Finance

China’s Ministry of Commerce said Thursday the U.S. is weaponizing export controls and using them as a tool.
Spokesperson Shu Jueting was speaking at the ministry’s first press conference of 2024 in response to a question about ASML.
Chinese Commerce Minister Wang Wentao also raised concerns about U.S. chip export controls in a call Thursday with U.S. Commerce Secretary Gina Raimondo, according to the ministry.

Chinese and U.S. flags flutter near The Bund, before U.S. trade delegation meet their Chinese counterparts for talks in Shanghai, China July 30, 2019.
Aly Song | Reuters

BEIJING — China’s Ministry of Commerce said Thursday the U.S. is weaponizing export controls and using them as a tool.
”We are highly concerned about the United States’ direct intervention and interference in the issue of high-tech exports by Dutch companies to China,” spokesperson Shu Jueting said at the ministry’s first press conference in 2024, according to a CNBC translation of her Mandarin-language remarks.

“The United States has instrumentalized and weaponized export control issues,” she said, calling for the Dutch side to “respect the spirit of the contract and support businesses in conducting compliant trade.”
She was responding to a question about ASML, the Netherlands-based company that makes lithography machines that are key to manufacturing advanced semiconductors.
ASML said in a Jan. 1 statement the Dutch government restricted it from exporting some lithography products to China.

The Dutch government last year announced new restrictions on exporting certain equipment for manufacturing advanced chips. The move followed U.S. export controls aimed at limiting the Chinese military’s access to high-end semiconductor technology.
ASML said in the statement that after discussions with the U.S. government, it found the latest U.S. export rules in October cover certain lithography tools.

China “firmly opposes” such moves and will take “necessary measures” to protect Chinese business interests, Shu said.
The ministry last year announced export controls on some metals used in chipmaking.

U.S.-China commerce talks focus on chips

Chinese Commerce Minister Wang Wentao also raised concerns about U.S. chip export controls in a call Thursday with U.S. Commerce Secretary Gina Raimondo, according to the ministry.
Wang “focused on expressing serious concern about U.S. restrictions on third-party exports of lithography machines to China, investigations into the supply chain of legacy chips and sanctions that suppress Chinese companies,” the ministry said in a Chinese-language readout translated by CNBC.
The U.S. Department of Commerce did not immediately respond to a request for comment outside of U.S. business hours. More

The meeting comes as foreign investors have largely taken a wait-and-see approach to China amid uncertainty about the country’s economic trajectory and tensions with the U.S.
“China will continue to deepen the reform and two-way opening-up of its capital market, facilitate cross-border investment and financing,” state media reported that He said.
Separately, President Emeritus of Harvard University Lawrence Summers met with People’s Bank of China Governor Pan Gongsheng on Wednesday, according to a news release on the central bank’s website.

SAN FRANCISCO, CALIFORNIA – NOVEMBER 10: U.S. Secretary of the Treasury Janet Yellen (R) greets People’s Republic of China (PRC) Vice Premier He Lifeng at the start of a bilateral meeting at the Ritz Carlton Hotel on November 10, 2023 in San Francisco, California. Secretary Yellen and Vice Premier Lifeng will hold meetings ahead of the APEC summit being held in San Francisco. (Photo by Justin Sullivan/Getty Images)
Justin Sullivan | Getty Images News | Getty Images

BEIJING — Chinese Vice Premier He Lifeng met with global financial executives Wednesday and pledged to make it easier for foreign institutions to invest in the country, state media said.
The executives are part of the Chinese securities regulator’s international advisory committee. Vice Premier He is also director of the office of the Central Commission for Financial and Economic Affairs.

The meeting comes as foreign investors have largely taken a wait-and-see approach to China amid uncertainty about the country’s economic trajectory and tensions with the U.S.
The MSCI China stock index fell by 11% in 2023. It marked a third-straight year of annual declines, the first such losing streak in the last 20 years, according to Goldman Sachs.
“China will continue to deepen the reform and two-way opening-up of its capital market, facilitate cross-border investment and financing, and attract more foreign financial institutions and long-term capital to China,” He reportedly said at the meeting, according to state news agency Xinhua.
China has gradually allowed foreign financial institutions to take majority control of their local operations. Last year, the securities regulator also implemented new rules to clarify the process for domestic companies to list overseas.

