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Cityscape of the Lujiazui Financial District in Pudong with the Shanghai Tower, the Shanghai World Financial Center, Jinmao Tower, the Oriental Pearl TV Tower and other skyscrapers and high-rise buildings at sunset in Shanghai, China, 1 August 2019
Chinese bears, Indian bulls
It’s been a bad month for Chinese stock markets. Since Jan. 1, the Hang Seng China Enterprises index has plunged 11%, after losing 14% last year. The benchmark CSI 300 index for domestically traded stocks has shed more than 5%, after accounting for the renminbi’s drop against the dollar. A slide that started in 2021 has now erased $6.3 trillion from Chinese and Hong Kong equities, a sell-off that is reshaping geopolitical dynamics in Asia, particularly for India.
Compared to China, India has emerged as a darling of global investors, with indices like the Nifty 50 and BSE Sensex reaching record highs. JPMorgan hails India as its number one market in Asia, crediting companies adopting a “China plus one” strategy. Foreign investment is up, with firms like Apple, Maruti Suzuki, and a host of drug companies increasing production on the subcontinent.
What’s driving the switch?
China’s “economic malaise” has been making headlines for some time. Its real estate sector is in deep crisis, while unemployment and disillusionment among young people are rampant. While Beijing claims the country enjoyed economic growth of 5.2% last year, not all economists believe the numbers. All of which makes investors nervous and looking for other options.
What could this mean for the rest of the world?
While some observers think a slowing economy could temper China's aggressive foreign policy and trade practices, others think it could up the military ante for President Xi Jinping. Economic woes could undermine Xi’s leadership, creating the need for a distraction or rallying point to keep his hold on power. That could spell trouble for some of China’s neighbors such as Taiwan and the Philippines.It could also make it more difficult for China to continue using its Belt and Road Initiative to curry favor with governments in the region. Since 2018, China has committed or invested over $150 billion in the economies of Bangladesh, Maldives, Myanmar, Pakistan, Nepal, Sri Lanka, and Afghanistan, and is now the biggest foreign investor in Maldives, Pakistan, and Sri Lanka. If China’s money runs low, so could its influence – opening the door for rival powers, like India, to fill the vacuum.
This undated file photo shows a researcher wearing cleanroom suit displaying a wafer in the lab of Shanghai Microsemi Semiconductor
Hard Numbers: China’s chip stocks, Black Sea bottleneck, COVID’s transatlantic routine, Indians at the US border
8.6 billion: China’s leading microchip manufacturers lost 8.6 billion in share value on Monday after the US imposed new restrictions on the export of semiconductor-related technologies to China. Remember, 21st-century great power competition is increasingly looking like a bowl of chips.
120: Is the UN-brokered Ukraine grain export deal taking on water? In recent days, the number of vessels waiting to sail to or from Ukrainian ports hit a record of 120. The culprit? Long waits at the Istanbul-based mandatory inspection station set up as part of the deal to assuage Russian concerns that grain boats could smuggle weapons into Ukraine.
8 million: If prior patterns hold, rising COVID cases in Europe right now could herald a fresh wave of the illness in the US this fall and winter. So far, fewer than 8 million Americans have gotten the latest round of booster shots since they became widely available in early September.
16,290: US officials at the southern border have detained a record number of asylum-seekers from an unlikely place this year: India. Since last October, 16,290 of that country’s citizens have been taken into custody at the Mexican border, many of them seeking refuge from persecution based on their religion, caste, or sexual orientation.This article comes to you from the Signal newsletter team of GZERO Media. Sign up today.
A poster by street artist Harry Greb depicting Russian opposition leader Alexey Navalny in Rome.
Hard Numbers: Navalny sentenced (again), oily oceans, Alibaba stock buyback, Ukrainian fundraising star
9: Imprisoned Russian opposition leader Alexei Navalny was sentenced on Tuesday to nine more years in jail after being convicted of fraud and contempt of court. In his closing statement, the top Kremlin critic blasted Vladimir Putin and Russia’s war in Ukraine, urging Russians to protest.
52.8 million: That’s the amount of toxic oily water being dumped annually into the world’s oceans, according to an investigation by Deutsche Welle. The figure is roughly five times the equivalent of the 1989 Exxon Valdez spill in Alaska, one of the worst maritime environmental disasters ever.
25 billion: Alibaba wants to buy back more than $25 billion worth of stock. The Chinese e-commerce giant aims to reassure investors about the company's future despite being targeted by Xi Jinping’s tech crackdown.
380,000: A seven-year-old Ukrainian girl who went viral for singing the Frozen theme song from a bomb shelter in Kyiv performed her country’s national anthem during a concert in Poland. The event, attended by thousands, raised some $380,000 for Ukrainian refugees like her.China vows action over delisting of telcos by US
SHANGHAI • China will take "necessary measures" to safeguard the interests of its companies after the New York Stock Exchange (NYSE) began delisting three Chinese telecom firms that Washington says have military ties, China's Commerce Ministry said.
Ant's mammoth IPO set to be windfall for Hong Kong market
Summer may be over but the financial world is sizzling with a historic debut on Thursday of ground-breaking proportions.
Fits like a glove? Malaysians snap up shares in pandemic
A month into Malaysia's movement control order (MCO), software business owner Ariff Azraai was saddled with a mountain of bills.
Surge in appetite for risk on Bursa Malaysia despite Covid-19-hit economy
KUALA LUMPUR - A month into Malaysia's Movement Control Order (MCO), during which economic activity came to almost a standstill, software business owner Ariff Azraai was saddled with a mountain of bills.
Stocks fall as protesters in Thailand defy ban for 5th day
BANGKOK • More than 1,000 protesters took to the streets in Bangkok yesterday, the fifth day they have defied a government ban aimed at stopping three months of action to demand the ousting of Thai Prime Minister Prayut Chan-o-cha and reforms to the monarchy.