartments that have going unsold due to weak demand, to be rented out as affordable housing in trial programs that appear to have become national policy.

As part of the latest policy relief, the central bank said it is setting up a 300 billion yuan ($42 billion) fund to finance purchases of unoccupied housing by state run companies and local governments for use as affordable housing.

China’s economy grew at a robust 5.3% rate in the first quarter of this year, but that is relatively slow for a developing economy, and signs of weakness have persisted.

The report Friday by the National Bureau of Statistics showed factory output was up 6.7% in April from a year earlier and investment in fixed assets such as factory equipment climbed 4.2%.

But housing starts fell almost 25% year-on-year and sales as measured by floor area were down 20%. Financing for property projects fell 25%.

Retail sales rose only 2.3% in April.

Officials said they expected demand to rebound as the government carries out policies aimed at getting households to sell off old cars and appliances and buy new ones.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

China consumption unexpectedly slows in warning sign to economy

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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China’s consumer spending growth unexpectedly slowed in April while industrial production accelerated, highlighting the lopsided recovery of the world’s second-largest economy.

Retail sales expanded 2.3%, the National Bureau of Statistics said Friday. That’s down from 3.1% in March, and worse than the 3.7% predict by economists in a Bloomberg survey. Industrial output rose 6.7% in April from a year ago, faster than the median estimate of 5.5%.

China’s export-driven manufacturing sector has powered the world’s No. 2 economy this year, as a housing crisis continues to weigh on domestic demand. Exports returned to growth in April and factory activity expanded for a second month. But consumer prices remained sluggish, and credit shrank for the first time since 2005.

Growth in fixed-asset investment was 4.2% in the first four months of the year, weaker than a forecast 4.6% gain. Investment in property development declined 9.8%, worsening from the first quarter.

The urban jobless rate was 5%, down from 5.2% as of the end of March.

“Overall the economy operated stably in April,” the NBS said in a statement accompanying the release, attributing the slowing indicators to base and seasonal effects. “New growth drivers are maintaining a fast growth and the economy continued its recovering and improving trend.”

The bureau cited the “increasingly complex, grim and uncertain” external environment among challenges ahead and called for the early implementation of existing macroeconomic policies.

The anemic consumption growth may add urgency to Beijing’s plan to encourage companies and households to upgrade their machines and appliances. Modest subsidies began to be rolled out late last month across cities, including some to help fund car purchases.

The program can help spur consumer demand “though will likely require more financial support,” HSBC Holdings Plc economists including Jing Liu wrote in a note Thursday.

Auto sales were one of the biggest drags on spending, sliding 5.6% from a year earlier in the deepest drop in more than a year. China’s carmakers are engaged in a price war that may be encouraging consumers to delay purchases.

Sales of clothing, shoes, hats and textile declined 2% from a year earlier, the first contraction since the end of 2022.

President Xi Jinping’s government has signaled more support is coming. Beijing will start selling its 1 trillion yuan ($138 billion) ultra-long special sovereign bonds Friday, which could fund infrastructure spending critical to growth. That’s spurred expectations of monetary easing to help banks buy the notes.

China is also mulling a plan for local governments to snap up millions of unsold homes, Bloomberg earlier reported. Top leaders previously hinted at more stimulus for the property sector, vowing to study measures to reduce inventory.

Other risks remain. The Communist Party’s focus on ramping up China’s clean energy sectors has stoked tensions overseas, with the US and European Union complaining a deluge of cheap goods are threatening jobs in their domestic markets. The Biden administration has unveiled a 100% tariff on electric vehicles.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

China home prices fall at faster pace despite revival efforts

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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China’s home prices fell at a faster pace in April, underscoring why the government is stepping up efforts to tackle the years-long property crisis.

New-home prices in 70 cities, excluding state-subsidized housing, slid 0.58% from March, National Bureau of Statistics figures showed Friday. Values of existing homes dropped 0.94%. Both were the steepest declines in a decade.

