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First Post
2 days ago
- Business
- First Post
China beats forecast with 5.2% growth in April-June quarter, experts decode what it means
Even as China beat expectations to grow 5.2% in the April-June quarter, experts pointed out that retail sales and investment remained lower than expected, but industrial output was surprisingly positive. They said the economy's future trajectory is now up to Chinese policy support and developments in the tariff war. read more People make their way at Ameyoko shopping district in Tokyo, Japan, May 20, 2022. REUTERS/Kim Kyung-Hoon/ File China's economy grew at a slightly faster pace than expected in the second quarter, showing resilience in the face of US tariffs, though analysts warn of intensifying headwinds that will ramp up pressure on policymakers to roll out more stimulus. Data on Tuesday showed China's gross domestic product (GDP) grew 5.2 per cent in the April-June quarter from a year earlier, slowing from 5.4 per cent in the first quarter, but just ahead of analysts' expectations in a Reuters poll for a rise of 5.1 per cent. STORY CONTINUES BELOW THIS AD Key points Q2 GDP +5.2 per cent year on year (forecast +5.1 per cent, Q1 +5.4 per cent) Q2 GDP +1.1 per cent quarter on quarter (forecast +0.9 per cent, Q1 +1.2 per cent) June industrial output +6.8 per cent year on year (forecast +5.7 per cent, May +5.8 per cent) June retail sales +4.8 per cent year on year (forecast +5.4 per cent, May +6.4 per cent) H1 fixed asset investment +2.8 per cent year on year (forecast +3.6 per cent, Jan-May +3.7 per cent) H1 property investment -11.2 per cent year on year (Jan-May -10.7 per cent) Market Reaction China's blue-chip CSI300 Index reversed course to trade flat, while Hong Kong's benchmark Hang Seng cut gains after the data came in. The CSI 300 index was down 0.1 per cent, while the Hang Seng was up 0.7 per cent. Ben Bennett, Head of Investment Strategy for Asia, L&G Asset Management, Hong Kong 'Retail sales and investment were lower than expected, but industrial output surprised positively, so policymakers will likely be happy with the overall outcome. Some investors might be disappointed that this doesn't signal the need for more immediate stimulus. U.S. tariffs remain a major headwind, but Chinese policymakers won't feel the need to offset this if economic growth remains strong.' More from World Just weeks before Air India crash, UK regulator flagged fuel switch issues in Boeing jets: Report Lisheng Wang, China Economist, Goldman Sachs, Hong Kong 'With H1 real GDP growth averaging 5.3% y/y, we do not think policymakers have the urgency to launch broad-based, significant stimulus at the July Politburo meeting. Instead, we expect incremental, targeted easing to help stem the property downturn and mitigate labour market pressures in H2.' Alex Loo, Macro Strategist, TD Securities, Singapore 'Market reaction was more muted as it was a mixed slate of data… Focus now shifts to the July Politburo meeting which will convene on economic issues. We expect the discussion to be centred on the property sector after a string of poor housing data and different onshore media leaks that revolved around potential property stimulus. 'We doubt new fiscal stimulus is on the agenda given the remarkable economic growth in H1 and officials will likely prefer to be on a wait-and-see mode and monitor trade developments after the August U.S.-China truce deadline.' Shane Oliver, Chief Economist, AMP, Sydney 'Overall, it's OK, it's just enough to keep the economy growing around the target pace of 5%. The economy is growing, but it's not fantastic, but it's still growing and I think from a policy point of view, authorities will continue to do just enough to keep it ticking over and will not do more.' STORY CONTINUES BELOW THIS AD Tony Sycamore, Analyst, IG, Sydney 'It's not a bad number. I mean it's a lot better than where we thought things were gonna be back in April, but in terms of retail sales, just a little bit of a miss there. Combined with the CPI number we saw last week and the balance of trade, it's probably not going to upturn the apple cart too greatly today. 