China Macroeconomics Monthly Recap

June 4 – China's non-manufacturing purchasing managers index was 55.2 in May, down 0.9 percentage points from the previous month as a result of slowing exports and property sales, according to joint figures from the National Bureau of Statistics and the China Federation of Logistics and Purchasing.

May 31 – Offshore investment by Chinese companies will total $500 billion by the end of 2015, up from $320 billion presently, the Ministry of Commerce estimated. Chinese companies currently have $1.6 trillion in assets and employ 1.2 million people overseas

May 31 – Foreign institutional investors injected $660 million into and directed $40 million away from Chinese financial institutions in Q1 2012, figures from the State Administration of Foreign Exchange show.

May 29 – European companies are losing their confidence in China as they believe they will not be fairly treated in this increasingly competitive market, according to a survey by the European Chamber of Commerce. However, 74% of respondents said they were optimistic about China's economic performance and admitted it has become their most important market.

May 28 – China's industrial profits declined 1.6% year on year to ¥1.45 trillion in the first four months of 2012, the National Bureau of Statistics said. Industrial profits made by state-owned enterprises were down 9.9% to ¥457.8 billion and industrial profits made by foreign-funded firms were down 13.2% to ¥340.6 billion during the quarter. The contraction was a little faster than in the first three months.

May 22 – Morgan Stanley revised down its forecast for China's economic growth by half a percentage point to 8.5% this year after April economic data turned out much weaker than expected. The US investment bank also predicted two interest rate cuts, each of 25 basis points, by the end of this year.

May 22 – China's government has ordered this year's major infrastructure project plans be submitted for approval by the end of June and will speed up reviewing them and issuing budgets ahead of schedule, a person familiar with the matter told the China Securities Journal. It is also likely that construction on some infrastructure projects originally slated to kick off in 2013 will begin this year, the source said.

May 21 – The central government will prioritize economic growth and spur consumer spending by adopting an active fiscal policy and a prudent monetary policy, premier Wen Jiabao said, without mentioning concerns about inflation, which eased a bit in April. The remarks imply upcoming stimulus plans as well as more bank loans and public works, economists argue.

May 21 – China will work to speed up approvals of qualified foreign institutional investors (QFIIs) looking to buy into its domestic securities, as part of reforms to add depth to the country's capital markets, Bloomberg reported, citing the nation's foreign exchange regulator, which has already accelerated approvals for long-term foreign investors and more than doubled quotas for QFIIs to $80 billion. China is mulling amendments to QFII rules to lower entry requirements, broaden the investor types and relax restrictions on quotas and investment scopes.

May 18 – China's state-owned enterprises posted ¥12.72 trillion in revenues and ¥669 billion in gross profits in the first four months of 2012, up 12.4% and down 8.6% respectively from the same period a year ago, according to the State-Owned Assets Supervision and Administration Commission. It was the third consecutive month gross profits saw a year on year drop.

May 18 – Revenue from China's express mail services rose 37% year on year to ¥29.35 billion, China Post said. The industry delivered 1.45 billion parcels during the period, up 46% from a year earlier.

May 16 – China's direct offshore investment will likely grow 17% annually to $150 billion by the end of 2015, the Ministry of Commerce said. The nation's non-financial investment surged 72.8% year on year to $23.16 billion in the first four months of 2012.

May 15 – Foreign direct investment in China dropped 0.7% year on year to $8.4 billion in April, marking the sixth consecutive month of decline, the Ministry of Commerce said. In the first four months of 2012, the nation's FDI fell 2.4% from a year earlier to $37.88 billion.

May 14 – The leaders of China, Japan and South Korea have agreed to start negotiations on a free trade pact to fend off the fallout from the global financial crisis. The talks are expected to be very tough. The three countries were responsible for a combined 19.6% of the world's economic output, and their trilateral trade was worth $690 billion last year.

May 11 – Fixed asset investment in China rose 20.2% year on year to ¥7.56 trillion in the first four months of 2012; the rate was 0.7 percentage points slower than in the first three months, the National Bureau of Statistics said. Fixed asset investment in the primary sector was up 40.7% to ¥166.6 billion; fixed asset investment in the secondary sector was up 24.2% to ¥3.38 trillion; fixed asset investment in the tertiary sector was up 16.4% to ¥4.02 trillion.

May 10 – China's bilateral trade grew 2.7% year on year to $308.08 billion in April, where exports were up 4.9% to $163.25 billion and imports were up 0.3% to $144.83 billion, generating a $18.43 billion surplus, according to customs figures. The trade surplus was much bigger than the $5.35 billion recorded a month earlier as imports grew slower than estimated following Europe's debt problems and a domestic slowdown.

May 10 – One-third of Chinese businesses want to grow by merging with and acquiring others companies in the next three years, lower than the 45% in 2011 and higher than the 26% in 2010, according to a survey by Grant Thornton China. Up to 43% of respondents had no idea how and from where they would get funding, well above the 23% last year, indicating the uncertainty over financing amid the economic slowdown.

May 9 – China is still the most attractive destination for foreign investment, followed by India and the US, an Ernst & Young report found, after interviewing 1,500 corporate executives in February and March across 57 countries, including 85 from China. The report also advises China to take advantage of Europe's debt crisis to acquire local businesses.

May 7 – The contracts signed at this year's China Import and Export Fair (also known as the Canton Fair), the largest event of its kind in the country, declined 5% from the previous fair to $36.03 billion, the lowest level in the past three years, as Europe's debt crisis and bleak US recovery pared down demand for Chinese goods. The number of European buyers and their combined amount inked shrank 15.5% and 5.6% respectively. The amount of deals sealed by US buyers fell 8.1%. In comparison, the total amount of contracts signed by the Brics nations and African country's rose 4.1% and 13.5% respectively.

May 4 – China exported $14.47 billion worth of produce and imported $25.87 billion worth of produce in Q1 2012, up 5.6% and 29.5% respectively from the same period a year ago, according to customs figures. This resulted in a $11.4 billion surplus during the period, up 81.5% year on year.

May 3 – China's gross wage jumped 24.4% year on year to ¥1.53 trillion in 2012, according to the National Bureau of Statistics. Gross wage paid by state-owned enterprises was up 15.3% to ¥751 billion during the period.

May 3 – China's non-manufacturing purchasing managers' index shed 1.9 points from a month earlier to 56.1 in April due in part to a lackluster real estate market, the National Bureau of Statistics said.

April 28 – China's 2,400–plus publicly traded firms reported a combined ¥1.94 trillion net profit in 2011, up 11.6% from the previous year. The rate was well below 2010's 37.3% growth from 2009.

April 27 – China's industrial profits declined 1.3% year on year to ¥1.04 trillion in Q1 2012, the National Bureau of Statistics said. Industrial profits made by state–owned enterprises were down 12.4% to ¥317.2 billion and industrial profits made by foreign–funded firms were down 12.6% to ¥251.5 billion during the quarter. The contraction eased from the first two months.

April 27 – China's current account surplus, the broadest measure of its trade balance, fell sharply from $60.5 billion in Q4 2011 to $24.7 billion in Q1 2012 as a result of a weaker export sector, according to figures from the State Administration of Foreign Exchange. The nation's export value rose just 7.6% between January and March, well below the 20.3% for the whole of last year.

April 27 – China's logistical fees grew 12.2% year on year to ¥1.9 trillion in Q1 2012; the rate was 5.7 percentage points slower than a year earlier, the China Federation of Logistics and Purchasing said. Output from the logistics industry expanded 10.8% to ¥800 billion during the quarter, accounting for 7.3% of GDP and 16% of the service sector.