China's Economy A Mixed Bag! Will Stimulus Save the Day?

A Whisker Away from Disaster?

Madre de Dios! Your favorite hero Puss in Boots reporting live (and purr sonally) from... well not China but a very comfortable sunbeam! Word on the street – or should I say from the scrolls of CNBC – is that China's industrial profits took a little tumble in the year's opening act. A mere 0.3% dip they say but even a drop of water can drown a cat… metaphorically of course! After three years of declines one might think things are looking grim but as I always say “I have transcended the shackles of mortality!” and China might have too... or at least be working on it.

Stimulus: The Magic Beans of the East?

Apparently Beijing has been sprinkling some 'stimulus measures' like magic beans. Last December profits bounced back a glorious 11% giving hope that these beans might actually grow into a giant money tree! Robin Xing from Morgan Stanley (a name almost as magnificent as mine!) seems optimistic raising China's growth forecast to 4.5%. However even I Puss in Boots can see that it's a mixed bag. As the great Humpty Dumpty once said "It's hard to get all the king's horses to put you back together again."

State vs. Foreign: A Tale of Two Profits

Ah the plot thickens! State backed companies are doing a little better (2.1% growth) and those with foreign investments? Even better rising 4.9%! Manufacturing and utilities are strutting their stuff with impressive gains. But alas the mining industry is singing the blues with a hefty 25.2% plunge. It seems even mountains can have their off days. 'Fear not,' I say! For even in the darkest cave there is always a glimmer of hope or a conveniently placed torch.

Trump's Tariffs: A Wall Higher Than the Beanstalk!

Ay caramba! Donald Trump is playing the villain again slapping extra tariffs on Chinese goods. A 25% auto tariff? That's outrageous! He's building a wall of tariffs higher than any beanstalk! Even I with my cunning and charm would struggle to scale such a barrier. But as I always say “I am the law!” and perhaps China will find a way to outsmart this new challenge.

A Growth Target and Wall Street's Crystal Ball

Beijing is aiming for a 'around 5%' growth target. Ambitious yes but achievable? Wall Street banks are becoming more optimistic but they also see those pesky tariffs lurking on the horizon. Morgan Stanley's Xing warns that these tariffs are like a sticky situation harder to negotiate down. Perhaps a well timed dose of kitty cat eyes would help? One can only hope!

Unemployment and the Price of Fish

But not all is sunshine and churros! Retail sales are up investment is growing but exports are slowing. And the worst news? Unemployment is rising! The young ones especially are struggling. It seems even the finest boots cannot always walk a smooth path. But remember my amigos “Death comes for us all!” (eventually so let's try and fix this economy first!)