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Shanghai’s foreign trade hits record high in 2021

Shanghai’s foreign trade hit a record high of 4.06 trillion yuan (about 640 billion U.S. dollars) in 2021, with a robust year-on-year increase of 16.5 percent, data from Shanghai Customs showed Monday. Last year, the metropolis in eastern China saw exports rise 14.6 percent year on year to 1.57 trillion yuan, while its imports jumped 17.7 percent to 2.49 trillion yuan, which led to a trade deficit of 917.3 billion yuan, said the customs authority. During the same period, the value of imports and exports between Shanghai and the European ...

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German exporters start year in hopeful mood – Ifo

The mood among German exporters brightened considerably in January, with almost all industries expecting growth, the Ifo economic institute said on Wednesday. Ifo’s barometer for export expectations rose to 17.4 points in January, up from 12.9 points in December, hitting its highest level since September last year. “German manufacturing is starting the year in a hopeful mood,” Ifo President Clemens Fuest said in a statement. Source: Reuters

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U.S. new home sales surge to a nine-month high in December

Sales of new U.S. single-family homes jumped to a nine-month high in December, boosted by a severe shortage of previously owned houses on the market. New home sales increased 11.9% to a seasonally adjusted annual rate of 811,000 units last month, the highest level since March, the Commerce Department said on Wednesday. November’s sales pace was revised down to 725,000 units from the previously reported 744,000 units. Sales soared in the densely populated South as well as in the Midwest. They also rose in the West, but tumbled in the ...

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Covid-19 continues to hobble global economy

The strong rebound in GDP across most of the world may prove to be more of a bounce than a movement. Purchasing power, bolstered in many cases by government intervention was strong in 2021. Despite strong product demand, supply chain issues have left factory shelves depleted and driven inflation sky high. In the US, the inflation rate hit 4.6%, the highest of the developed markets, and is expected to remain relatively high at 4.0% in 2022. Eurozone inflation hit 2.5% and is forecast to remain close to this level at ...

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Rate hikes vs quantitative tightening; the ECB’s trade-offs

From full denial to tightening in less than one year? The European Central Bank (ECB) has gone through an enormous change. Within less than half a year, the inflation narrative has changed from calling the inflation surge temporary and warning against too-low and not too-high inflation in the medium run, to a doubling of its 2022 inflation forecasts and a warning against upside risks to price stability. Despite the change in its take on inflation, the ECB is in no position to consider tightening any time soon. Instead, the discussion ...

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U.S. goods trade deficit hits record high; inventories rise strongly

The U.S. trade deficit in goods widened to a record high in December amid a continued rise in imports, suggesting that trade likely remained a drag on economic growth in the fourth quarter. But the report from the Commerce Department on Wednesday also showed an acceleration in the pace of inventory accumulation at retailers and wholesalers, which likely offset the impact on gross domestic product from the larger trade gap. “Strong demand and shifting consumer preferences during the pandemic led to a surge in imports that continues to outstrip exports ...

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Chinese government cuts $174 billion of taxes, administrative fees in 2021, supporting economic revival

China’s reductions of taxes and administrative fees totaled 1.1 trillion yuan ($174 billion) in 2021, strongly supporting the sustained and stable recovery of its economy, a senior official from the State Taxation Administration said on Wednesday. Wang Daoshu, a senior official from the administration, made the remarks during a press conference on tax and fee cuts aimed at promoting economic development, noting that the cuts have strengthened the vitality of market entities and further alleviated the financial burden on business. According to Wang, in 2021, China ramped up financial support ...

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China’s economy faces more negative global trends in 2022; avoiding US errors key: John Ross

China’s 8.1 percent GDP increase in 2021, following on from 2.2 percent in 2020, exceeded that of any other major economy. However, as is well known, China’s year-on-year growth rate fell to 4.9 percent in the third quarter in 2021 and 4.0 percent in the fourth quarter, showing downward economic pressure. Furthermore, China’s economy was aided in 2021 by an exceptionally strong trade performance. China’s annual imports rose in dollar terms by 30.1 percent in 2021 and exports rose by 29.9 percent. There were therefore signs of a slowing of ...

