Resilient Chinese economy appeals to foreign investors
Foreign investors are becoming more optimistic about the increasingly open Chinese market after acknowledging the stability and resilience of the country's economy.
It is expected that in one or two years, China will attract more global investments.
The Bank of England said in a latest report that driven by domestic and global demand, China's economy secured 6.9 percent growth in the first half of this year, which was higher than expected.
Based on the fourth-quarter growth of last year, the bank believes that China's economy has shrugged off risks in the past two years and begun to stabilize.
Denmark's Danske Bank noted that China's domestic demand for real estate has managed to maintain strong growth under tightened policies, according to a latest report that included in-depth analyses on the tenacity of Chinese economy.
In addition to industrial data, price reversion of staple commodities in June and July, especially metal price, also showed that China's economic growth is driven by tenacity and strong impetus. The rise in price is seen as the result of China's infrastructure construction and steady growth of large-scale enterprises, analysts pointed out.
United Bank of Switzerland said the key to understand the impetus for China's economic growth lies in the fact that the country's domestic credit and loan efficiency have been substantially elevated. The bank thinks China's economic demand has been boosted jointly by the recovery of real estate sector and the rise of exports.
Meanwhile, after iron and steel overcapacity was cut under the supply-side structural reform, more financial resources have been saved to support emerging industries, the bank said. As a result, companies burdened by heavy debts, especially mining companies and raw material providers, started to eye obvious income and profit increase and become less dependent on debts and bank loans.
The bank thinks Chinese local governments are likewise to rely less on debts and bank loans as their finance and means of fund raising have been further disciplined.
Moody's Investors Service recently changed its outlook on China's banking system from negative to stable, saying the improved situation reflects the stabilization of soured debt after China's crackdown on shadow banking.
Andy Seaman, chief investment officer at Stratton Street Capital who has long studied the Chinese market, noted that China's economy is undergoing a positive transformation from investment-led growth to a model increasingly driven by consumption.
During the transformation, though the Chinese government tightened policies, the country's real estate sector and related departments still demonstrated strong tenacity, he continued.
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Kazakhstan turns to high-value added manufacturing with building polyethylene plant it Atyrau region
The Head of State has identified deep processing of hydrocarbons as one of the key areas of development of the oil and gas sector. The priority for our economy is high conversion production producing products with a rapid increase in added value in the technological chain with an export orientation. The added value between the initial feedstock ethane and the third conversion product polyethylene increases 20 times, from $80-90 to $1600-1800 per tonne. The Polyethylene project will certainly give a serious impetus to the development of both the manufacturing industry and the country's economy as a whole. According to experts' calculations, the contribution to the country's GDP by 2030 from the implementation of the project is estimated at approximately 1.2%," Olzhas Bektenov said.
We on the part of the state provide comprehensive support in the implementation of projects important for the country's economy. At the same time, we expect you to increase the share of local content. For this purpose, it is necessary to determine the list of goods and equipment that will be mandatorily purchased from domestic producers. Special attention should be paid to training of Kazakhstani specialists and transfer of competences. It is important for us to maximise the attraction of local personnel, including for management positions in the project. We count on a similar approach in the implementation of other joint projects," Prime Minister emphasised.
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National Bank of Kazakhstan maintains base rate at 14.75%
Annual inflation in February and March continued to decrease, albeit at a slower pace. Inflation expectations have slightly decreased but remain at a relatively high level. The external inflation background continues to be neutral with the ongoing trend of declining grain prices in global markets. Within the domestic economy, inflationary pressure persists due to robust internal demand and unanchored inflation expectations," reads the bank’s official statement.
In the current circumstances, there is still limited room for easing monetary policy. This space will begin to form with the stable reduction of the stable part of inflation," it said.
Monthly inflation slowed down in March to 0.7% after a spike in the previous month (1.1%), forming above the average historical values (0.6%). A similar dynamic is observed for the indicators of core and seasonally adjusted inflation - a significant reduction in March after a sharp acceleration in February," said the bank.
The external inflation background is neutral. The cost of food in global markets in March shows a slight increase, mainly due to rising prices for vegetable oils. Grain prices continue to decline against the background of the realization of the harvested crop in exporting countries and the uninterrupted operation of maritime trade routes," said the bank.
In the European Union, the trend towards slowing inflation continues against the backdrop of the European Central Bank's restrictive policy. Despite expectations of weaker economic growth indicators this year, the ECB remains committed to returning inflation to its target value and intends to maintain restrictive monetary and credit conditions for this purpose," said National Bank Governor Timur Suleimenov in an April 12 statement.
The Federal Reserve notes that inflation in the United States still remains high. In March, the annual inflation rate increased to 3.5%, accelerating for the second consecutive month. According to the Fed's rhetoric, the current monetary and credit conditions will continue going forward. In Russia - a key trading partner of Kazakhstan, inflation in March remained at 7.7%. According to the statement from the Russian regulator, achieving the inflation target involves a prolonged period of maintaining tight monetary and credit conditions," said Suleimenov.
Pro-inflationary risks are conditioned by the continuation of reforms in the area of regulated prices, the consequences of abnormal floods in Kazakhstan, and the uncertainty associated with the volumes of budget expenditures needed for their elimination," the bank said.
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Henkel intends to develop production in Kazakhstan
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Kazakhstan and Finland: Plans to launch 11 new manufacturing projects worth 32.5 billion tenge
By 2027, the woodworking industry plans to launch approximately 11 new productions valued at 32.5 billion tenge, creating 1400 jobs", emphasized the Vice Minister.
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ADB: Kazakhstan's economy to grow 3.8% in 2024, 5.3% in 2025
The prospects for Kazakhstan’s economic development look positive in the medium term," said ADB Country Operations Head in Kazakhstan Iskandar Gulamov.
However, the economy’s dependence on commodities makes such growth volatile-so structural reforms are key to bolstering the country’s economic resilience and sustainability," he added.
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