Policymakers are accelerating efforts to revive demand for homes and address a glut in supply. Worries over residential values, unfinished apartments and job security are deterring buyers, prolonging a property slowdown that is dragging on the world’s second-largest economy.

“Prices are expected to drop over the next few quarters as more homeowners list existing properties to take advantage of new policies such as lower mortgage rates and downpayments,” Jeff Zhang, an analyst at Morningstar Inc. in Hong Kong, said before the figures were released.

Also Read: China mulls government purchases of unsold homes to ease glut

From a year earlier, new-home prices fell 3.51% in April, steeper than March’s 2.7% drop, the statistics bureau said. Existing-home prices dropped 6.79%. Both were record declines since the bureau began the current method of collecting data in 2011.

On the supply side, the government is considering a proposal to have local authorities buy millions of unsold homes, in what would be one of the most ambitious attempts yet to salvage the market, Bloomberg reported this week.

Senior government and bank officials are expected to meet to discuss the plan on Friday morning, according to people with knowledge of the matter. The central bank and key ministries are scheduled to brief at 4 p.m.

To spur demand, cities from Beijing to Shenzhen have been relaxing home-buying rules since late April. Some, like Hangzhou, have even scrapped restrictions altogether.

Also Read: China averts moral hazard, for now, after Country Garden pays

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Xi Jinping tells Vladimir Putin China-Russia ties should last ‘generations’

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Chinese President Xi Jinping signaled to Vladimir Putin that ties between the two nations remain strong, as the Russian leader embarks on a new term with the war in Ukraine dragging into its third year.

Xi said his nation was “ready to work with Russia as a good neighbor, friend and partner with mutual trust,” state broadcaster China Central Television reported Thursday after the pair met in Beijing. He added that he was prepared “to consolidate the friendship between the two peoples for generations to come.”

Putin said the cooperation “is one of the main stabilizing factors in the international arena,” according to a video posted on a Kremlin social media account. “Together we uphold the principles of justice and a democratic world order reflecting multi-polar realities and an order in the world based on international law.”

The two leaders’ comments underscore the close relationship that has developed between their nations in recent years. The pair declared a “no-limits friendship” just weeks before Putin launched his full-scale invasion of Ukraine, and have met more than 40 times since Xi came to power in 2012.

Putin wants the visit to ensure that the economic and trade support that China has provided since he attacked Ukraine in early 2022 remains intact. The US has warned China over its trade with Russia, threatening to sanction banks that cross red lines.

The world’s second-largest economy has become an indispensable ally for Russia, which relies on China as a market for its energy and supplier of its wartime needs. That’s put Putin in a sometimes awkward position, with Beijing wary of his nuclear saber-rattling and mindful of the need to keep unfettered access to the US-led global economic system.

Driven by Russian oil and gas sales and purchases of electronics, industrial equipment and cars, Moscow’s trade with China hit a record $240 billion in 2023, more than double the 2020 number.

The visit comes just days after Putin appointed Andrey Belousov, an economist and technocrat, as his new defense minister, replacing the long-serving Sergei Shoigu in a sign the Russian leader sees an extended conflict ahead.

In recent weeks, the US has stepped up warnings to Chinese banks and exporters about consequences if they help to bolster Russia’s military capacity.

In December, the Treasury Department announced it would impose secondary sanctions on banks that facilitate deals in which Russia procures semiconductors, ball bearings and other equipment necessary for its military — even if they’re unaware they’re doing so.

Despite the growing economic ties, China’s exports to Russia were down 13% in April from a year earlier, the second month in a row of an annual decrease, according to Chinese customs data. Russian media reported that Chinese banks in late March began blocking payments from companies in Russia buying components for electronic assembly.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

China mulls government purchases of unsold homes to ease glut

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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China is considering a proposal to have local governments across the country buy millions of unsold homes, people familiar with the matter said, in what would be one of its most ambitious attempts yet to salvage the beleaguered property market.

The State Council is seeking feedback from several provinces and government entities on the preliminary plan, said the people, asking not to be identified discussing a private matter. While China has already experimented with several pilot programs to clear excess housing inventory with the help of state funding, the latest plan would be much larger in scale.