'Probably it looks like the Chinese economy is still muddling through. And I like the fact that the deflationary spiral last week looks like ended with that better inflation data that we saw.' Christopher Wong, Currency Strategist, OCBC, Singapore 'The Chinese economic and growth data was mixed, with industrial production surprising to the upside despite persistent property sector weakness. There was only modest impact on the yuan, partly reflecting policymakers' intent to pursue stability in the yuan. The focus next will be on details of China's policy support and tariff developments.' STORY CONTINUES BELOW THIS AD Dan Wang, China Director, Eurasia Group, Singapore 'Industrial production remains the key growth driver, but it's highly automated and doesn't generate jobs. Q3 growth is at risk without stronger fiscal stimulus. Consumption is weaker than expected — momentum from the trade-in programme has faded, and housing remains a drag with low transaction volumes. '(U.S. President Donald) Trump's tariffs hit exporters hard, triggering SME bankruptcies and damaging sentiment. Both consumers and businesses have turned more cautious, while exporters are increasingly looking overseas for growth.' Jeff Ng, Head of Asia Macro Strategy, SMBC, Singapore 'The market reaction was quite muted because of the fact that expectations were already there for China to grow by more than 5%. 'Growth has been supported by front-loading… (but) I think we're still staring at a slowdown once the tariffs come into fruition. 'The domestic economy and retail sales, of course, it'll still be dragged by concerns. The sentiment isn't that great, but at least I see some signs of it bottoming out.' STORY CONTINUES BELOW THIS AD Background US. President Donald Trump's global trade war has added a significant new layer of risk for China's economy, which has been struggling to mount a solid recovery due to a prolonged property crisis, deflationary pressures and low consumer confidence. The world's second-biggest economy has so far avoided a sharp slowdown this year due partly to a fragile U.S.-China trade truce and policy support measures. China's exports regained some momentum in June while imports rebounded, as firms rushed out shipments to capitalise on the tariff truce between Beijing and Washington ahead of a looming August deadline. Beijing has ramped up infrastructure spending and consumer subsidies, alongside steady monetary easing. In May, the central bank cut interest rates and injected liquidity as part of broader efforts to cushion the economy from Trump's trade tariffs. But analysts say stimulus alone may not be enough to tackle entrenched deflationary pressures, with producer prices in June falling at their fastest pace in nearly two years. China has set an ambitious 2025 growth target of 'around 5%', though the trade war with the United States has already prompted many analysts to sharply downgrade their GDP forecasts for this year. For the whole of 2025, China's GDP growth is forecast to cool to 4.6% - falling short of the official goal - from last year's 5.0% and ease further to 4.2% in 2026, according to a Reuters poll. (This is an agency copy. Except for the headline, the copy has not been edited by Firstpost staff.)
Straits Times
06-06-2025
- Politics
- Straits Times
US military's logistics drill aims to burnish East Asia crisis response
U.S. Navy aircraft carrier USS George Washington is pictured during Freedom Edge trilateral exercise among United States, Japan and South Korea in the East China Sea, south of the Korean peninsula and west of Japan's main islands November 14, 2024. REUTERS/Kim Kyung-Hoon/File Photo TAIPEI - Drills in East Asia this summer by the U.S. military body charged with moving munitions and equipment will help it better coordinate and communicate with allies in response to a crisis, its commander said on Friday. Alarmed by growing Chinese assertiveness, whether in the disputed South China Sea or around Chinese-claimed Taiwan, Washington and its friends in the region have been drilling together regularly. The U.S. Transportation Command, or TRANSCOM, is responsible not only for coordinating the pre-positioning of weapons and other equipment around the world by land, air and sea, but also for resupply in the event of conflict. On a visit to East Asia, TRASNCOM Commander Randall Reed, told reporters it was essential to maintain and expand ties in the region so as to ensure a swift U.S. response to disasters and counter threats to peace