Separately, President Emeritus of Harvard University Lawrence Summers met with People’s Bank of China Governor Pan Gongsheng on Wednesday, according to a news release on the central bank’s website.

Summers, formerly a U.S. Treasury Secretary, hosted a lecture on the global economy and stagflation, the PBOC said. In an email response to CNBC, Summers said the PBOC lecture “used the term secular stagnation rather than stagflation.” 
Earlier this week on Monday, he met with Shanghai Party Secretary Chen Jining, according to a government announcement.
In-person meetings between Chinese officials and U.S. officials, executives and academics have picked up since China ended Covid-19 travel restrictions more than a year ago.
China’s Premier Li Qiang is set to speak Tuesday at the World Economic Forum’s annual summit in Davos, Switzerland. More

In late 2021 Jerome Powell, chairman of the Federal Reserve, called for the retirement of “transitory” as a description for the inflation afflicting America. The word had become a bugbear, having been taken by many to mean that the inflation which had bubbled up early in the year would fade away as supply shortages improved. As the months went by, not only were price increases accelerating, they were broadening out—from used cars to air fares, clothing, home furnishing and more. The economists who had warned that excessive stimulus and overheating demand, rather than production snarls, would make inflation a more serious problem seemed prescient. In the shorthand of the day, it looked as if “Team Persistent” had defeated “Team Transitory”.Fast-forward to the present, and something strange has happened. The Fed, along with most other major central banks, has acted as if Team Persistent was right. It jacked up short-term interest rates from a floor of 0% to more than 5% in the space of 14 months. Sure enough, inflation has slowed sharply. But here is the odd thing: the opposite side of the debate is now celebrating. “We in Team Transitory can rightly claim victory,” declared Joseph Stiglitz, a Nobel laureate, in a recent essay.What is going on? For starters, the term “transitory” was long misunderstood. The narrowest definition, and the one that investors and politicians latched onto, was a temporal one—namely, that inflation would recede as swiftly as it had emerged. Yet another way of thinking about it was that inflation would come to heel as the post-pandemic economy got back to normal, a process that has played out over the course of years, not months.Moving beyond semantics, the nub of the debate today is whether recent disinflation is better explained by the tightening of monetary policy or the unsnarling of supply chains. If the former, that would reflect the vigilance of Team Persistent. If the latter, that would be a credit to the judgment of Team Transitory.There is much to be said for the supply-side narrative. The main economic model for thinking about how interest rates affect inflation is the Phillips curve, which in its simplest form shows that inflation falls as unemployment rises. In recent decades the Phillips curve has been a troubled predictive tool, as there has been little correlation between unemployment and inflation. But given the surge in inflation after covid-19 struck, many economists once again turned again to its insights. Most famously, Larry Summers, a former Treasury secretary, argued in mid-2022 that unemployment might have to reach 10% in order to curb inflation. Instead, inflation has dissipated even while America’s unemployment rate has remained below 4%. No mass unemployment was needed after all—just as Team Transitory predicted.Some have tried to rescue the Phillips curve by replacing unemployment with job vacancies. In this curve it was a decline in vacancies from record-high levels that delivered the labour-market cooling necessary for disinflation. Yet this explanation also comes up short, argues Mike Konczal of the Roosevelt Institute, a left-leaning think-tank. For inflation to have slowed as much as it has, the modified Phillips curve predicted an ultra-sharp decline in vacancies. But with 1.4 vacancies per unemployed worker, the American jobs market is still pretty tight. Again, this is closer to the immaculate disinflation of Team Transitory’s dreams.Moreover, Mr Konczal points to evidence of the supply-side response that enabled this. Looking at 123 items that are part of the Fed’s preferred “core” measure of inflation, he finds that nearly three-quarters have experienced both declining prices and increasing real consumption. This suggests that the most potent factor in bringing about disinflation was a resumption of full-throttled production, not a pull-back in demand.
Nevertheless, the notion that Team Transitory was right all along leads to a perverse conclusion: that inflation would have melted away even without the Fed’s actions. That might have seemed credible if the Fed had merely fiddled with rates. It is much harder to believe that the most aggressive tightening of monetary policy in four decades was a sideshow. Many rate-sensitive sectors have been hit hard, even if American growth has been resilient. To give some examples: a decade-long upward march in new housing starts came to a sudden halt in mid-2022; car sales remain well below their pre-covid levels; fundraising by venture-capital firms slumped to a six-year low in 2023.This leads to a counterfactual. If the Fed had not moved decisively, growth in America would have been even stronger and inflation even higher. One way to get at this is to craft a more elaborate Phillips curve, including the broader state of the economy and inflation expectations, and not just the labour market. This hardly settles the matter, since economists differ on what exactly should be included, but it does make for a more realistic model of the economy. Economists with Allianz, a German insurance giant, have done just this. They conclude that the Fed played a vital role. About 20% of the disinflation, in their analysis, can be chalked up to the power of monetary tightening in restraining demand. They attribute another 25% to anchored inflation expectations, or the belief that the Fed would not let inflation spiral out of control—a belief crucially reinforced by its tough tightening. The final 55%, they find, owes to the healing of supply chains.Tallying the scoresThe result is a draw between the teams when it comes to diagnosis: about half of inflation was indeed transitory. But what matters most is policy prescriptions. In the summer of 2021, believing inflation to be transitory, the Fed projected that interest rates would not need to rise until 2023, and even then to only 0.5-0.75%—a path that would have been disastrous. Boil the debate down to the question of how the Fed should have responded to the inflation outbreak, and Team Transitory lost fair and square. ■ More

