A year after China lifted its stringent COVID-19 restrictions, the anticipated economic rebound has not materialized, leading to a crisis of confidence among citizens and businesses. Individuals like Jiang, a small business owner in Xi'an, are experiencing worse economic conditions now than during the pandemic. European business executive Joerg Wuttke observes an increased dominance of the Communist Party in business and society, while a high school teacher, Huang Yicheng, became disillusioned with the government following the Shanghai lockdown, leading to his involvement in the White Paper Revolution protests and eventual exile. The real estate sector is particularly struggling, with individuals like Lee Shin facing disappointment even after finally moving into a long-delayed home. The overall mood in post-pandemic China is one of uncertainty and diminished hope for the future.
A strike by nearly 35,000 union members against three major Las Vegas casino operators has been averted after last-minute contract agreements were reached. The unions representing the workers, who had threatened to strike due to failed negotiations for a new labor agreement, reached tentative contracts with Caesars Entertainment, MGM Resorts International, and Wynn Resorts. The agreements include significant wage increases and address concerns about job security amid the introduction of new technology. The strike would have had a major impact on upcoming events crucial to Las Vegas' economic rebound, including the Las Vegas Grand Prix, the National Finals Rodeo, and the Super Bowl.
Asia stock markets weakened as investors in China sold off shares in property developers, remaining skeptical of efforts to revive the mainland real estate market. Hong Kong's Hang Seng Index was down 1.4% as investors retreated from China's troubled property sector. China's authorities have rolled out measures to support the debt-riddled property sector, but stability is still needed for a meaningful economic rebound. E-commerce giant Alibaba Group dropped 3.1% on the surprise departure of its outgoing CEO from its cloud unit. In the United States, the Consumer Price Index for August is expected to rise, and investors are pricing in a 93% probability that the Fed will keep rates at current levels after its next meeting.
China's economic rebound after lifting Covid-19 lockdowns has hit a wall, with recent data showing signs of a slowdown. Despite expectations of a rapid recovery, the dismantling of precautions has not led to the expected revival of the economy, raising concerns about the country's next chapter.
China is expected to see a net loss of 13,500 millionaires in 2023, up from 10,800 in 2022, as the post-COVID economic rebound fizzles, according to the Henley Private Wealth Migration Report. Meanwhile, the US will see a net gain of 2,100 millionaires, up from 1,500 last year. The report also shows that Australia, the United Arab Emirates, and Singapore are among the top gainers of millionaires. The slowing growth of wealth in China, bans on Huawei technology, and worsening international relations are cited as reasons for the trend.
Sri Lanka's central bank surprised analysts by cutting its key interest rates by 250 basis points to 13% and 14%, respectively, from 15.5% and 16.5% previously, signaling that the country was emerging from a devastating financial crisis and ready to focus on growth. The rate cut comes after the key Colombo Consumer Price Index rose 25.2% on year in May from 35.3% in April, reducing some stress on the crisis-hit economy which had crumpled under soaring inflation and its worst financial crisis in over seven decades.
China's consumer prices increased at their slowest pace in two years, rising just 0.1% in April from a year ago, indicating weakness in domestic demand and raising questions about the strength of the economic rebound. The producer price index, which measures factory-gate prices, declined by 3.6%, marking the biggest contraction in three years. Despite the central bank's efforts to bolster the economy, prices are stagnating or falling in the country. The weak property sector recovery likely has exerted “persistent” downward pressure on the factory-gate prices.
The upcoming release of Chinese GDP data is expected to reveal the extent of the country's economic rebound from the pandemic. Market expertise and data analysis will be crucial in interpreting the figures, which will be closely watched by finance professionals.