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Eurozone PMI falls but remains well above 50 as supply chain problems ease

The eurozone PMI has held up fairly well during this wave of the pandemic. Remaining comfortably above 50, there is little indication of a contraction like we saw last winter. Still, we are expecting growth to slow further this quarter as catch-up effects fade, restrictions impact services, and supply problems remain an ongoing hurdle. Reduced activity on the back of rapidly rising Covid-19 cases has had an impact on the service sector. With new restrictions in place in the large eurozone economies, activity is dropping in the sectors that are ...

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How Western economic sanctions might target Russia

Tensions between Moscow and Western powers have raised the prospect of new economic sanctions being imposed on Russia if it attacks neighbouring Ukraine. The European Union has threatened “massive” sanctions and U.S. Senate Democrats have unveiled a bill to impose sanctions on Russian government officials, military leaders and banking institutions if Moscow engages in hostilities against Ukraine. Russia, which has massed tens of thousands of troops near Ukraine’s borders but denies planning to invade the former Soviet republic, has been subject to sanctions since its 2014 annexation of Crimea from ...

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China Prioritises Stable Growth; Continued Scrutiny of Private Capital

The shift of China’s top economic goal in 2022 to stabilise growth is likely to moderate concerns over regulatory shocks in the corporate sector as the government refines industry policies to avoid economic disruptions, says Fitch Ratings. Strict supervision and scrutiny of private capital, however, is likely to become a new norm, with the aim of directing capital to the state-encouraged areas. China’s politburo required regulators at all levels to ensure smooth running of the economy in 2022 at December’s Central Economic Work Conference, which outlines the government’s top economic ...

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Facing uncertainties, sticking to zero-COVID policy remains China’s best strategy: epidemiologists

The world has been fighting the COVID-19 pandemic for two years, and the initial fear of the unknown virus has now morphed into yearning for a return to normalcy. That is why The Lancet paper indicating that the end of the pandemic is near picked up steam and got scientists into a heated debate about the possibility of China ending the epidemic this year. Yet the end of the pandemic seems an unlikely scenario when the more contagious coronavirus variant Omicron has driven cases in the US and Europe and ...

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The Fed keeps us guessing on the future of a digital dollar

Fed chair Jerome Powell had originally announced a central bank digital currency (CBDC) discussion paper for Summer 2021, but agreeing on the text took the Fed Board just a little longer. Instead of positioning itself in favour of or against CBDC in this paper, the Fed provides a neutral overview of money, digital assets and the potential pros and cons of a CBDC. The Fed does provide a clear list of conditions that a “digital dollar” should satisfy: • Its benefits should outweigh costs and risks; • Said benefits should ...

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Stars align for eurozone wage growth rebound

Everyone in Frankfurt and beyond is looking at the labour market to see whether second-round effects of the current inflation shock are already visible in the data. We, and the European Central Bank (ECB), don’t see evidence of that so far as the ECB’s index for negotiated wages actually reached its lowest wage growth figure in decades in 3Q21 (1.3% year-on-year). If the labour market is a lagging indicator, however, wage developments are the mother of all lagging indicators. Looking ahead, we expect wage growth to significantly accelerate in 2022 ...

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China’s recovery contributes to global economy

China recently released its major economic indicators in 2021, with the GDP reaching 114.37 trillion yuan ($18 trillion), which is a year-on-year increase of 8.1%, beating expectations. The growth rate was much higher than the world average of 5.5% in 2021. Among others, China’s foreign trade of goods totaled 39.1 trillion yuan ($6.05 trillion) in 2021, increasing 21.4% yearly. Moreover, its imports and exports exceeded the $6 trillion threshold for the first time. Meanwhile, foreign direct investment broke all previous records, with the actual amount of foreign investment used in ...

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