Thailand’s 2019 foreign tourists up 4%; China virus, strong baht a risk By Reuters



By Orathai Sriring

BANGKOK (Reuters) – Thailand saw slower growth of foreign tourist arrivals of 4.2% last year and the outlook for a lucrative industry is weighed by strength in the baht and China’s new coronavirus at a time of faltering economic growth.

Tourist receipts account for about 12 percent of Southeast Asia’s second-largest economy, making it one of the most important drivers of growth for an economy that has lagged most regional peers for years.

Foreign tourist arrivals hit a record 39.8 million last year – equivalent to more than half of Thailand’s population – after a rise of 7% to 38.2 million in 2018, when a boat accident killed dozens of Chinese tourists, tourism ministry data showed.

Tourist revenue had risen 3% to 1.93 trillion baht ($63.49 billion) in 2019.

Visitors from China, Thailand’s biggest source of tourists, increased by 4.4% to 10.99 million in 2019.

The growth in foreign arrivals had slowed and missed a government target, and industry operators have blamed that on the strong baht, Asia’s top performer last year.

The baht rose nearly 9% against the U.S. dollar and about 11% against China’s yuan last year.

(GRAPHIC – Thailand’s overall foreign tourists and Chinese arrivals: https://fingfx.thomsonreuters.com/gfx/mkt/13/1492/1467/Thailand’s%20foreign%20tourists.png)

The Tourism Council of Thailand last week forecast less than 5% growth in overall foreign tourist numbers this year.

Kasikorn Research Centre on Friday predicted the number of Chinese tourists may fall 0.5%-2.0% this year, rather than the 1.6%-3.5% increase projected earlier.

China’s coronavirus has added to the concerns. Thailand on Friday confirmed its fifth case of the virus and Saturday’s start of the Lunar New Year holiday is expected to bring an influx of Chinese travelers.

“The outbreak of coronavirus is a risk. The strong Thai baht may also affect tourism growth,” said Tim Leelahaphan, economist of Standard Chartered (LON:).

“That is unlikely to help an already-slowing economy,” he said adding he expected the central bank to cut its policy rate by a quarter point in the first quarter.

The Bank of Thailand (BOT) cut the key rate twice in 2019, taking it to a record low of 1.25%. It will next review monetary policy on Feb. 5.

The BOT forecast economic growth of 2.8% this year, slightly picking up from an estimated 2.5% in 2019, a 5-year low.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



China virus death toll rises to 41, more than 1,300 infected worldwide By Reuters



By Judy Hua and Se Young Lee

BEIJING (Reuters) – The official death toll from the coronavirus in China jumped on Saturday to 41 from 26 a day earlier, as local media reported a doctor on the frontline of the battle to contain the virus in Wuhan city had died.

More than 1,300 people have been infected globally, as health authorities around the world scramble to prevent a global pandemic.

Doctor Liang Wudong, 62, at Hubei Xinhua Hospital in Wuhan, the city where the virus first appeared and which is in virtual quarantine, died from the virus, China Global Television Network reported in a tweet.

It was unclear if his death was already counted in the official toll of 41, 39 of which were in the central Hubei province.

The total number of confirmed cases in China now stands at 1,287, the National Health Commission said in a statement on Saturday.

The virus has also been detected in Thailand, Vietnam, Singapore, Japan, South Korea, Taiwan, Nepal, France, the United States and Australia.

Australia on Saturday announced its first case of coronavirus, a Chinese national in his 50s, who had been in Wuhan and arrived from China on Jan. 19 on a flight from Guangzhou. He is in a stable condition in a Melbourne hospital.

“Given the number of cases that have been found outside of China and the significant traffic from Wuhan city in the past to Australia, it was not unexpected that we would get some cases,” Australia’s Chief Medical Officer Brendan Murphy told a news conference.

“This is the first confirmed case. There are other cases being tested each day, many of them are negative, but I wouldn’t be surprised if we had further confirmed cases.”

French authorities reported Europe’s first confirmed cases on Friday evening.

The U.S. Centers for Disease Control and Prevention said on Friday it had 63 patients under investigation, with two confirmed cases, both in people who had traveled to Wuhan. Human-to-human transmission has been observed in the virus, which health authorities believe originated in a market in Wuhan that traded illegally in wildlife.

The World Health Organization (WHO) declared the new coronavirus an “emergency in China” this week but stopped short of declaring it of international concern.

Wuhan, a city of 11 million, is in virtual lockdown. Nearly all flights at the airport have been canceled and checkpoints block the main roads leading out of town. Authorities have since imposed similar lockdowns on more than 10 cities near Wuhan as part of the ongoing containment effort.

