JGBS: Slightly Mixed, Machine Orders Stronger, Trade Balance In-Line

China’s strong economic performance in H1 puts the annual growth target well within reach and gives officials space to prioritise structural reforms in H2, rather than new macro economic measures, according to Guan Tao, former senior official at the State Administration of Foreign Exchange. While the trade-in programme has delivered notable results, Guan said that efforts to sustainably boost consumer demand require reforms aimed at improving residents’ expectations for permanent income and strengthening overall consumption capacity.

Japan’s Nippon Steel posted a profit of CNY16.9 billion in 2024, exceeding the combined earnings of China’s four largest steel producers, according to Yicai.com. The result highlights the success of Japan in restructuring following the collapse of the real estate bubble in the 1990s and the sharp drop in domestic demand. Nippon, along with South Korea’s Posco, hold a significant share of their domestic markets. In contrast, China’s top ten steel companies collectively account for only about 40% of the Chinese market and continue to compete with largely homogenous products, said Ge Xin, deputy director at the Lange Steel Network Research Center. Amid growing trade restrictions on Chinese exports of finished steel products, mills have ramped up overseas sales of semi-finished steel billets, Ge said, noting that slabs exported to South Korea are priced roughly CNY100 per tonne lower than those produced at local mills.

China’s Inclusive Finance Prosperity Index, which tracks inclusive financial support for small and micro enterprises and the real economy, rose to 49.03 points in June, up 0.07 points from May, an indication that financial backing for the real economy remains steady. Within the index’s business prosperity sub-index, four sectors posted gains, including retail and information services, while five sectors declined, notably construction, transportation, and accommodation and catering. The index is jointly published by the China Economic Information Service, the China Banking Association, and the China Association of Small and Medium Enterprises. (Source: Securities Daily)