Focus on China — Yuan Companies; The service sector is growing; Q2 job confidence at lowest since 2009
BEIJING: The Chinese yuan strengthened slightly against the US dollar on Thursday as the manufacturing and services sectors returned to growth after the easing of coronavirus curbs, but gains were capped by signs that the strict strategy the country’s “zero-Covid” will remain in place.
The onshore yuan was changing hands around 6.6960 midday, 40 pips higher than the previous session’s close, despite China’s central bank setting a lower midpoint rate.
At the lunch break, the Shanghai Composite index rose 1.3% to 3,405.64 points, while the blue chip CSI300 index gained 1.62% to 4,492.2 points.
Both indexes were set for their best months since July 2020, if the gains hold.
China’s services sector activity in June grows at a faster pace (official PMI)
China’s service sector activity grew at the fastest pace in 13 months after authorities ended a citywide lockdown in Shanghai, an official survey showed on Thursday.
The official non-manufacturing purchasing managers’ index rose to 54.7 in June – indicating the first expansion in activity in four months – from 47.8 in May, according to data from the National Bureau of Statistics.
A reading above the 50 point mark indicates expansion in activity while a reading below indicates contraction.
China’s official composite PMI, which includes both manufacturing and services activity, came in at 54.1, down from 48.4 in May.
Chinese household job confidence in Q2 at lowest since 2009 according to PBOC survey
A Chinese jobs confidence index plunged in the second quarter to its lowest level since the global financial crisis of 2008 and 2009, a central bank survey showed on Wednesday, after severe COVID-19 restrictions took hold. weighed on the economy from April to June.
Nearly 46% of Chinese households think the employment situation remains “gloomy” in the second quarter, said urban depositors surveyed by the People’s Bank of China.
Another indicator of future employment expectations also fell to the worst level since 2009.
As the survey-based unemployment rate in 31 major cities hit a record high of 6.9% in May, Premier Li Keqiang said China would strive to return the economy to a normal path and reduce the unemployment rate as soon as possible, state media said. Tuesday.
Faced with economic uncertainties, more than 58.3% of households are inclined to save rather than spend or invest in the second quarter, compared to 42.4% in the first quarter, according to the PBOC survey.
(Contributed by Reuters)