Local state-owned enterprises would be asked to help purchase unsold homes from distressed developers at steep discounts using loans provided by state banks, according to two of the people. Many of the properties would then be converted into affordable housing.

Officials are still debating details of the plan and its feasibility, the people said, adding that it could take months to be finalized if China’s leaders decide to go ahead. The housing ministry didn’t respond to a request for comment.

If authorities do proceed, it would mark a new phase in the government’s closely watched campaign to address the biggest drag on the world’s second-largest economy. China’s home sales plummeted about 47% in the first fourth months and unsold housing inventory is hovering at an eight-year high, exacerbating a meltdown that threatens to put about 5 million people at risk of unemployment or reduced incomes.

Investors have been awaiting details of the government’s next moves after the ruling Communist Party on April 30 vowed to explore new approaches to ease the real estate crisis. The Politburo, composed of China’s 24 most-senior leaders, said the country was studying ways to “digest” the existing stockpile of homes.

A gauge of Chinese property stocks has rallied about 14% since then.

While Beijing has experimented in the past with state buying of unsold apartments, most smaller-scale initiatives have met with little success.

In early 2023, the People’s Bank of China made 100 billion yuan ($13.8 billion) available to some financial institutions through a specialized lending facility. The money was meant to help eight cities on a trial basis buy unsold properties for use in local subsidized rental programs.

The Economic Observer newspaper reported in January this year that cities including Qingdao and Fuzhou had started using those funds to buy apartments. Still, only 2 billion yuan was extended under the program as of March, the central bank’s latest quarterly data showed, implying caution among banks and local authorities.

Since the Politburo meeting last month, several major cities including Hangzhou, the homebase to Alibaba Group Holding Ltd., scrapped all their remaining curbs on residential purchases to lift transactions.

Meanwhile, more than 50 Chinese cities rolled out “trade-in” programs that offer residents incentives for selling their old homes and upgrading to new properties as part of efforts to boost housing demand. Among them 11 local government or city-backed entities are conducting trials of buying housing inventory, according to a note from Tianfeng Securities Co. this week.

Even so, China’s property sector is unlikely to stabilize until the gap between housing supply and demand closes, according to Bloomberg Economics.

Unsold housing inventory climbed to 3.6 billion square feet last year, the highest since 2016, official data showed. It will cost at least 7 trillion yuan ($967 billion), or 78% of China’s budget deficit this year, for the government to absorb the inventory in 18 months, Tianfeng Securities estimated.

The new plan to enlist local governments to reduce housing glut could further exacerbate their debt level, which has soared to 56% of gross domestic product as of last year. Banks would also be under pressure as their balance sheets have already been eroded by rising bad loans and narrowing margins.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

China vows ‘resolute measures’ after Joe Biden’s new tariffs

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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China blasted the Biden administration’s move to increase US tariffs on a wide range of Chinese imports, vowing to take its own action, without giving specifics.

“China will take resolute measures to safeguard its own rights and interests,” the Ministry of Commerce said in a statement Tuesday. “The US should immediately correct its wrong actions and cancel the additional tariff measures against China.”

President Joe Biden is hiking tariffs on imports from China including semiconductors, solar cells, and critical minerals, with rates ranging from 25% for batteries to 100% for electric vehicles. The announcement was the culmination of a review of predecessor Donald Trump’s tariff increases — none of which were rolled back.

China called the additional tariffs “political manipulation,” with the move coming ahead of US elections this year.

In response to Trump’s tariff hikes from 2018 onwards, Beijing often attempted a tit-for-tat approach — trying to match the size and scope of US measures. But analysts expect a more limited response this time.

“Beijing’s direct retaliation against the US will avoid sharp escalation,” predicted Michael Hirson, a former US Treasury official who now heads China analysis at 22V Research. “Actions that lash out at prominent US firms or ramp up supply-chain restrictions, such as limiting exports of critical minerals, would hurt Xi’s efforts to shore up domestic and international confidence in China.”

