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Chinese Growth Back On Track


China’s credit continued robust growth in September, a sign that government efforts to funnel loans to businesses could lead to further recovery from the coronavirus-induced slump. The increase signals stronger economic expansion for the third quarter, a top central banker said. China’s newly added social financing, a measurement of funds the real economy receives from the financial system, came in at 3.48 trillion yuan ($520 billion) in September, down slightly from 3.58 trillion yuan in August but up by 963 billion yuan year-on-year, central bank data showed Wednesday. Banks offered 1.9 trillion yuan of new loans in the month, up 48.4% from August and exceeding analysts’ expectations. China’s third-quarter GDP growth report is expected to show improvement from the previous quarter, said Ruan Jianhong, head of the central bank’s statistics department, at a news conference.
China’s consumer inflation slowed to a 19-month low in September as growth in pork and other food prices eased, and factory-gate prices contracted at a faster-than-expected pace due to weaker oil prices, official data showed Thursday. The consumer price index (CPI), which measures changes in the price of a basket of consumer goods and services, rose 1.7% year-on-year last month, narrowing from 2.4% growth in August, data (link in Chinese) from the National Bureau of Statistics (NBS) showed. The reading was slightly lower than the median estimate of 1.8% growth in a Caixin survey (link in Chinese) of economists. The producer price index (PPI), which gauges changes in the prices of goods circulated among manufacturers and mining companies, fell 2.1% (link in Chinese) year-on-year last month, NBS data showed, slightly steeper than the 2% drop in August and the median estimate of a 1.8% decline in the Caixin survey.
A rare mega deal by a Chinese airline is set to revive the country’s convertible bond market after volatile trading dried up issuance of the popular securities. China Southern Airlines Co. Ltd. opened subscriptions Thursday for 16 billion yuan ($2.4 billion) of its convertible bonds, the largest deal for a nonfinancial enterprise since China Petroleum & Chemical Corp., better known as Sinopec, sold 23 billion yuan of the notes in early 2011, according to data compiled by Bloomberg. The sale is also the biggest in a year and a record for the airline sector in China. Just eight deals were priced in September, the fewest since May. The source of the recent Covid-19 outbreak in China’s major northeastern port city of Qingdao may trace to two dock workers who tested positive and were treated in the hospital where the cluster of infections appeared, according to people close to the matter.
The two dock workers tested positive in screening at the Dagang Branch of Qingdao Port International Co. Ltd. and were reported Sept. 24 as asymptomatic. They had handled imported frozen seafood, in some samples of which the Covid-19 virus was detected. But local health officials said later large-scale testing didn’t find new cases.Director of Qingdao Health Commission suspended after Covid-19 outbreak
China went on a record buying spree of Japanese bonds over the summer months, snapping up $20.9 billion of the low-yielding debt to spur talk that it’s diversifying reserves. The 2.2 trillion yen of purchases, made from June to August, are a record in local currency terms for a three-month period based on data from Japan’s Ministry of Finance going back to 2005. 
The last time Chinese buyers went on a similar splurge was in 2016. The eye-catching investments into low-yielding Japanese debt may be driven by a few factors, according to JPMorgan Chase & Co. strategists.
China over the past three years has imposed annual limits on the volume of foreign coal it was willing to import. Australia’s BHP Group Ltd.’s Chinese customers have asked the mining company for relief from coal purchase contracts in the wake of Beijing’s move to crack down on foreign coal imports. The requests for deferral come amid uncertainty over whether China is seeking to limit purchases of foreign coal of all origins, or whether Australian mining companies are being specifically targeted under an extension of geopolitical trade tensions. BHP chairman Ken MacKenzie said he would be concerned if Australian coal were being discriminated against. ‘‘We understand there may be some new developments relating to how China plans”.

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