As Wuhan slides into isolation, pharmacies have begun to run out of supplies and hospitals have been flooded with nervous residents. The city is rushing to build a 1,000-bed hospital by Monday, state media said.

Hubei’s health authority said on Saturday there were 658 patients affected by the virus in medical care, 57 of whom were critically ill.

The newly-identified coronavirus has created alarm because there are still many unknowns surrounding it, such as how dangerous it is and how easily it spreads between people. It can cause pneumonia, which has been deadly in some cases.

Symptoms include fever, difficulty breathing and coughing. Most of the fatalities have been in elderly patients, many with pre-existing conditions, the WHO said.

NEW YEAR DISRUPTIONS

Airports around the world have stepped up screening of passengers from China, though some health officials and experts have questioned the effectiveness of such screenings and of the lockdown.

Health officials fear the transmission rate could accelerate as hundreds of millions of Chinese travel at home and abroad during week-long holidays for the Lunar New Year, which began on Saturday.

As China scrambles to contain the outbreak some sections of the Great Wall near Beijing will be closed from Saturday.

Beijing’s Lama Temple, where people traditionally make offerings for the new year, has closed, as have some other temples and the Forbidden City, the capital’s most famous tourist attraction.

Shanghai Disneyland will close from Saturday. The theme park has a 100,000 daily capacity and sold out during last year’s Lunar New Year holiday.

Film premieres have been postponed and McDonald’s suspended business in five cities in Hubei province.

Shanghai has shut down all cinemas during the Lunar New Year holidays, which last until Jan. 30, the Liberation Daily said on its online channel on Saturday.



Global stocks steady as caution on China virus continues; euro hits seven-week low after ECB By Reuters


© Reuters. An investor uses his mobile phone in front of a stock quotation board at a brokerage office in Beijing

By Tomo Uetake

TOKYO (Reuters) – Stocks made a barely positive start in early Asian trade on Friday after the world’s health body called it a little too early to declare a coronavirus outbreak a global emergency.

But worries over rapid spread of the deadly virus kept investors on guard as millions of Chinese travel during the Lunar New Year holiday period.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose a marginal 0.1%, while Japan’s stood flat and Australian stocks added 0.4%.

Trade in Asia is already slowing down for the Lunar New Year holiday, with financial markets in China, Taiwan and South Korea closed on Friday.

Key indices on Wall Street bounced from lows after the World Health Organisation (WHO) said the latest coronavirus did not yet constitute a global public health emergency.

The rose 0.2% to a record closing high, while the added 0.1% and the eased 0.1%.

The WHO called a new coronavirus that has killed 18 people in China and infected around 650 globally “an emergency in China” on Thursday, but stopped short of declaring the epidemic of international concern.

“Investors are worried that the outbreak of coronavirus will dampen consumption in China when the Chinese economy has been already cooling down,” said Yasuo Sakuma, chief investment officer at Libra Investments.

In the currency market, the concerns about the virus supported the yen.

The Japanese currency traded at 109.53 yen per dollar, having risen to a two-week high of 109.26 on Thursday.

The euro fell to a seven-week low versus the dollar of $1.1036 overnight after the European Central Bank left its policy rates unchanged but President Christine Lagarde struck a slightly dovish tone than some had expected.

Coronavirus fears continued to weigh on commodity prices.

U.S. West Texas Intermediate (WTI) crude futures were up a marginal 0.05% at $55.61 a barrel, after hitting $54.77 in the previous session, the lowest level since Nov. 20.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



U.S. Agriculture Secretary says no need for more farm aid after China trade deal By Reuters



By Mark Weinraub

AUSTIN, Texas (Reuters) – With China poised to increase purchases of U.S. agricultural goods this year as part of a Phase 1 China trade deal, the U.S. Agriculture Secretary said on Monday there is no need for a third year of trade-related aid for farmers.

Farmers have increasingly relied on aid from the U.S. government to survive during the past two years as exports have lagged throughout the U.S.-China trade war. But USDA Secretary Sonny Perdue said China will soon begin buying U.S. farm goods to meet the $40 billion in agricultural purchase agreements it made, alleviating growers’ need for more aid.

China, which typically buys the bulk of its U.S. agriculture products during the fall and early winter, will likely change the timing of its purchases, Perdue said.

“If China is going to achieve that, and we believe they are, we think they have to buy earlier than the traditional export season from the United States,” said Perdue, speaking at the American Farm Bureau Federation’s annual convention.