Data from industry body Innovate Finance shows that global investment in fintechs sank to $51.2 billion in 2023, down 48% from 2022.
Despite that, the UAE saw total investment soar 92%, thanks in part to more fintech-friendly regulations and greater adoption of digital banking and fintech tools.
The U.K. was the second-biggest hub for fintech investment in 2023, with total funding for the country’s financial technology industry totaling $5.1 billion in 2023.

Europe’s fintech sector is fiercely competitive, with privately-held start-ups worth tens of billions of dollars vying to steal market share from incumbent banks.
Oscar Wong | Moment | Getty Images

The fintech industry saw more pain in 2023, with overall investment falling by half as higher interest rates and worsening macroeconomic conditions caused investors to tighten their belts, according to global investment figures shared exclusively with CNBC.
The data from Innovate Finance, a financial technology industry body, shows that investment in fintechs last year sank $51.2 billion, down 48% from 2022 when total investment in the sector totaled $99 billion. The total number of fintech fundraising deals also sank considerably, to 3,973 in 2023 from 6,397 in 2022 — a 61% drop.

Still, despite that drop, there was one standout performer on Innovate Finance’s list when it came to funding: the United Arab Emirates. According to Innovate Finance, the UAE saw total investment soar 92% in 2023, thanks in part to more fintech-friendly regulations, and as adoption of digital banking and other tools expanded in the region.
That marks the first time the UAE has made it to the top 10 list of most well-funded fintech hubs in 2023, according to Innovate Finance. There were more Asian and Middle East countries in the top 10 last year than there were European nations, the group noted, as some major European economies slipped down the table, such as France and Germany.
“Some of the markets now adopting this technology, we’re seeing that reflected in investment numbers,” Innovate Finance CEO Janine Hirt told CNBC earlier this week. Hirt noted that the momentum in Asia and the Middle East offered an opportunity for the U.K. to boost cooperation and partnerships with countries in those regions. “We are seeing appetite and real momentum coming from a lot of hubs in Asia,” she said.
On the slowdown, Hirt noted that growth-stage companies were the most likely to be affected by the downturn in funding in 2023, whereas seed-stage and early-stage firms were more immune to those pressures.

“If you’re a later-stage company, you might not be going out for a raise right now,” Innovate Finance’s CEO said, adding that early-stage fintechs had a better time in the market last year raising about $4 billion. “That’s a really positive sign,” she added.

“What is a testament to the strength of our sector is that deal sizes are very, very healthy,” Hirt said. “Globally, and in the U.K., investment in seed, Series A and B fintechs has normalized, which is a testament to the strength of investors,” she added.
Financial technology has had its share of gloom over the past 12 months, amid intensifying conflicts between Russia and Ukraine and Israel and Hamas, ongoing geopolitical tensions between the U.S. and China, and broader uncertainties affecting financial markets, such as higher interest rates.
According to the International Monetary Fund, global economic growth is expected to slow to 3% in 2023 from 3.5% in 2022.

