Key Highlights from Yesterday's Trading Session (9/11) :
1. China's August CPI Rebounds from July's Negative Territory, Easing Deflation Concerns
Content: In August, China's Consumer Price Index (CPI) increased by 0.1% compared to July's -0.3%, driven by improvements in the Producer Price Index (PPI) from -4.4% to -3.0%. These changes alleviate concerns of deflation, especially as manufacturing PMI readings showed expansion in August. China's export sector is gradually recovering while Beijing implements measures to support the real estate market.
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2. Huawei's Chip Advancements Challenge Global Smartphone Giants
Huawei's latest chip advancements signal a comeback in the smartphone industry. ASML's CEO, Peter Wennick, notes the futility of isolating China's chip industry, which may now innovate faster. With locally sourced chipsets, Huawei aims to re-enter the $500 billion-a-year smartphone market, challenging rivals like Apple and Samsung after its nearly 4-year absence.
3. Beijing Backs Regulated Growth of Metaverse Industry
Beijing, which initially had concerns about the metaverse's potential risks, is now supporting its regulated development. Led by the Ministry of Industry and Information Technology (MIIT), a 3-year plan for metaverse industry innovation has been outlined, recognizing its importance as a key driver of the digital economy. This shift in stance is significant, potentially offering leading companies like Tencent, Alibaba, Baidu, Bytedance (TikTok's owner), and Kuaishou a clearer path for expanding their metaverse businesses and technologies.
4. China Resources Land Sees Sales Recovery
China Resources Land, a major state-backed property developer, reports a sales recovery in August. They achieved RMB 20.29 billion in contracted sales, an 8.9% YoY drop, a significant improvement from July's 38.7% decline. State-backed developers like them are outperforming private developers still grappling with debt and low sales. For example, China Jinmao, a private developer, reported a 69% sales decline in August. While it's uncertain if China's real estate downturn has fully passed, this recovery is noteworthy.
5. China's August Credit Growth Surges, Reflecting Economic Recovery
In August, the People's Bank of China (PBoC) reported a substantial increase in credit growth, with new loans expanding by RMB 1.36 trillion compared to just RMB 346 million in July. This exceeded market expectations of RMB 1.25 trillion in new loans, indicating a robust economic rebound driven by Beijing's efforts to lower interest rates and increase liquidity. While August's data isn't significantly higher than historical levels for the same month, if past trends hold, credit creation is expected to continue growing in the coming months, potentially peaking in January, unless there is unexpected weakness prompting further stimulus measures by Beijing.
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