Beijing's 'worry index' is rising

<p>Kia ora,</p><p>Welcome to Tuesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news the sense of worry in Beijing is clearly rising for a number of reasons.</p><p>But first in the US, it is a public holiday with both the equity and bond markets closed for Martin Luther King Jr Day. The bullion markets are trading however.</p><p>North of the border in their <a href="https://www.bankofcanada.ca/2022/01/business-outlook-survey-fourth-quarter-of-2021/" target="_blank"><strong>Business Outlook Survey</strong></a>, which the Bank of Canada takes seriously, it hit its highest, most expansionary level ever in the December edition just released. It reveals fast-rising demand, capacity constraints and supply-chain issues, strong labour demand and higher pay, and fast-rising costs for which prices are being raised. If Omicron hadn't hit hard after this survey was conducted, the Canadian central bank almost certainly would be raising rates at their upcoming January meeting next week. Now it’s a line-call.</p><p>In Japan, November <a href="https://www.esri.cao.go.jp/en/stat/juchu/2021/2111juchu-e.html" target="_blank"><strong>machinery orders rose faster</strong></a> than expected both on a month-on-month basis (+3.4%) and a year-on-year basis (+11.6%). That says a lot of positive things about global investment intentions.</p><p>In China they <a href="http://www.stats.gov.cn/tjsj/zxfb/202201/t20220117_1826404.html" target="_blank"><strong>reported</strong></a> their Q4 GDP was up +4.0% from the same quarter in 2020, which is much better than anticipated but down from, +4.9% in Q3-2021.</p><p>However, <a href="http://www.stats.gov.cn/tjsj/zxfb/202201/t20220117_1826402.html" target="_blank"><strong>Chinese retail activity</strong></a> struggled in December, rising just +1.7% year-on-year when a +3.7% rise was expected and November was up +3.9%. It's their slowest grow