UK comes second to U.S.

Innovate Finance also noted that the U.K. was the second-biggest hub for fintech investment in 2023, with total funding for the country’s financial technology industry totaling $5.1 billion in 2023, down 63% from $13.9 billion in 2022.
The U.K. received more investment in fintech than the next 28 European countries combined, according to Innovate Finance.

London fintechs pulled in $4.5 billion last year, with the city continuing to dominate when it comes to fintech funding in Europe more broadly.
However, the U.K.’s capital saw overall funding drop, too — down 56% from 2022.
Meanwhile, female-led fintechs in the U.K. bagged 59 deals year worth a combined $536 million, according to Innovate Finance, accounting for 10.5% of the U.K. total, which the organization called a “step forward” for women founders and leaders.
“I think, ultimately, the U.K. is still very much a global leader in fintech,” Hirt told CNBC. It’s the European leader.”
But, she added, “We can’t afford to rest on our laurels. It’s critical to build on the momentum we’ve had over the past few years. We need government support and regulation that is effective and efficient and proactive.”
“For us, a focus going forward is making sure we do have proper regulation in place that allows fintechs to thrive, and allows SMEs [small to medium-sized enterprises] across the country to benefit from these new innovations as well.”
“Cracking on with new regimes for stablecoins, regimes for crypto, open banking and finance — these are all areas we’re hopeful we’ll see progress in in 2024.”
The United States, unsurprisingly, was the biggest country for fintech investment, with total investment coming in at $24 billion, although funding levels remained down from 2022 as fintech firms raised 44% less in 2023 than they did a year ago.
India came in third after the U.K., with the country seeing fintech investment worth $2.5 billion last year, while Singapore was fourth with $2.2 billion of funding, and China was fifth on $1.8 billion.
The value of the top five biggest deals globally in 2023 was over $9 billion, or about 18% of total global investment in the space.
Stripe pulled in the most amount of cash raising $6.9 billion, according to the data, while Rapyd, Xpansiv, BharatPe, and Ledger won the second, third, fourth, and fifth-biggest investment deals, respectively. More

