Oddbean

China misses plenum chance to steady economy before U.S. election ========== China's economy has been successful in withstanding the double whammy of zero Covid and property market collapse. The plenum, a four-day leadership meeting chaired by President Xi Jinping, was the last big opportunity for authorities to put the economy on a firmer footing before the economic impact from November's U.S. election. The government released second quarter economic data on the day the plenum started, revealing the significant decline in the property market. Real estate has been the biggest driver of China's economic growth for many years. Consumer confidence has slumped due to the government's efforts to contain COVID, resulting in retail sales remaining below the pre-pandemic trend. Despite these challenges, the purchase managers' index figures have held up at around 50 and industrial production has been rising. Monetary policy, manufacturing success, and consumption recovery have been the foundations of China's muddle-through. The U.S. election is important as it may impact U.S.-China relations and currency pressures. The plenum was Beijing's last major opportunity to demonstrate that nominal growth won't continue to decline. The most attractive proposal suggested before the meeting was a package of reforms to allow the full urbanization of rural migrants. The plenum decision pledges action to ensure migrant workers "enjoy the same rights" as urban residents. Fiscal support from the central government is needed to back up the promise of equal rights for migrant workers. Such support would give the economy a reflationary push. External changes threaten to end the muddle-through of the last 18 months. #China #Economy #UsElection #Plenum #PropertyMarket #ConsumerConfidence https://asia.nikkei.com/Opinion/China-misses-plenum-chance-to-steady-economy-before-U.S.-election