and security. "We're going to have a series of exercises and will test the current logistics architecture and infrastructure which provides sustained freedom of manoeuvre," he said on a teleconference, without giving further details of location or timing. "We're seeking to demonstrate our ability to rapidly mobilise, then deploy forces from within the United States to locations throughout the region here," Reed added, describing the aim of one exercise, Mobility Guardian. The tasks will permit testing of tactics, techniques and procedures with allies and partners and enhance connectivity, he said. "It will help us deepen relationships and work together even more closely than we already are to bolster regional security." On his trip, Reed has visited Japan and the Philippines and will go to South Korea, all treaty allies of the United States. The militaries of the Philippines and the United States have sailed together in the South China Sea for a seventh time to boost interoperability between the two sides, Manila's armed forces said on Thursday. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Japan Today
28-05-2025
- Business
- Japan Today
Asia boosts weapons buys, military research as security outlook darkens
FILE PHOTO: A mock model of the FFM "Upgraded Mogami" class is displayed during the Defence Security Equipment International (DSEI) Japan at Makuhari Messe in Chiba, east of Tokyo, Japan May 21, 2025. REUTERS/Kim Kyung-Hoon/File Photo By Greg Torode and Jun Yuan Yong Spending on weapons and research is spiking among some Asian countries as they respond to a darkening security outlook by broadening their outside industrial partnerships while trying to boost their own defense industries, a new study has found. The annual Asia-Pacific Regional Security Assessment released on Wednesday by the London-based International Institute for Strategic Studies (IISS) said outside industrial help remains vital even as regional nations ultimately aim for self-reliance. "Recent conflicts in Ukraine and the Middle East, coupled with worsening U.S.-China strategic competition and deterioration of the Asia-Pacific security landscape, may lead to a rising tide of defense-industrial partnerships," it read. "Competitive security dynamics over simmering flashpoints ... feed into the need to develop military capabilities to address them." Spending on defense procurement and research and development rose $2.7 billion between 2022 and 2024, it showed, to reach $10.5 billion among Southeast Asia's key nations of Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. The spike comes even as the nations spent an average of 1.5% of GDP on defense in 2024, a figure that has kept relatively constant over the last decade. The study, released ahead of this weekend's annual Shangri-La Dialogue defense meeting in Singapore, said Asia-Pacific nations still rely on imports for most key weapons and equipment. Such items range from submarines and combat aircraft to drones, missiles and advanced electronics for surveillance and intelligence gathering. The informal Singapore gathering of global defense and military officials is expected to be dominated by uncertainties stemming from the protracted Ukraine conflict, Trump administration security policies and regional tension over Taiwan and the disputed busy waterway of the South China Sea. Saudi Arabia and the United Arab Emirates are increasingly active and making inroads, the study said, though European companies have a prominent and expanding regional presence, via technology transfer, joint ventures and licenced assembly deals. The UAE now operates a diversified network of collaborators, such as China's NORINCO weapons giant and rival India's Hindustan Aeronautics. Joint development operations are not always easy, the study said, offering lessons from India's two-decade collaboration with Russia to produce the BrahMos supersonic anti-ship missile. While the feared weapon is fielded by India, exports have been hampered by lack of a clear strategy, with deliveries to its first third-party customer, the Philippines, starting only in 2024, the study added. Closer Russia-China ties could further complicate the weapon's development, particularly if Moscow chooses to prioritize ties with Beijing to develop a hypersonic version of the missile. © Thomson Reuters 2025.
