China ignores global concerns

<p>Kia ora,</p><p>Welcome to Friday’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>Today we lead with news China is essentially ignoring COP26, responding to immediate pressures - not the least of which is crowning Xi as an effective emperor.</p><p>But first, it is Veterans Day in the United States and that is a Federal holiday. Equity markets are open but not their bond markets. US Government offices are closed and that means the usual flow of economic data releases there are very light.</p><p>It is a break that will give the Fed policy makers time to reflect on their oft-repeated claim that the current bout of inflation will be "transitory". They first made the claim in April, suggesting that the building pressures would dissipate by Christmas. Clearly that isn't happening. Perhaps they need to change their tune. Markets sense they will.</p><p>In the US it is becoming clear that this year, the 'specials' on offer for the retail events 'Black Friday' and 'Cyber Monday' aren't going to be the discounts - they are going to be that there is something to buy. The supply chain issues are seriously crimping availability.</p><p>In China, Evergrande did make those late interest payments we mentioned yesterday. A German investor filed proceedings, but now they are paid that probably pushes the default risk back somewhat. But other Chinese property developers face the same pressures, the latest Kaisa.</p><p>Chinese property developers’ fundraising slumped at the fastest pace this year in October, even after the government urged financial institutions to meet the real estate sector’s "reasonable funding needs". But their banks are providing more funds for mortgages, and that saw an uptick in residential real estate demand in October, perhaps a lifeline for those developers.</p><p>It is also clear that China isn't signing up to restrictions on its use of coal, despite its 'deal' with the