Chinese economic momentum leaks away

<p>Kia ora,</p><p>Welcome to Monday’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 inflation is high in the US and Europe, but growth is leaking away in China.</p><p>China's <a href="http://www.stats.gov.cn/tjsj/zxfb/202110/t20211029_1823995.html" target="_blank"><strong>official PMIs</strong></a> remained in a stall in October. The factory survey showed retreating conditions, and marginally weaker than for September. Their services sector is still expanding but this was a small downgrade too. Overall it is a bit of a sorry story, hampered by high costs, energy shortages, a resurgent pandemic in some northern provinces, and a difficult transition to cleaner operating conditions. It is a clear momentum downgrade.</p><p>However Evergrande has made a second overdue bond interest payment late on Friday, late but not so late as to trigger default. It seems to be successfully buying time to organise its finances and negotiate with creditors. But it is one thing to make interest payments; it is quite another to repay the bond principal amounts none of which are due quite yet.</p><p>In contrast, in Japan <a href="https://www.esri.cao.go.jp/en/stat/shouhi/shouhi-e.html" target="_blank"><strong>consumer confidence</strong></a> rose again in October continuing its recovery, even if it isn't quite back to pre-pandemic levels yet. But data for Japanese <a href="https://www.meti.go.jp/english/statistics/tyo/iip/index.html" target="_blank"><strong>industrial production</strong></a> wasn't so flash, in fact quite disappointing given most other recent industrial measures like their PMIs. Supply chain issues are crimping production and shipments still there too.</p><p>Japan voted in national elections over the weekend and the ruling party looks like it will <a href="https://english.kyodonews.net/news/2021/10/9d1a4c51837c-voting-under-way-in-japan-election-as-pm-kishida-s