Market Intelligence: Possible positive twist in China
Our latest Market Intelligence newsletter, published on October 8, raises the possibility of some better news from China, although it comes with two caveats.
China’s central government has introduced a series of measures to support regional economic growth across the country. It will provide earlier-than-planned access to bonds for local government funding specifically to inject some momentum into regional economies.
Market Intelligence says that, in addition to a rise on stock markets, there may be a swift reaction among buyers in China of raw material for leather manufacturing.
Following this, there are hopes that production of leather and finished leather production could increase too, if consumer demand picks up.
The caveats are that it may take six or even 12 months for the positive effect of these funding measures to flow through to the leather value chain, and also that the benefits may be short-lived.
“We need a strong increase in the dynamics of production in Asia,” the newsletter says, adding that there are more fundamental challenges facing the economy China. It describes these issues as “very deep-rooted and structural in nature”.
Image: The Peninsula Arcade in Beijing.
