No 886 - This, is China

　　原创

　　BANDSFinancial

　　磐石金融有限公司（ BANDS Financial Limited ）在香港注册成立，是一家持有香港证监会（SFC）2号牌照的期货经纪公司，业务涉及中国以外全球大部分活跃期货及期权市场。

　　Wall Street became the boulevard of broken dreams last night as the three major equity benchmarks traded at levels not seen for over a year, led by the Nasdaq falling to its lowest level since November 2020. However, the real bitterness was contained elsewhere, in the unlikely location of the Chinese trade data published yesterday. Exports increased by 3.9% YoY; the first single-digit growth in 18 months, the slowest increase in nearly two years, and a major reverse from the 14.7% growth in March. Imports were entirely flat. While you might argue, well, it was still up, a positive result considering Covid curbs are limiting factory production and trucking issues are causing port congestion. Let us consider what might have been. In data that was also published yesterday by the People‘s Republic of Taipei. Exports jumped 18.8% YoY beating estimates of a 16.05% rise, reflecting growth in shipments of electronic and information, communication & audio-video products. Meanwhile, imports climbed 26.7% significantly above analyst forecasts of 20.0%, driven by electronic and mineral product imports.While I do not wish to compare apples to lemons, I only wish to make the point that global demand is still there and seems to be an opportunity that is passing China by. The export markets are perhaps 30% of Chinese GDP while housing which is considered to be 40% is also a sector with significant headwinds.The realistic fear of Chinese exporters is that they will be replaced within their markets by re-on shored local production or international competitors. While reconfiguring the eco-system of international transport probably takes longer than they expect. The efforts within those factories that are “whitelisted” to open in Shanghai are extraordinary. Thousands of workers areliving and working within these factories in the “closed-loop management” system, much to the amazement of their European and US counterparts/clients.Anti-covid activity has increased within Shanghai in the last 72 hours. In an article carried by The Paper, Politburo member and Vice Premier Sun Chunlan spoke at a meeting of the Joint Prevention and Control Mechanism of the State Council yesterday. Emphasizing that it is necessary to conscientiously unify thoughts and actions into the spirit of General Secretary Xi Jinping's recent speech. Which was a reference to last week’s meeting of the seven-member Politburo Standing Committee meeting, the highest decision-making body in China, in which Xi commented that the handling of the Covid outbreak in Shanghai, “will stand the test of time,” and pledged to fight any attempt to “distort, question and challenge” the country‘s policies. The meeting record states that China will prevail in the fight against Covid in Shanghai just as it did in Wuhan.Following on, Sun stated that the Joint Prevention and Control committee should implement the decisions of the Party Central Committee and the State Council, to adhere to “dynamic clearing” without hesitation...to create a favourable environment for the successful convening of the 20th National Congress of the Communist Party of China...To improve the sensitivity of monitoring and early warning, big cities should set up testing sites within a 15-minute walk of residential compounds. That they should continue to do a good job in vaccination focusing on the elderly, promoting mutual recognition of nucleic acid test results, and minimising the impact of the epidemic on production and life. Clearly, any change in current policy is not up for discussion.But it’s naive to think it wont work. This, is China.

　　Have a good dayRegards John