China’s economic woes deepen as the Hang Seng Index plunges 4% in response to another round of disappointing macro data. The persistent question arises: how long until China resorts to injecting substantial liquidity despite its rapidly escalating debt? Concerns grow over the limited list of quality Chinese stocks, given the government’s authority to cease businesses instantly. Even with claims of China’s 5% annual growth rate, critics argue that the declining trend and poor quality of growth remain troubling. The recent fall in China’s GDP deflator, reflecting a 1.5% decline in Q4 2023, raises recession alarms, with weak consumer confidence and a housing market downturn cited as primary factors. Construction starts plummeting by 50% since early 2021 further emphasize China’s vulnerable economic state.
Wow! The Hang Seng Index is down a whopping 4% today after another round of poor #China Macro data.
How long until China defies gravity and starts adding massive amounts of #liquidity despite its swiftly rising #debt pile? pic.twitter.com/b9KTzQ3Uo9— jeroen blokland (@jsblokland) January 17, 2024
China's GDP deflator, a measure of prices across the economy, fell by 1.5% in Q4 2023.
This marked the third straight quarterly decline and the longest decline since 1999.
Even in the 2008 financial crisis, China only saw 2 quarters of declining prices.
Weak consumer… pic.twitter.com/KzvgyptnfN
— The Kobeissi Letter (@KobeissiLetter) January 17, 2024
Other than that things are fine in China
Chart @MacroKova pic.twitter.com/8zAodS2TCt
— Michael A. Arouet (@MichaelAArouet) January 17, 2024