China’s leaders are obsessed with lithium-ion batteries, electric cars and solar panels. These sorts of technologies will, Xi Jinping has proclaimed, become “pillars of the economy”. His government is spending big to ensure this happens—meaning, in the years to come, that his ambitions will be felt across the world. A manufacturing export boom could very well lead to a trade war.image: The EconomistMr Xi’s manufacturing obsession is explained by the need to offset China’s property slump, which is dragging on economic growth. Sales by the country’s 100 largest real-estate developers fell by 17% in 2023, and overall investment in residential buildings dropped by 8%. After a decade in which capital spending in property outstripped economic growth, officials now hope that manufacturing can pick up the slack. State-owned banks—corporate China’s main source of financing—are funnelling cash to industrial firms. In return for an extension of pandemic-era tax breaks and carve-outs for green industries, exporters in powerhouse provinces have been told to expand production. During the first 11 months of 2023 capital spending on smelting metals, manufacturing vehicles and making electrical equipment rose by 10%, 18% and 34%, respectively.Such developments will be prompting flashbacks among veteran Western policymakers. China’s rise was accompanied by an epochal shift in global trade. In the decade that followed the country’s accession to the World Trade Organisation in 2001, its exports rose by more than 460%. China became the number-one target for accusations of dumping—selling goods abroad at lower prices than at home—in industries including chemicals, metals and textiles. Although low-cost goods were great news for consumers, they were less welcome for some rich-world industrial workers. It later became fashionable to blame the “China shock”, which led to lay-offs in affected industrial areas, for contributing to Donald Trump’s electoral victory in 2016.image: The EconomistThe coming manufacturing boom could be even larger, given the sheer scale of the Chinese economy, which has doubled in size over the past decade. Michael Pettis of Peking University notes that even if China simply were to maintain the current size of its manufacturing sector, which counts for 28% of GDP, and were to achieve its target of 4-5% gdp growth over the next decade, its share of global manufacturing output would rise from 31% to 36%. If Mr Xi’s ambitions are fulfilled, the rise will be even more significant.China’s capital investment, which is more than double America’s as a share of GDP, is funded by its thrifty households and their saving piles. During earlier manufacturing booms, some observers had expected the country’s domestic consumers to use these savings to splurge on goods, only to be proved wrong. Consumers are likely to continue to prefer saving to spending. In 2023 private consumption rose by 10%, rebounding from a grim 2022. But most analysts now expect markedly slower overall growth in the year to come, owing to tumult in the property market and the government’s wariness about borrowing to support household incomes. In the absence of higher private consumption, “policymakers would need to bring the economy down much faster to correct overcapacity”, says Alicia Garcia-Herrero of Natixis, a bank. “It would have to grow at 3-4%, not 5%”. Alternatively, if the higher rate of growth is to be sustained, more goods will have to be sold abroad.It will help that they are getting cheaper—as can be seen in the steel market, which is vital for China’s car and renewable industries. Early last year investors expected output to fall, as Chinese construction flagged. Instead, in a remarkable feat, the country’s steel giants produced more metal even as the property industry suffered. Steel mills, which have access to cheap capital, are willing to take considerable losses in order to preserve market share.As a result, industrial prices fell by 2% in the first 11 months of 2023, and profits by 4%. An employee at a supplier in Shanghai estimates that producers are losing about 350 yuan ($50) on each tonne of steel reinforcement they sell. In 2012, during a previous era of manufacturing stimulus, overcapacity meant that the profit on a couple of tonnes of steel “was just about enough to buy a lollipop”, according to Yu Yongding, an economist. Producers are now heading for a similar situation. Meanwhile, renewable firms, such as LONGi, the world’s largest solar-equipment manufacturer, and Goldwind, a wind-turbine maker, are also suffering. Both reported sharply lower profits in the third quarter of 2023.It is not only China’s industrial prices that are falling—the country’s currency is, too. The yuan is down by 9% on a trade-weighted basis since its peak in 2022, meaning that overseas competitors face a double whammy. At the same time, Western politicians are more willing to fight on behalf of domestic firms than during the last era of Chinese manufacturing stimulus. Attitudes towards Chinese exports have hardened. Western countries are both more protective of their domestic industrial bases and more sceptical that China will eventually become a market economy.Frictions are already starting to develop. In November Britain launched a probe into Chinese excavators, after JCB, a local firm, alleged that Chinese rivals were flooding the market with cut-price machines. The eu is conducting an anti-subsidy probe into Chinese electric vehicles and an anti-dumping probe into Chinese biodiesel. The Biden administration has asked the eu to tax Chinese goods, offering to drop American tariffs on European steel in return. On January 5th China decided to hit Europe where it hurts, announcing an anti-dumping investigation into brandy.And it is not just the rich world that is getting angry. In September India imposed fresh anti-dumping duties on Chinese steel; in December it introduced new duties on industrial laser machines. Indeed, almost all the anti-dumping investigations that India’s trade authorities are now conducting concern China. On the other side of the world, Mexico is in a tricky spot. It benefits from decisions by Chinese companies to move production in order to avoid American tariffs, but it also wants to avoid domestic markets being flooded by subsidised imports. It seems the latter desire is now taking precedence. In December the government announced an 80% tariff on some imports of Chinese steel.China’s leadership has little room for manoeuvre. In December officials issued a statement calling industrial overcapacity, exacerbated by weak domestic demand, one of the biggest challenges facing the economy. Given the numerous other challenges facing the economy, they can hardly afford to alienate more of China’s trading partners with fights over dumping and subsidies. Unfortunately, the alternative—a new year with nothing to offset the property mess and lacklustre consumer spending—may be even less attractive. ■ More

Despite pockets of strong growth, the China economic investment story has in the last year been overshadowed by longer-term problems and tensions with the U.S.
“We believe property stabilization, a clear exit from deflation, better policy execution and communication would all be necessary for confidence recovery, with stimulus indispensable and good reforms welcome,” Citi analysts said. “The risk is that markets may not be patient enough with reforms.”