His remarks came one day after U.S. President Donald Trump addressed the convention, promising farmers that the deal will be good for them.

Washington and Beijing signed the pact on Jan. 15, though tariffs on major U.S. farm exports have not been removed and structural economic differences were not addressed.

Perdue said the third tranche of a $16 billion aid package announced in May will be paid to farmers “imminently,” but that they should not expect a 2020 aid package.

China bought roughly 60% of U.S. soybean exports before the trade war and also was a major buyer of sorghum, dairy and pork.

Chinese Vice Premier Liu He said Chinese firms will buy American products, “based on market conditions,” raising doubts that the country will meet its commitments under the pact.

Growers are used to dealing with seasonality in the export program and could afford to wait without fresh trade aid, said Lane Osswald, 44, a farmer from Eldorado, Ohio.

“Everyone is prepared for the South American harvest to hit the market every year,” Osswald said.Soybean futures have dropped 1.3% since the trade deal was signed.

The China deal, and the recent passage of the United States-Mexico-Canada Agreement, will allow farmers to prosper, Perdue said.

Trump gained support among American farm families at the end of 2019, Reuters/Ipsos poll data showed, as Trump touted the trade deal ahead of its signing. Farmers broadly voted for Trump in 2016.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



As China seeks to spark night economy, on-demand chauffeurs for drunk drivers see surge By Reuters



By Colin Qian and Thomas Peter

BEIJING (Reuters) – It was freezing and the streets were slick as substitute driver Liu Pengfei bade farewell to his mother, wife and son before riding into Beijing on his tiny scooter.

Liu, 33, and his fellow drivers make their living getting drunk people safely home. And with Beijing urging restaurants, entertainment venues and public transportation to extend hours in a bid to boost consumption, Liu’s clients on DiDi Chuxing, China’s biggest ride-hailing service platform, have multiplied.

“My orders after midnight have grown a lot, and a third more of my customers are asking me to drive them to the next entertainment spot instead of going home,” Liu said. “(Our) business makes the most money in the later half of the night.”

His rates triple after midnight.

The high payoff has lured Liu to travel 20km (12 miles) from his home in nearby Hebei province daily. He earned 12,000 yuan ($1,742) a month on average last year. In some months, he raked in nearly 19,000 yuan, more than two times the average Beijing salary.

He and other drivers hang around night spots – less than 100 meters (100 yards) away, 12 men at a table were gorging on meat and downing beer – and when hired, use their clients’ own cars to drive them home.

The drivers check their phones as they wait, ready for their first customer of the night to contact them through a mobile app.

It is too soon to say whether extending opening hours of malls, creating food streets, and putting on late-night cultural performances will boost China’s consumption, with the economy still languishing at near 30-year lows. But on-demand drivers seem to be one early beneficiary.

Data from DiDi shows night-time orders for drivers increased 20% in Beijing’s central business district last year compared with a year earlier. In other cities like Dongguan, Changsha and Zhengzhou, orders jumped even more, as much as 50%.

Liu said he sees his business as promising, and plans to stick with it for the next few years.

But, inevitably, family life suffers.

“Some weekends, my son would hug my leg when I leave, crying and asking me to play with him,” Liu said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Gold Rebounds as China Deal Doubts Grow; Palladium Smashes Record    By Investing.com


© Reuters.

By Barani Krishnan

Investing.com – It seems difficult to keep down gold more than a day with the back-and-forth speculation of the success of the U.S.-China deal. More interestingly, it’s seems impossible to push down palladium, which hit record highs again Friday on supply concerns.

for February delivery on New York’s COMEX settled up $3.10, or 0.6%, at $1,560.30 per ounce. For the week, it was flat.

, which tracks live trades in bullion, was up $7.91, or 0.5%, at $1,560.45. For the week, it was down 0.1%.

Gold prices initially fell after China agreed to purchase at least $200 billion worth of U.S. goods over the next two years under the phase one deal signed on Wednesday between Chinese Vice Premier Liu He and U.S. President Donald Trump.

But as the days progressed, analysts have questioned the potential success of the deal and the chances of the trade war recurring with both nations keeping much of the tariffs they had imposed on each other prior to the agreement.

“Following a noteworthy positioning squeeze, the yellow metal is creeping higher once again,” TD Securities said in a note. “Along with positive expectations for growth comes the potential for inflation to creep higher, and without a commensurate Fed response, this would translate into lower real rates.”

