The leading indicators of the economy are showing signs of decline, indicating that the economy will be bad in the second half of the year. (Image source: Adobe Stock)
[See China News on July 1, 2021](See Chinese reporter Wenlong’s comprehensive report) July 1,Chinese Communist PartyThe government held a warm centennial party celebration event in Beijing,stock marketBut there was a chill, and the Shanghai and Shenzhen stock markets fell together.Also showing signs of decline iseconomicThe leading indicators indicate that the economy will be bad in the second half of the year.
From the video of Chinese state media, it can be seen that on the morning of July 1st, the sky in Beijing, the capital of China, was gray. Tens of thousands of people were sitting on Tiananmen Square in jeopardy. There was not much celebratory atmosphere. During this party celebration, Hu Jintao and Wen Jiabao showed up to participate, but Jiang Zemin and Zhu Rongji did not attend.
The CCP celebrates its centenary birthday. As usual, once there are major official events, such as the two sessions, the stock market will mostly show a beautiful trend. But on July 1, China’s stock market showed a chill. Under the suspicion of economic slowdown, the Shanghai Composite Index, Shenzhen Composite Index, ChiNext Index and other indexes in the Shanghai and Shenzhen Stock Exchanges all fell.
As of the close, the Shanghai Composite Index fell 0.07% to 3,588.78 points; the Shenzhen Composite Index fell 0.97%, the ChiNext Index fell 0.627%, and the Shanghai Science and Technology Innovation Board 50 Component Index also fell 0.53%. Only the Shanghai and Shenzhen 300 Index rose 0.11%, but it fell 0.62% during the session.
Perhaps the official instructed to “maintain stability”, the real estate sector and the banking sector lifted the market, and their gains helped offset the decline of industrial enterprises following the release of weak manufacturing data. Among the worst performing sectors, the industrial sub-index fell 1.53% and the energy sub-index fell 0.74%.
According to a report by Reuters, Wang Zhe, senior economist at the Caixin Think Tank, believes that China’s manufacturing challenges still exist; Wang Qi, CEO of Shicheng Investment (Hong Kong), believes that investors are interested in new energy vehicle manufacturers and supply chain companies. There are still some concerns about industry valuation.
Also showing the downward trend are the leading indicators of China’s economy. China’s official manufacturing purchasing managers’ index (PMI) dropped to 50.9 on June 30, the third consecutive month of slowdown, while the non-manufacturing PMI fell to 50.9. At 53.5, both indexes fell to their lowest in 4 months.
According to a report by the South China Morning Post in Hong Kong, economists said that due to a number of leading economic indicators, China’s economic activity is slowing, coupled with the continued confrontation between China and the United States, and different countries will make large-scale adjustments to their supply chains after the epidemic. , The pressure of China’s economic slowdown in the second half of this year increased.
Lu Ting, chief China economist at Nomura Securities, said that the pressure on China’s economic growth slowdown is expected to increase in the second half of this year, especially in the fourth quarter, mainly due to the weakening of pent-up demand and the shift to service consumption after the restart of the developed market economy. , Leading to weak exports, real estate-related austerity measures have taken effect, soaring prices of raw materials suppress actual demand.
China faced a pandemic last year, and exports played an important role in driving economic growth. However, the new export orders sub-index of the latest manufacturing PMI fell to 48.1, the third consecutive month of decline.
Moreover, soaring freight prices have put pressure on Chinese foreign trade companies to continue to increase. Since last year, the “difficult to find one container” situation in global freight containers has not yet been resolved. The rising freight rates continue to set historical records. The common problems faced by the global industrial chain are still highlighted. The industry generally expects freight rates to remain high throughout the year.
The National Bureau of Statistics of China stated that the contraction of the new export order index has deepened, highlighting the decline in demand for Chinese suppliers in markets such as the United States and Europe after the epidemic has been contained.
Chinese official advisers also issued warnings that it is necessary to maintain the stimulus policies since the outbreak. Liu Yuanchun, vice president of Beijing Renmin University, said that another risk facing China’s trade may come from the continued confrontation between China and the United States and the large-scale adjustment of supply chains in different countries.
Liu Yuanchun said: “The United States initiated the establishment of a democratic supply chain alliance and its containment strategy against China has progressed much faster than we expected. If we do not plan in advance how to expand domestic demand, once the external environment reverses, China’s overall production The gap and overcapacity may be worse than in 2019.”
Li Chao, chief economist of Zheshang Securities, said that China’s exports may face pressure in the second half of this year. Due to the continuous recovery of overseas supply, the rapid growth of exports from South Korea, India, Vietnam and other countries has reduced the space for Chinese exports. The economic slowdown in the fourth quarter may lead to a prudent but slightly relaxed monetary policy.
Editor in charge: Xin He Source: Look at China
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