Social unrest surfaces in China

<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 of growing and spreading unrest in China, even in some key cities.</p><p>But first, the Americans finished their Thanksgiving Day holiday, and then turned their attention to shopping. It looks like the huge Black Friday retail event won't have quite the impact it once did, but it will still be important and markets will react to retailer sales reports. <a href="https://www.bloomberg.com/news/articles/2022-11-25/black-friday-deals-bring-small-crowds-for-us-retailers" target="_blank"><strong>Early indications are not auspicious</strong></a>. However online shopping has hit <a href="https://www.reuters.com/business/retail-consumer/adobe-says-black-friday-online-sales-hit-record-9-bln-2022-11-26/" target="_blank"><strong>a record for the day</strong></a> in nominal terms at least.</p><p>As we forecast a few days ago, China has <a href="http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/4721642/index.html" target="_blank"><strong>pulled the trigger</strong></a> on lowering its bank reserve ratio requirements (RRR) by -25 bps, effective from December 5th, releasing around CNY ¥½ tln in long-term liquidity (NZ$110 bln) in an attempt to boost economic activity. It follows a similar move in April. The RRR for big banks now stands at 11%, the lowest since mid-2007 while the weighted average ratio for financial institutions stands at 7.8%. Authorities also said they aim to "keep liquidity reasonably ample".</p><p>China's industrial profits were <a href="http://www.stats.gov.cn/tjsj/zxfb/202211/t20221125_1890633.html" target="_blank"><strong>officially reported</strong></a> to be -3% less in October than a year ago, a slightly steeper decline than in September. However they say SOE profits rose +1.1%; while those in the private sector fell -2.1%. It is unclear how overall results cou