CHONGQING, CHINA – JANUARY 02: People visit the 2nd International Light and Shadow Art Festival at the Fine Arts Park on January 2, 2024 in Chongqing, China. The 2nd International Light and Shadow Art Festival runs from December 29 to January 7. (Photo by VCG/VCG via Getty Images)
Vcg | Visual China Group | Getty Images

BEIJING — Despite pockets of strong growth, China’s investment story has been overshadowed in the last year by longer-term problems and tensions with the U.S.
Those uncertainties remain as 2024 kicks off. The country is also navigating new territory as it starts to settle into a lower growth range following the double-digit pace of past decades.

Here’s what investors are looking at for the year ahead:

Will there be stimulus?

For all the geopolitical risks, the attraction of China as a fast-growing market has waned as the economy matures.
Many were disappointed when China’s economy did not rebound as quickly as expected after the end of Covid-19 controls in December 2022. Other than in tourism and certain sectors such as electric cars, sluggish growth was the story for much of 2023, dragged down by real estate troubles and a slump in exports.

Several international investment banks changed their growth forecasts for China multiple times last year. After all the back and forth, the economy is widely expected to have grown by around 5%.
“Policy response is essential to solidify the recovery momentum,” Citi analysts said in a Jan. 3 report.

They expect that as early as January, the People’s Bank of China could reduce rates, such as the reserve requirement ratio — the amount of funds lenders need to hold as reserves. They also project that overall GDP could grow 4.6% this year.
Beijing has announced a slew of incrementally supportive policies. But it’s taken time to see a clear impact.

For the people who are already [invested] in China, and they kind of stuck with it for 2023, it’s this belief that the catalyst is coming.

CIO, Rayliant Global Advisors

“We believe property stabilization, a clear exit from deflation, better policy execution and communication would all be necessary for confidence recovery, with stimulus indispensable and good reforms welcome,” the Citi analysts said. “The risk is that markets may not be patient enough with reforms.”
In mid-December, top Chinese authorities held an annual meeting for discussing economic policy for the year ahead. An official readout did not indicate significant stimulus plans, but listed technological innovation as the first area of work.
Among major upcoming government meetings, Beijing is set to release detailed economic targets during a parliamentary gathering in early March.
“For the people who are already [invested] in China, and they kind of stuck with it for 2023, it’s this belief that the catalyst is coming,” Jason Hsu, chairman and chief investment officer of Rayliant Global Advisors, said in late November.

Read more about China from CNBC Pro

“They’re not really focused on the fundamentals of companies of the markets,” he said. “They’re just betting on purely monetary and fiscal policy to buoy up the economy and the stock market.”
However, it remains to be seen whether China will boost growth in the same way it did previously.
“My framework is China is not going to put up significant stimulus,” Liqian Ren, leader of quantitative investment at WisdomTree, said in late November.
“Even if China has a meeting, even if they come up with a good package, I think a lot of these stimulus are constrained by this framework of trying to upgrade China’s growth,” she said, referring to Beijing’s efforts to promote “high-quality,” rather than debt-driven, growth.

What will happen to real estate?

Real estate is a clear example of a debt-fueled sector, one that has accounted for about a quarter of China’s economy.
The property market slumped after Beijing cracked down on developers’ high reliance on debt for growth in 2020. The industry’s close ties to local government finances, the construction supply chain and household mortgages have raised concerns about spillover to the broader economy.

The pace of decline in demand has slowed and we expect to see somewhat more stability in 2024.

Goldman Sachs

“China’s property downturn has been the biggest drag on its economy since the exit from zero-Covid restrictions in late 2022,” Goldman Sachs analysts said in a Jan. 2 report. “Property sales and construction starts plunged in 2021-22 and continued to decline on net in 2023.”
“However, the pace of decline in demand has slowed and we expect to see somewhat more stability in 2024,” the analysts said.

Commercial housing sales for 2023 as of November fell by 5.2% from a year ago, according to National Bureau of Statistics data accessed via Wind Information. That’s after those sales plunged by 26.7% in 2022.
Although the real estate situation is “gradually stabilizing, it’s hard to see a turning point,” said Ding Wenjie, investment strategist for global capital investment at China Asset Management Co., according to a CNBC translation of her Mandarin language remarks.
She expects policy support will increase in 2024, because authorities have shifted from focusing on preventing risks to pursuing progress, while maintaining stability. Ding was referring to new official language that appeared in the readout of December’s high-level government meeting.

Where are the opportunities?