The Federal Reserve cut rates by a quarter percent point for three months back to back in 2019, before bringing that easing cycle to a halt in December. With U.S. economic data mostly upbeat now, analysts do not expect the central bank to embark on a new round of cuts unless the trade war recurs.

jumped a whopping $177, or 7.7%, to $2,490 per ounce. It earlier hit an all-time high of $2,539.31.

were up up $77.45, or 3.6%, at $2,255.25, after touching a record high of $2,298.35.

Palladium led gains across commodities in 2019, with a 55% gain. It is up more than 28% year to date.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



China will increase imports from U.S. according to ‘market principles’: official By Reuters



BEIJING (Reuters) – China will negotiate with American companies and increase imports of U.S. goods and products according to market principles, an official with its state planner said on Sunday.

The United States has high quality supply in the fields of energy, manufactured goods, agricultural products, medical care and financial services, said Meng Wei, spokesperson for China’s National Development and Reform Commission (NDRC), at a press conference on Sunday.

China will boost purchases of U.S. goods and services by $200 billion over two years in exchange for the rolling back of some tariffs under an initial trade deal between the world’s two largest economies.

Chinese Vice Premier Liu He, who signed the trade deal with U.S. President Donald Trump earlier this week, said the deal would not affect “third parties’ interests”, apparently in reference to deals made with other suppliers of farm goods.

Chinese companies will import U.S. agricultural goods according to consumers’ need, and demand and supply in the market, Liu told reporters, according to CCTV.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Oil Treads Water as Traders Wonder If China Will Meet Trump’s Demands By Investing.com


© Reuters.

By Barani Krishnan

Investing.com – Two days after the so-called landmark deal, oil traders are wondering if China will really fulfill its energy purchases under the phase one deal. Crude prices settled slightly up Friday but was unable to shrug off losses on the week amid worries the trade war could be back if Beijing falls short of its deal with President Donald Trump.

New York-traded , the benchmark for U.S. crude, settled up 2 cents at $58.54 per barrel. Despite the higher lose and Thursday’s 1.2% rebound, WTI still ended the week almost 1% down.

London-traded , the global crude benchmark, settled up 23 cents, or 0.4%, at $64.85. For the week, it rose 0.2%.

After a 36% gain for WTI and 24% for Brent in 2018, oil prices have swung this month, surging on a heightening of U.S.-Iran tensions, then slumping on a huge build in U.S. fuel stockpiles.

Wednesday’s phase one lift lifted oil bulls’ spirits again, as China committed on paper to buying at least $50 billion in energy purchases, including crude oil, over the next two years. Yet, with both sides maintaining tariffs they had imposed on each other prior to the deal, analysts have wondered how the step up in U.S. exports to China will be possible.

“It also remains to be seen how China’s existing suppliers would react to losing market share in the world’s top crude importer,” Clyde Russell, analyst at Refinitiv, said. “Would they simply roll over, or, more likely, try to protect their market share while going after U.S. customers outside of China?”

China’s biggest oil suppliers, historically, have always been from the Middle East, led by Saudi Arabia, which is the third-largest crude producer after the United States and Russia.

Further weighing on crude prices Friday was the weekly oil rig count published by industry firm Baker Hughes, which showed drillers adding 14 rigs this week to bring to 673 the total number across U.S. oil fields. A higher rig count, in the simplest sense, means higher crude production. Over the past three weeks, the rig count had fallen, extending last year’s drop of 208.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Indexes hit new highs on strong U.S., China economic data


FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., January 9, 2020. REUTERS/Brendan McDermid

NEW YORK (Reuters) – Wall Street’s major indexes climbed to record highs on Friday after strong U.S. housing data and signs of resilience in the Chinese economy raised hopes of a rebound in global growth.

The Dow Jones Industrial Average .DJI rose 49.44 points, or 0.17%, to 29,347.08, the S&P 500 .SPX gained 12.6 points, or 0.38%, to 3,329.41 and the Nasdaq Composite .IXIC added 31.81 points, or 0.34%, to 9,388.94.

Reporting by Noel Randewich; Editing by Chris Reese



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China posts weakest growth in 29 years as trade war bites, but ends 2019 on better note


BEIJING (Reuters) – China’s economic growth cooled to its weakest in nearly 30 years in 2019 amid a bruising trade war with the United States, and more stimulus is expected this year as Beijing tries to boost sluggish investment and demand.

But data on Friday also showed the world’s second-largest economy ended the rough year on a somewhat firmer note as a trade truce revived business confidence and earlier growth boosting measures finally appeared to be taking hold.

As expected, China’s growth slowed to 6.1% last year, from 6.6% in 2018, data from the National Bureau of Statistics showed. Though still strong by global standards, and within the government’s target range, it was the weakest expansion since 1990.