Japan Today
21-05-2025
- Business
- Japan Today
Japan flexes defense ambitions at arms show
A mock model of an upgraded Type-12 SSM is displayed during the Defence Security Equipment International (DSEI) Japan at Makuhari Messe in Chiba, east of Tokyo, Japan May 21, 2025. REUTERS/Kim Kyung-Hoon By Tim Kelly Japan opened one of its largest-ever arms shows on Wednesday in a display that Defense Minister Gen Nakatani said marked the pacifist nation's deepening push for overseas defense cooperation and weapons exports. The DSEI Japan exhibition near Tokyo showcased Japanese missiles, warships and research into lasers and electromagnetic railguns. The event, double the size of the 2023 show, drew 471 firms from 33 countries, including 169 from Japan — twice as many as two years ago, according to organizer Clarion Defense & Security. "I sincerely hope that this exhibition will provide a new opportunity for cooperation and exchange between national delegations and companies, help sustain defense industry development, drive innovation and promote peace and stability," Nakatani said during a speech at the event. Japan has been gradually stepping back from the pacifism that was the cornerstone of decades of defense planning after the country's defeat in World War Two. It lifted a military export ban in 2014, and is taking its first steps into global defense cooperation encouraged by the United States and European partners eager to share development costs and tap Japan's industrial base. "Strength comes from expanding and elevating the alliance's capabilities and capacity, which means leveraging our respective skills and our specialties in co-development, co-production, and co-sustainment," U.S. Ambassador to Japan George Glass said as he opened the DSEI U.S. pavilion. Amid threats from China, North Korea and Russia, Japanese firms have become more willing to seek out military business. "Our foundation goes back over 70 years with industry here. That's with the big and large heavy industry players, which makes sense, but we're seeing that now at multiple tier levels, tier one, tier two companies, even startups," said William Blair, the regional chief in Asia and India for Lockheed Martin, which supplies F-35 stealth fighters, air defense radars and other equipment to Japan. Japan's partnerships in Europe include the Global Combat Air Program (GCAP) jet fighter project with Britain and Italy. "With today's increasingly uncertain security environment, I believe we must respond not just domestically, but with a broader international perspective," said Katsuyuki Nabeta, a general manager at the defense and space unit of Mitsubishi Heavy Industries (MHI), which is leading the Japanese portion of that advanced fighter project. "We are pleased to have the opportunity to showcase our technologies and reach a wider audience, he added at the company booth next to a model of the Mogami warship it wants to sell to Australia. © Thomson Reuters 2025.
The Star
14-05-2025
- Business
- The Star
Asian markets swing as China-US trade euphoria fades
Workers walk past a stock quotation board showing Nikkei share average outside a brokerage in Tokyo, Japan, May 13, 2025. REUTERS/Kim Kyung-Hoon HONG KONG: Asian stocks fluctuated Wednesday (May 14), with investors struggling to track a strong day on Wall Street as euphoria over the China-US trade detente petered out. But while the days of breathtaking volatility seen through April appear to be over for now, analysts warned that more work was needed for Washington to reach tariff deals with countries and instill a sense of stability. Data showing US inflation unexpectedly slowed last month provided some cheer, though observers pointed out that the real impact of Donald Trump's "Liberation Day" tolls will not likely be felt until May's readings. The US president on Tuesday played up a deal with Beijing. "We have the confines of a very, very strong deal with China. But the most exciting part of the deal... that's the opening up of China to US business," he told Fox News. His remarks were made aboard Air Force One as he headed off on his Gulf tour, with Saudi Arabia on Tuesday pledging US$600 billion worth of US investments in a range of sectors from defence to artificial intelligence. The agreements -- including a huge chip deal for Nvidia and Advanced Micro Devices -- would boost US jobs, and the stock market is "gonna go a lot higher", Trump said, citing an "explosion of investment and jobs". The tech-rich Nasdaq rallied with the S&P 500, which broke back into positive territory for the year, helped slightly by the inflation data. But Asia struggled to extend the rally. Hong Kong, Seoul, Jakarta and Taipei rose more than one per cent but Wellington and Manila were flat, while Tokyo, Shanghai, Sydney and Singapore fell. Oil, which had enjoyed a four-day rally on demand optimism and Trump's warnings to Iran over a nuclear deal, also edged down. Analysts said that while the China deal was welcome, investors were now bracing for the next developments in the US president's trade standoff with the world as countries look to strike deals with the White House to avert stiff tariffs. "Remember it's an armistice not a peace treaty -- and the tariffs are still at these levels worse than we had before," Neil Wilson at Saxo Markets said. "Let's be honest, the market knows this script by heart: Trump escalates. Markets tumble. Back-channels open. China blinks. A deal gets made. Risk rallies," added Stephen Innes at SPI Asset Management. "The fog has lifted -- for now. Whether this cycle brings more sustainable upside or just sets up the next tantrum remains to be seen," he said. Still, the dialling down of tensions with China saw JPMorgan Chase predict the US economy would grow this year, reversing its earlier forecast for a contraction caused by the tariffs. Investors are also awaiting the release of earnings from Chinese tech titans Alibaba and Tencent, which could provide an idea about how the market heavyweights are coping with the trade upheaval and uncertainty in the world's number two economy. - AFP