President Xi Jinping in recent months has led efforts to bolster waning foreign investment in China. Hirson added that “China’s leadership will also seek to avoid actions that make China the center of the US presidential campaign.”

In a briefing on Tuesday afternoon, Chinese Embassy spokesman Liu Pengyu said accusations of Chinese overcapacity were a “false narrative” aimed at hindering the country’s economy. He praised China’s manufacturing sector as simply more competitive, innovative and efficient.

“We want to tell our US colleagues that blaming others won’t make yourself more competitive,” Liu told reporters. “Stop using overcapacity as an excuse for trade protectionism. Stop politicizing economic and trade issues.”

US measures announced Tuesday are themselves limited — which may help to contain Beijing’s response, according to Tobin Marcus and Chutong Zhu at Wolfe Research in New York. Biden’s tariff hikes only amount to an 8% increase in “total exposed import volume” from China, and the phase-in periods “will mitigate impact,” they wrote in a note.

“We expect there will be some Chinese response, but that Beijing will aim for proportionality, which means the US fallout should be limited,” Marcus and Zhu wrote.

Biden is trying to balance looking tough on China and vowing to protect US jobs without destabilizing the domestic economy or inflaming inflation.

Last month, he vowed 25% tariffs on Chinese steel and aluminum that were largely toothless, as the Asian nation sells little of either metal to America.

Treasury Secretary Janet Yellen said on Monday ahead of the tariff announcement that “hopefully we will not see a significant Chinese response — but that’s always a possibility.”

She added on Tuesday that the new tariffs would protect US firms and workers without hurting the pocketbooks of the nation’s consumers.

“I don’t believe that American consumers will see any meaningful increase in the prices that they face,” Yellen said in an interview on the PBS NewsHour.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Xiaomi moves ahead with Tesla-like SUV as first EV hits goals

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Xiaomi Corp. aims to begin making and selling a sport utility vehicle similar to Tesla Inc.’s Model Y as early as 2025, embarking on a major new expansion with production of its debut SU7 electric car set to reach about a 100,000 units this year.

Xiaomi is approaching full initial capacity and is working now to increase output to accommodate demand, people familiar with the matter said. The company benchmarked its envisioned SUV against Tesla’s during development, the people said, asking not to be identified discussing a private project.

An SUV would mark a big expansion of Xiaomi’s $10 billion EV endeavour, spearheaded personally by billionaire co-founder Lei Jun. The company is trying to reduce its reliance on a volatile smartphone market dominated globally by Apple Inc., though with EVs it’s getting into a crowded arena and taking on established rivals Tesla and BYD Co.

It’s unclear what specifications and pricing Xiaomi envisions for the SUV — a type of vehicle gaining in popularity across China. The company’s plans for production, first reported by local media outlet Yicai, could also shift depending on how it progresses on capacity, the people added. Representatives for Xiaomi didn’t respond to emails and a phone call seeking comment.

Discussions about an SUV began as far back as when Lei announced in 2021 that EVs represented his final major entrepreneurial effort, one of the people said. But the company eventually decided to move first on the SU7, a $30,000-plus sedan with a design aesthetic similar to Tesla’s Model 3 and the Porsche Taycan.

Xiaomi doesn’t anticipate the SUV going into mass production until late 2025 at the earliest, when it completes construction on a second phase of its assembly factory in Beijing, said one of the people. For now, it’s prioritizing production of the SU7 as it only has the capacity to make fewer than 10,000 deliveries a month, the person said.

Xiaomi, which gets more than 60% of its revenue from smartphones, has been trying to diversify in part because of sluggish device demand in its home market.

Yet it joins scores of players vying for a slice of the Chinese EV market — the world’s largest, but one where margins have compressed as Tesla and BYD lead a price war during a period of slowing growth. Apple nixed its own long-incubating EV project after failing to overcome challenges in adapting its technological expertise to a new field of manufacturing.