This year is crucial for the ruling Communist Party to fulfill its goal of doubling gross domestic product (GDP) and incomes in the decade to 2020, and turning China into a “moderately prosperous” nation.

Analysts reckon that long-term target would need growth this year to remain around 6%, though top officials have warned the economy may face even greater pressure than in 2019.

More recent data, along with optimism over a Phase 1 U.S.-China trade deal signed on Wednesday, have raised hopes that the economy may be bottoming out.

Fourth-quarter GDP rose 6.0% from a year earlier, steadying from the third quarter, though still the weakest in nearly three decades. And December industrial output, investment and retail sales all rose more than expected after an improved showing in November.

Policy sources have told Reuters that Beijing plans to set a lower growth target of around 6% this year from last year’s 6-6.5%, relying on increased infrastructure spending to ward off a sharper slowdown. Key targets are due to be announced in March.

On a quarterly basis, the economy grew 1.5% in October-December, also the same pace as the previous three months.

“We expect China’s growth rate will come further down to below 6%” in the coming year, said Masaaki Kanno, chief economist at Sony Financial Holdings in Tokyo.

“The Chinese economy is unlikely to fall abruptly because of … government policies, but at the same time the trend of a further slowdown of the economy will remain unchanged.”

SIGNS OF IMPROVEMENT, BUT WILL IT LAST?

December data released along with GDP showed a surprising acceleration in industrial output and a more modest pick-up in investment growth, while retail sales were solid.

Industrial output grew 6.9% from a year earlier, the strongest pace in nine months, while retail sales rose 8.0%. Fixed-asset investment rose 5.4% for the full year, but growth had plumbed record lows in autumn.

Easing trade tensions have made manufacturers more optimistic about the business outlook, analysts said, though many of the tit-for-tat tariffs both sides imposed during the trade war remain in place.

“Despite the recent uptick in activity, we think it is premature to call the bottom of the current economic cycle,” Julian Evans-Pritchard and Martin Rasmussen at Capital Economics said in a note.

“External headwinds should ease further in the coming quarters thanks to the ‘Phase One’ trade deal and a recovery in global growth. But we think this will be offset by a renewed slowdown in domestic demand, triggering further monetary easing by the People’s Bank.”

Among other key risks this year, infrastructure — a key part of Beijing’s stabilization strategy — has remained stubbornly weak.

Infrastructure investment grew just 3.8% in 2019, decelerating from 4% in January-November, despite sharply higher local government bond issuance and other policy measures.

“This shows that local governments continued to face funding constraints…,” said Tommy Xie, China economist at OCBC Bank in Singapore.

A girl runs past a man as he smokes in Beijing’s central business area, China January 17, 2020. REUTERS/Jason Lee

Some analysts are also worried about signs of cooling in the housing market, a key economic driver.

Property investment growth hit a two-year low in December even as it grew at a solid 9.9% pace in 2019. Property sales fell 0.1%, the first annual decline in five years.

Beijing has worked for years to keep speculation and home price rises in check, and officials vowed last year they would not use the property market as a form of short-term stimulus.

MORE SUPPORT MEASURES

China will roll out more support measures this year as the economy faces further pressure, Ning Jizhe, head of the Statistical bureau told a news conference.

Ning noted that per capital GDP in China had surpassed $10,000 for the first time last year. But analysts believe more painful reforms are needed to generate additional growth.

Beijing has been relying on a mix of fiscal and monetary steps to weather the current downturn, cutting taxes and allowing local governments to sell huge amounts of bonds to fund infrastructure projects.

Banks also have been encouraged to lend more, especially to small firms, with new yuan loans hitting a record 16.81 trillion yuan ($2.44 trillion) in 2019.

The central bank has cut banks’ reserve requirement ratios (RRR) – the amount of cash that banks must hold as reserves – eight times since early 2018, most recently this month. China has also seen modest cuts in some lending rates.

Analysts polled by Reuters expect further cuts in both RRR and key interest rates this year.

But Chinese leaders have repeatedly pledged they will not embark on massive stimulus like that during the 2008-09 global crisis, which quickly juiced growth rates but left a mountain of debt.

Slideshow (7 Images)

Containing financial system risks will remain a high priority for policymakers this year. Corporate bond defaults hit a new record last year, while state-linked firms had to step in to rescue several troubled smaller banks.

Even with additional stimulus and assuming the trade truce holds, economists polled by Reuters expect China’s growth will cool this year to 5.9%.

Reporting by Kevin Yao; Editing by Kim Coghill



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