China struggles to find way forward

<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>Today we lead with news that the big news is the 'no news' out of China where they left their benchmark interest rates unchanged, torn between defending the yuan, and shoring up their property sector.</p><p>But first in the US, the <a href="https://www.chicagofed.org/research/data/cfnai/current-data" target="_blank"><strong>National Activity Index</strong></a> (NAI) produced by the Chicago Fed slipped negative in October even though the prior month was revised to a stronger expansion. It was the weakest reading in four months, and another indicator the giant American economy is slowing, although it was not the sharp decline some were expecting.</p><p>Still, commercial banks in the US have been <a href="https://www.federalreserve.gov/data/sloos/sloos-202210.htm" target="_blank"><strong>tightening their lending standards</strong></a> recently, and this may have as much impact on their economic expansion as the Fed's own tightening.</p><p>One company <a href="https://www.nytimes.com/2022/11/21/business/beyond-meat-industry.html" target="_blank"><strong>really struggling</strong></a> is fake-meat heavyweight, Beyond Meat.</p><p>In Taiwan, they reported sharply weaker <a href="https://www.moea.gov.tw/Mns/dos_e/bulletin/Bulletin_En.aspx?kind=14&html=1&menu_id=6744&bull_id=10178" target="_blank"><strong>export orders</strong></a> for October (-6.3%), way weaker than they were expecting (-1%). Countering that however was a commensurate fall in the Taiwanese currency.</p><p>In China, they kept benchmark interest rates unchanged for a third straight month yesterday, holding off on cuts that could risk dragging down the yuan, though some question how long this will continue. Policymakers there are torn between defending a weak yuan and doing what is necessary to protect their property market from a sudden