Xiaomi’s SU7 series received close to 90,000 confirmed orders as of the end of April — about a month after the debut in late March. Xiaomi’s stock has risen some 30% since the SU7’s debut and is now close to its highest level in about two and a half years.

Its EV business could break even in 2026 — two years ahead of a previous estimate — because of improving capacity and a positive market reception for premium models, HSBC Qianhai Securities’ analysts Frank He and Steven Wang wrote in a memo last week.

They expect the company to more than double shipments to 240,000 units in 2025. “The capacity bottleneck will start to ease in the third quarter of 2024,” they wrote.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

China averts moral hazard, for now, after Country Garden pays

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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A Chinese program to backstop distressed developers’ debt dodged its first potential intervention after Country Garden Holdings Co. paid bond interest, averting the moral hazard that such support may fuel.

The distressed developer paid interest totaling 65.95 million yuan ($9.1 million) on its 3.95% note and 3.8% bond, according to company filings. The coupon payments were made despite Country Garden saying in a statement on May 9 that it couldn’t meet initial deadlines that day, and that a guarantor would step in if it couldn’t pay within three days. Both notes are guaranteed by state-owned firm China Bond Insurance Co.

The payments raise questions about the outcome of talks between China Bond Insurance and Country Garden, given speculation that the guarantor would likely push issuers first to pay under the guarantee program to avoid raising moral hazard issues. Any nonpayment in this program could open the door to more distressed borrowers not paying as they wouldn’t want to be seen being selective about which debts to pay.

“We cannot rule out the possibility that Country Garden might have been pressured by the regulator to cough up the cash for the coupon payment rather than triggering the payment clause under the bond guarantee program,” said Zerlina Zeng, senior credit analyst at Creditsights Inc.

China Bond Insurance may have been possibly concerned that a failed payment by Country Garden “would reduce the willingness of other developers that are covered under the bond guarantee program,” she said.

China Bond Insurance and Country Garden didn’t immediately respond to Bloomberg’s requests for comments.

Once China’s largest developer by sales, Country Garden has been hit hard by the property crisis and now is saddled with 1.36 trillion yuan of total liabilities, according to its unaudited 2023 interim results. The Foshan-based company reported contracted sales for April of 3.9 billion yuan, compared with 22.7 billion yuan in the same period last year.

China Bond Insurance is at the heart of a program introduced by authorities in 2022 to help private-sector developers struggling with the country’s property-debt crisis avoid liquidity crunches.

So far at least 33 bonds have been issued under the program, with 33.7 billion yuan raised in total, according to data compiled by Bloomberg. No coupon payments have been missed on other bonds guaranteed under the program.

Some developers that have issued notes via the program, such as CIFI Holdings Group Co., have defaulted on other bonds, but not those guaranteed by China Bond Insurance.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

China largest trading partner of India in FY24 with $118.4 billion; US second with $118.3 billion

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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China has emerged as the largest trading partner of India with $118.4 billion two-way commerce in 2023-24, slightly edging past the US, according to the data of economic think tank GTRI.

The bilateral trade between India and the US stood at $118.3 billion in 2023-24. Washington was the top trading partner of New Delhi during 2021-22 and 2022-23.

The data showed that India’s exports to China rose by 8.7% to $16.67 billion in the last fiscal. The main sectors which recorded healthy growth in exports to that country include iron ore, cotton yarn/fabrics/made-ups, handloom, spices, fruits and vegetables, plastic and linoleum.

Imports from the neighbouring country increased by 3.24% to $101.7 billion.

On the other hand, exports to the US dipped by 1.32% to $77.5 billion in 2023-24 as against $78.54 billion in 2022-23, while imports dipped by about 20% to $40.8 billion, the data showed.

The Global Trade Research Initiative (GTRI) said that from fiscal year 2019 to FY2024, India’s trade dynamics with its top 15 trading partners underwent significant transformations, impacting both exports and imports along with the status of trade surplus or deficit across various sectors.

It added that China witnessed a marginal decline in exports by 0.6%, from $16.75 billion to $16.66 billion, while imports from China surged by 44.7%, from $70.32 billion to $101.75 billion.

