Everything is great again for a bit in China after the state number cruncher, China’s National Bureau of Statistics revealed that factory activity hit a decade high in February.
November’s exit ramp leap from zero-COVID was heaps faster and apparently more agile than previously expected and now it looks like the economy is picking up faster than expected too.
So much faster has everything worked out according to the factory numbers that Bloomberg’s Communist Party whisperers say top level officials were a bit un-prepped for success the official messaging is to downplay the previous big talk of big government stimmy.
Ahead of Sunday’s big ‘Xi for President’ inauguration, the Man of the Hour (and the next five to 30 years) Xi Jinping is talking up intensive and wide-ranging reforms of both state and Communist Party organisations, with part of the plan to be presented to the annual meeting of parliament, state media said on Tuesday.
Xi will become China’s first third term president at a silly choreographed rubber-stamping of the parliament which got sorted before Xmas. All that starts this weekend, as does Xi’s outright grip on power.
Xi’s new old gig runs for another five years where he’ll be China’s president, the Chariman of the Chinese Communist Party (CCP) and run the world’s fastest growing military.
Kicking off on Sunday, the NPC should go for a good 10 days and end with an old school Communist fireworks show which will amount to Xi getting endorsed as president, his hellish attempt at a smile and a wave being clapped unendingly by some 3,000 delegates who just cast their votes (a symbolic, futile and perhaps even ironic gesture at Beijing’s Great Hall of the People.
Xi’s all about institutional reforms which China’s docile economy (GDP crept ahead by just 3% in 2022), weakened by Xi’s signature zero-COVID policies, is in desperate need of.
Timing is everything: the official PMIs this week out of Beijing, (the purchasing managers’ index) for manufacturing clipped in at a cracking 52.6 last month, a really cracking gain of 2.5 points on January and headlined by a far-better-than-expected lift across all the various sub-indexes.
Production is a biggie and that jumped 6.9 points to 56.7 and new orders moved from contraction to expansion with a 3.2 point rise to 51.1.
There are also signs of a rebound in offshore demand. The closely watched new export orders jumped oit of the blocks on the way to an almost unheard of 6.3 point rise to 52.4, finally returning to growth (ie: more than 50) after 21 consecutive months in contraction territory.
That last one is perhaps one of the defining streaks of the China’s COVID-19 economy.
Market expectations about the place also showed an improvement. Production and business activity expectations at 57.5 are now at a 12-month high.
Gasp in disbelief
The slow death of the Hang Seng got a repreive this week too.
Hong Kong stocks enjoyed the arre tatse of victory after storming in their first winning week in a month after the PMI punch and Caixin’s services activity PMI also did their bit to restire some glamour to some really shaky trade.
Bao Fan – he’s the banker who dissapeared the week before, has turned up (albeit in custody) and the Hang Seng Index rose 0.7% to end astrong Friday session at 20,567.54 and taking the weekly gains to near 3%.
The Tech Index climbed 2.1 per cent while the Shanghai Composite Index added 0.5 per cent. That follows the start of a tech price war, btw.
Tencent jumped 1.3%. Baidu found 5.3% and Bilibili surged 10% on better than expected Q4 numbers.
The other previous hint of a return to form came late last month via that wholly Chinese institution, Walmart.
Total revenue in the quarter was around 7% the better at $164 billion, driven in no small part by some busy business in Walmart China,.
The fast growing Chinese unit achieved net sales growth of 13.5% and comparable sales growth of 13.3% in the quarter.
Walmart’s actually a relatively reliable sign of a resurgent urban consumer and evidence the goods and retail sector is showing a little spark..
Buildings, so many buildings
Caixin ais reporting China has close to 600 million buildings in the country, according to a survey that has for the first time put a number on the vast amount of construction that exists nationwide.
“Personnel in the housing and urban-rural development sector obtained the data on the number of buildings during China’s first national survey on natural disaster risks,” National Disaster Reduction Committee Secretary General Zheng Guoguang said at a press briefing last week.
He didn’t elaborate on the data. Which is anther way to say this press briefing is over.
Confusion generally reigns around the question of mass oversupply in China’s obscene property sector, but the fact someone’s doing a survey screams ‘we’re going to start mucking about the a new property tax program very, very soon.’
Making matters murky
When the property giant Evergrande – the single most indebted developer in the world – began teetering toward default back in 2021, Beijing responded by having the company wreck its own 40-building resort, as panic escalated around Evergrande’s fascinating US$300 billion worth of debt.
You’ve probably seen some cracking tiktoks, tweets and youtube vids depicting the wonderful decimation of a long succession of Chinese high-rises.
They pretty quickly went all COVID around the internet last week.
Sadly, despite looking amazeballs, AFP sorted out that the footage actually came from a demolition in “China’s Hawaii” of Hainan Island and that was back in 2020 – although similar issues like corrupt local approvals were behind that too.
Sadly most of what you’ve been watching fits the broader theme of what happens to dumb, unwanted or dodgy constructions. Though, as our colleagues at News.com.au point out – at least one was simply a spectacular piece of renovation work for the 2010 Shanghai World Expo.
But China’s still struggling to come to grips with the fallout of the most dramatic property collapse in its boom to bust history. And that means more demolitions are probably in the post.
Residential accommodation sales collapsed some 27 per cent last year. Investment in real estate, however, only fell 10 per cent. And shares in property developers have more than doubled over the past two months.
Making Space Great for the First Time
Xinhua says China plans to expand its space station in near-Earth orbit by launching a new module that will dock with the existing structure and create a cross-shaped combination.
They found that out during a visit to the ongoing exhibition at the National Museum of China.
At the exhibition Xinhua bumped into the (people fr0m, I guess) the China Manned Space Agency (CMSA) which shared to Xinhua its “follow-up plans” after succesfully putting together of the space station’s T-shape structure last year.
The new module, which will function as a node cabin, will have multiple docking ports like the core module Tianhe, allowing the space station to accommodate more spaceships, according to the CMSA.
The CMSA says China plans to extend the in-orbit operation of its space station with a bunch of patches, uploads, updates and upgrades.
More interesting perhaps, the revelation China’s developing of a next-gen, Musklike, reusable crewed spaceship with the capacity to carry up to 7 astronauts and bring back over a payload of some 700 kg of space stuff. China’s existing spaceship can launch 3 astronauts into space and bring back 50 kg of stuff.
The space station will shift its priority from technological breakthroughs in the building stage to the performance of space applications. A slew of experiments is currently underway or poised to begin, in the space station. Some of them are aimed at figuring out how to resist microbes that may damage spacecraft metals, produce oxygen from algae in space, and convert heat energy into electricity.
Xinhua also reports that the in-orbit Chinese astronauts of the Shenzhou-15 crew “successfully obtained 3D structural images of their skin cells with the country’s self-developed two-photon microscope, which is the first of its kind in the world.”
It sounds like a really, really terrific selfie. And it’s good to stay bust because in space no one can hear you scream with boredom.
Mining coal is tougher in China
Finally, it’s hard to reckon with but apparently 6 survivors were somehow taken to Qingtongxia hospital in Inner Mongloia after this happened at an open-pit coal mine in northern China on Thursday last. OS coal can’t get in there soon enough.