China clamps down on recession talk

<p>Kia ora,</p><p>Welcome to Tuesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the international edition from Interest.co.nz.</p><p>And today we lead with news China is struggling to regain its economic momentum.</p><p>And perhaps the US is as well. Although not as weak as the May result, the <a href="https://www.dallasfed.org/research/surveys/tmos/2023/2306" target="_blank"><strong>June factory survey</strong></a> by the Dallas Fed in America's oil patch remains weak. Shrinking new orders are the key feature. <a href="https://www.dallasfed.org/research/surveys/bcs/2023/bcs2304" target="_blank"><strong>Loan demand is weak</strong></a>. </p><p>Factory sales rose in Canada in May in <a href="https://www150.statcan.gc.ca/n1/daily-quotidien/230626/dq230626f-eng.htm" target="_blank"><strong>data</strong></a> released overnight. That is their third consecutive rise, and their seventh rise in the past nine months.</p><p>In China, <a href="https://www.cbirc.gov.cn/cn/view/pages/index/index.html" target="_blank"><strong>complaints against banks</strong></a> are rising, and sharply. Most seem to revolve around banks not letting borrowers repay their mortgages early. Chinese households are prioritising savings over consumption as economic uncertainty rises. On the other hand banks stand to lose a lot if large numbers of borrowers repay early. And Beijing is clearly worried about excessive saving and what it is doing to economic activity. In this context, the apparent block against repaying loans early is frustrating borrowers and in some way making the negative sentiment worse.</p><p>And staying in China, we should note that a new article in the <a href="http://www.people.com.cn/" target="_blank"><strong>People’s Daily</strong></a>, the official newspaper of the ruling Communist Party, vows to build efforts to <a href="https://www.scmp.com/economy/china-economy/article/3225430/ai-drive-chinas-new-wave-tech-revolution-industrial-transf