“This growth in imports led to an expanding trade deficit, rising from $53.57 billion in FY2019 to $85.09 billion in FY2024, highlighting concerns over stagnant exports amidst rising imports,” GTRI Founder Ajay Srivastava said.

Conversely, it said, trade with the US showed growth, with exports increasing significantly by 47.9% from $52.41 billion to $77.52 billion.

Imports from the US also grew by 14.7%, from $35.55 billion to $40.78 billion. This resulted in an expanded trade surplus for India, which grew from $16.86 billion to $36.74 billion.

According to the Commerce Ministry data, China was India’s top trading partner from 2013-14 till 2017-18 and also in 2020-21. Before China, the UAE was the country’s largest trading partner. The US was the largest partner in 2021-22 and 2022-23.

In 2023-24, the UAE with $83.6 billion, was the third largest trading partner of India. It was followed by Russia ($65.7 billion), Saudi Arabia ($43.4 billion), and Singapore ($35.6 billion).

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

China to nurture stock rally by masking live foreign flows data

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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China is set to switch off a live feed of foreign flows for stocks as early as Monday, the latest policy move to shore up confidence by removing a potential source of negative data.

The Shanghai and Shenzhen exchanges plan to cease displaying real-time figures on purchases or sales of local stocks through trading links with Hong Kong. Instead, the two bourses will provide the turnover details on a daily basis, along with the 10 most-traded stocks via the northbound channel.

While authorities said this aligned with international practices, it also marked an attempt to limit the impact of data showing foreign funds selling on market sentiment. Chinese shares have rallied since the move was announced, an indication that investors have taken it in their stride and are focusing on positive catalysts from attractive valuations to government efforts to ease a housing crisis.

“There are surely some funds out there that factor the short-term flows of northbound investors into their models, so it could lead to a lower trading frequency for some without the real-time data,” said Chen Shi, fund manager at Shanghai Jade Stone Investment Management Co. “But to value investors it doesn’t really matter if they release the figure monthly as intraday is mostly just noise.”

Intraday readings showing foreign outflows were partly blamed for worsening sentiment among Chinese retail investors, who still dominate local trading, during several episodes of intense selloffs over the past year. Some participants had urged the authorities to obscure such figures.

When the two bourses announced their decisions on April 12, they said the changes will take effect “in about a month,” without giving a precise timetable. Shanghai and Shenzhen stock exchange officials in charge of media relations didn’t immediately respond to requests seeking comment.

The Hong Kong Stock Exchange said in a filing on Saturday that the adjustments to market data including real-time turnover and daily quota balance for stock connect will be implemented starting Monday.

The world’s second-biggest stock market has rallied since February, after Beijing introduced a slew of rescue measures from wider trading curbs to purchases by state funds and naming a new head for the securities regulator. The rebound has gained more traction in recent weeks, buoyed by fresh signs of economic recovery and the return of foreign money.

Northbound investors delivered a third straight month of buying on a net basis in April, the longest such stretch in a year which included a record daily purchase. The inflows have continued this month with another 4.8 billion yuan ($664 million), which means overseas funds have added back more than half of what they had sold since August.

While geopolitical tensions, including Washington’s anticipated decision to impose tariffs on Chinese products like electric cars, may again hurt foreign sentiment, global investors’ presence in China’s stock market remains small. In April, the daily average value of onshore stocks traded via the exchange links with Hong Kong accounted for around 15% of the total turnover of the mainland stock markets.

In a sign that Chinese investors have largely shrugged off the upcoming loss of live northbound data, the benchmark CSI 300 Index has risen more than 5% since the change was announced.

“Northbound is not the key flow factor in this market, and the intraday figures are more a reflection of sentiment rather than changes to fundamentals during the day,” said Yang Bo, chief investment officer of Shenzhen Zhuode Investment Management Co. Ending the live feed “should help avoid volatility brought on by these mood swings and is beneficial to the market’s healthy long-term development,” he added.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow