It’s black Monday in China. At 7:10 am Italian time, the Hang Seng loses 4.25%, reaching its lowest since 2016, Shanghai 2.10%, while the Nikkei rises by 0.6%. Gold retraced 0.4% to $ 1,977 per ounce, while US WTI oil left 2.52% at $ 106 a barrel. The euro travels little moved, the yen drops 0.4% to 117.8, while the US T bond, in the week of the Fed meeting sees the yield rise from 2% to 2.04%. Futures on Wall Street (S&P 500) are positive by 0.75%.
Two issues have brought China down: on the one hand, the data on loans for February, in sharp decline and below expectations, on the other, the fear of a delisting of Chinese companies listed in the US due to the geopolitical tensions over the war in Ukraine, which they see Beijing very close to Russia. To this we must add the lockdowns imposed by the government on Hong Kong and now also on Shenzhen.
On the tech topic, today the Chinese cyberspace regulatory authority issued a new series of draft measures with the aim of protecting minors, asking online gaming platforms and live streams to create a “youth mode” for minors. . Loans to households, mostly mortgages, suffered a rare case of contraction last month to 336.9 billion yuan, up from 843 billion yuan in January, indicating continued weakness in the housing market, a major driver of economic growth (accounts for approximately 28% of GDP).
Meanwhile, Russia has asked China for military equipment to support the invasion of Ukraine, a US official said, raising concerns in the White House that Beijing could undermine efforts to help Ukrainian forces defend their country. . US National Security Advisor Jake Sullivan, who is meeting with China’s top diplomat Yang Jiechi in Rome today, warned that Beijing will “absolutely” pay the consequences if it intends to help Moscow evade Western-imposed sanctions.
China has locked down 17.5 million Shenzhen residents for at least a week, trying to stop a growing Covid-19 outbreak after virus cases nationwide doubled to nearly 3,400 over the weekend. Bloomberg writes that the restrictive measures will be accompanied by three rounds of tests throughout the city. A flare-up of the virus in Shanghai has also seen most schools return to online classes given the restrictions placed on city travel. In Hong Kong, the government explained that around 300,000 people are in solitary confinement or quarantine.
Chinese banks disbursed new loans of 1.230 billion yuan ($ 195 billion) in February, down sharply from a record of 3.98 trillion in January and below analysts’ expectations, according to data released by the People’s Bank of China. PboC). A decline in February was expected as Chinese banks tend to anticipate loans at the start of the year to gain market share. Analysts interviewed by Reuters had predicted that new yuan-denominated loans would drop to 1.490 billion, but the final tally was even lower than the 1.360 billion yuan in February 2021, when the economy was recovering from the pandemic-induced crisis.
“Credit growth was much weaker than expected last month, reversing much of the acceleration seen earlier,” Julian Evans-Pritchard of Capital Economics wrote in a statement. “This suggests that more easing measures will be needed to achieve the policy goals that were recently defined at the National People’s Congress.” Loans to households, mostly mortgages, contracted a rare 336.9 billion yuan in February.
Ting Lu, Nomura’s Chinese chief economist, explained that this sharp decline in medium- and long-term household lending was the first since the sector data began to be released in 2007 and in line with a 40% contraction. of the sales of new homes of the top 100 real estate groups in the two-month period January-February. Loans to businesses fell to 1.240 billion yuan from the previous 3.360 billion yuan. (All rights reserved)

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