Is China's Pessimism Ebbing? - Charts of the Week

Understand China's current economic state in 15 charts

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August economic data highlights

China's macroeconomic indicators have recently provided reasons for optimism. In a marked shift, inflation has inched up by 0.1% year-on-year, rising from negative territory from last month. The Producer Price Index (PPI) continues its trend of moderating declines. Since June, the year-on-year drop has been progressively narrowing, with August's figure at -3%, an improvement from the previous month's -4.4%. New yuan loans for August 2023 reached CNY 1.36 trillion, a significant leap from the CNY 0.35 trillion recorded in July.

Consumer confidence continues to recover, and the real estate sector, bolstered by recent stimulus measures, is also witnessing a recovery. (You will see charts on those in today's post).

What lies ahead for China's exports?

Exports from China dropped 8.8% yoy in August 2023, after a 14.5% plunge in July, and better than forecasts of a 9.2% decline. This was the fourth straight month of decline in exports, amid weakening global demand.

Among major trade partners, China’s exports to the US fell by 9.53% from a year earlier, while those to the ASEAN countries, China's largest trade partner, and the EU dropped by 13.25% and 19.58%, respectively. Meanwhile, exports to Russia advanced 16%, after surging 52% in July and a 91% jump in June.

The trend raises eyebrows given that exports have historically been a pillar supporting China's economy, and the shifting global demand and trade partnerships intensify concerns, such as Mexico surpassing China as the U.S.'s primary trading partner.

Job posting data indicates a potential sign of China's export recovery

Recruitment for overseas positions has been recovering since January 2023, pointing towards a possible rebound in exports.

Mexico is becoming a hub for Chinese auto manufacturers

China’s export to Mexico accelerated, particularly following US-China tensions, with substantial indirect intermediate goods being processed in Mexico for re-export to the US.

Read our full story on China's companies going global

• Part I (Merchandise & E-commerce)

Chinese companies going global: merchandise and manufacturing exports in the new era (Part I)

• Part II (Manufacturing ) 

Chinese companies going global: merchandise and manufacturing exports in the new era (Part II)

China's automobile export industry is on the rise. In particular, exports to Russia and Mexico have been growing at a faster rate compared to other major trading partners.

Continue reading to unlock our latest update on:

• China's employment outlook and income expectations: We also cover the latest job demand situation for junior positions, featuring job posting data across major online recruitment platforms in China.

• Domestic consumption and consumer confidence: Track China's consumer pulse with data from Tmall, JD, and Douyin, highlighting current buying trends and the pace of recovery in discretionary spending. August's passenger car sales (including EV sales growth) are also included.

• Real estate: Get briefed on the latest stimulus measures and transaction volumes for existing homes in 82 Chinese cities (up to the first half of September)

*To get a sense of what is offered, you are welcome to check out this older post in the same series: Charts of the Week