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Chinese Retail Sales Crumbled In November
Retail sales plunged in China last month, key data out Thursday showed.
While the 5.9% decline was
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With China’s Covid-reopening wave building steam and the US/much of West tightening to fight inflation, 1H23 could see the dreaded “synchronized global slowdown” and that’s where bond and equity investors seem to differ.
Apologies if I’ve already posted these thoughts in another comment.
China has stopped releasing meaningful tracking data on Covid. There is still some realtime data on activity (transit ridership, etc), but not on infections, hospitalizations, or deaths. Anecdotals make it sound like “everyone” in China is getting Covid now, e.g. https://www.bloomberg.com/news/articles/2022-12-16/covid-unleashed-in-beijing-shows-rest-of-china-what-comes-next? If true, that would arguably be bullish as the peak of the surge would then come sooner, pulling China’s recovery forward to 1Q23.
I don’t believe it. Looking at Taiwan’s total (cumulative) Covid cases after it reopened in April. From late April to late May, total cases jumped from about 50K to about 1.5MM, or from ~0% of popln to about 6%. Why should China’s case growth be an order of magnitude higher than Taiwan’s? Even now, 8 months after Taiwan reopened, total cases is only about 35% of popln.
We have watched China in real-time repeatedly cutting off its nose to spite its face. I’d suggest this chapter in Xi’s leadership and China’s evolution began with Alibaba and Jack Ma having to kowtow to the CCP.
In short, Xi and the CCP don’t give a damn what anyone thinks about how they manage their economy. Xi and his gang of CCP leaders, for some reason, are quite happy to roll the dice and see what becomes of Covid, their economy, and their relations with western economies.
In the meantime, Jack and his family live comfortably in Japan. He’s no longer chairman of BABA, and I believe he gave up leadership of Ant Group last summer. But I doubt he lacks significant wealth.
I always liked how he spoke through his actions – much more like a freedom-loving American capitalist than Chinese.
Xi and Putin have the same Achilles Heel- their advisors, from the highest-levels down to the local levels, are afraid to report an accurate portrayal of any situation- if it goes against the leader’s desires and demands. This could be (is?) their downfall.
On the other hand, one of the greatest risks to the western world would be extensive cooperation between China and Russia in an attempt to shut out the West. For example, certain nuclear fission projects in North Dakota are currently on hold due to inability to obtain rare earth metals from Russia.
We’re back to sniffing around crematoriums for the truth. https://www.ft.com/content/73eba78a-1bdb-4b32-be3e-b0329470b946