KUALA LUMPUR, July 31 (Bernama) -- Bursa Malaysia ended higher on Friday as investors continued to accumulate blue-chip stocks in line with stronger performances across most regional markets. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.50 points to 1,724.90 from yesterday’s close of 1,720.40. The benchmark index opened 0.83 of a point higher at 1,721.23, and moved between 1,715.67 and 1,730.12 throughout the day. The broader market was positive with gainers outpacing losers 707 to 402, while 547 counters were unchanged, 1,085 untraded and 56 suspended. Turnover expanded to 3.03 billion units valued at RM3.56 billion from 2.49 billion units valued at RM2.25 billion on Thursday.
China's economy is showing mixed signals with strong industrial production but weak consumption amid a property slump, leading to the slowest quarterly growth in five quarters. However, President Xi Jinping's long-term strategy for technology-driven "high-quality growth" is beginning to pay off.
Key Developments:
- Technology Advancements: Despite challenges, China's tech sector, including electric vehicles (EVs), solar panels, and semiconductors, is growing rapidly. This growth helps cushion the economy against the property market downturn.
- Economic Goals: China aims for a growth target of around 5%. Advances in high-tech sectors are helping maintain this pace, contrasting with the deep economic setbacks experienced by Japan and America during their housing market crises.
Policy Focus:
- Third Plenum: Xi and top Communist Party officials are meeting in Beijing to chart long-term economic plans, emphasizing the importance of tech-driven growth.
- Consumer Confidence: Despite tech advances, consumer confidence remains low, as evidenced by weak retail sales in June. This hesitation impacts overall economic recovery.
Global Market Impact:
- Protectionism: The influx of cheap Chinese EVs and solar panels has triggered protectionist measures from the US and Europe. These regions fear job losses due to China's industrial power.
- US Tariffs: Potential re-election of Donald Trump could exacerbate trade tensions, with Trump proposing 60% tariffs on Chinese goods.
Strategic Shifts:
- Self-Sufficiency: Xi aims to build self-reliance in critical industries like advanced computer chips to mitigate the impact of trade tensions.
- Hi-Tech Sector Growth: Bloomberg Economics forecasts that the hi-tech sector will account for 19% of GDP by 2026, up from 11% in 2018. Including EVs, batteries, and solar panels, this could rise to 23%, offsetting the decline in the property sector.
Local Impacts:
- Xuzhou's Transition: Xuzhou, once reliant on heavy industries, is now focusing on new energy, machinery construction, and new materials. GCL Technology, a leading polysilicon producer, exemplifies this shift, creating jobs and boosting local green industries.
Economic Balancing Act:
- High-Quality Growth: Xi’s vision of high-quality growth involves transitioning from rapid expansion to sustainable development. This approach is crucial for China to avoid the "middle-income trap" and achieve its goal of becoming a "medium-developed country" by 2035.
Challenges Ahead:
- Consumer Impact: Despite the push for high-tech growth, income inequality remains a concern. Measures to prevent job losses due to automation and AI are being considered.
- Global Competition: As China strives to advance in tech, the pace of change in global technologies will be a critical factor. The nation must keep up with rapid developments in AI and chipmaking to achieve its goals.
Conclusion:
China's economic strategy under Xi Jinping is showing promising results in mitigating the effects of a property slump through advancements in technology and exports. However, challenges such as consumer confidence, protectionist measures, and global tech competition will need careful navigation to sustain growth and achieve long-term economic stability.
Comments
Post a Comment