China on a knife-edge

<p>Kia ora,</p><p>Welcome to Monday’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 on a knife-edge in its battle to keep Omicron out.</p><p>This year, Chinese New Year, the Year of the Tiger, starts officially on February 1, and then there is are about two weeks of public celebrations until Lantern Festival. And the <a href="http://www.ce.cn/xwzx/gnsz/gdxw/202201/16/t20220116_37260958.shtml" target="_blank"><strong>related travel season</strong></a> is about to start now and will run until the end of February. This year it will be stunted with restrictions around their hosting of the Winter Olympics and the <a href="https://www.yicaiglobal.com/news/china-flight-bans-soar-as-increasing-number-of-travelers-test-positive-for-covid-19" target="_blank"><strong>threat of an Omicron outbreak</strong></a>. It is a nervous time in China as a growing set of travel bans are being imposed. For traders with China, consumption should rise, but logistics problems will be intense as well.</p><p><a href="http://www.stats.gov.cn/tjsj/zxfb/202201/t20220114_1826370.html" target="_blank"><strong>Average new home prices in China's 70 major cities</strong></a> <a href="https://www.cs.com.cn/xwzx/hg/202201/t20220115_6235664.html" target="_blank"><strong>fell in December</strong></a> from November as concerns about property default and tighter policies aimed at driving speculators out of the property market grow. On a year-on-year basis they rose by just +2.6% in December, after a 3.0% gain a month earlier and down from +5% in mid 2021. This was the weakest annual rise in new home prices in five years.</p><p>But there was better news for them on the trade front. <a href="http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/4122124/index.html" target="_blank"><strong>China's trade balance swelled</strong></a> in December as export growth stayed elevated