While it’s clear Beijing would like to reduce the property sector’s contribution to China’s GDP, it’s less certain whether new growth drivers can fill the void.
Machinery, electronics, transport equipment and batteries combined contributed to 17.2% of China’s economy in 2020, Citi analysts said.
That means such areas of manufacturing could offset the drag from real estate, the analysts said. But they pointed out the economic transition can’t happen overnight since it requires addressing a mismatch in labor market skills and adjusting a supply chain that’s been built to support property development.
“Were tech sanctions to become a binding constraint for the new drivers, their potential to make up for the shortfall from property would not materialize,” the report said.

Despite the macro challenges, Beijing has signaled it wants to bolster domestic tech and advanced manufacturing.
Ding from China AMC said sub-sectors of high-end manufacturing could benefit this year due to an upturn in the global tech cycle. Examples include those related to consumer electronics and computers.
She also expects producer prices to return to growth at the end of the second quarter, boosting corporate earnings per share by about 8% to 10% in China. Another area her team is looking at is Chinese companies that are growing their global revenue. More

Federal Reserve Governor Michelle Bowman said Monday interest rate hikes are likely over.
One of the central bank’s staunchest advocates for tight monetary policy, Bowman said she’s not ready to start talking about rate cuts.
“In my view, we are not yet at that point. And important upside inflation risks remain,” she said.

Federal Reserve Bank Governor Michelle Bowman gives her first public remarks as a Federal policymaker at an American Bankers Association conference In San Diego, California, February 11 2019.
Ann Saphir | Reuters

Federal Reserve Governor Michelle Bowman, who had been one of the central bank’s staunchest advocates for tight monetary policy, said Monday she’s adjusted her stance somewhat and indicated that interest rate hikes are likely over.
However, she said she’s not ready to start cutting yet.

In remarks delivered at a private event in South Carolina, Bowman noted the progress made against inflation and said it should continue with short-term rates at their current levels.
“Based on this progress, my view has evolved to consider the possibility that the rate of inflation could decline further with the policy rate held at the current level for some time,” she said. “Should inflation continue to fall closer to our 2 percent goal over time, it will eventually become appropriate to begin the process of lowering our policy rate to prevent policy from becoming overly restrictive.”
“In my view, we are not yet at that point. And important upside inflation risks remain,” she added.
As a governor, Bowman is a permanent voter of the rate-setting Federal Open Market Committee. Prior to this speech, she had repeatedly said additional rate hikes likely would be needed to address inflation.
Her comments come a few weeks after the committee, at its December meeting, voted to hold the benchmark federal funds rate at its current target range of 5.25%-5.5%. In addition, committee members, through their closely followed dot-plot matrix, indicated that the equivalent of three quarter-percentage point rate cuts could come in 2024.

However, minutes released last week from the Dec. 12-13 meeting provided no potential timetable on the reductions, with members indicating a high degree of uncertainty over how conditions might evolve. Inflation is trending down toward the Fed’s target, and by one measure is running below it over the past six months.
Bowman said policymakers will remain attuned to how things develop and are not locked into a policy course.
“I will remain cautious in my approach to considering future changes in the stance of policy,” she said, adding that if the inflation data reverse, “I remain willing to raise the federal funds rate at a future meeting.”
The Fed meets again on Jan. 30-31, with markets expecting the committee to stay put on rates and then begin cutting in March. Market pricing indicates a total of 1.5 percentage points worth of reductions this year, or six cuts, according to the CME Group’s FedWatch tracker. More

Gift cards are a popular gift during the winter holiday season.
Many Americans have at least one unused gift card, worth $187 a person, on average, Bankrate said.
Consumers can sell unused gift cards for cash on certain websites. However, there are some steps consumers should take before transacting, experts said.

Su Arslanoglu | E+ | Getty Images

Are your unused gift cards gathering dust? You may be able to exchange those cards for cash.
Gift cards are among the most popular gifts during the winter holiday season: 44% of consumers planned to give one as a gift in 2023, ranking second only to clothing, 56%, according to the National Retail Federation.

Many Americans don’t use their cards. To that point, 47% of U.S. adults have at least one unused card, according to a 2023 Bankrate survey. Nationwide, those unused balances are worth $23 billion, the report found.
Their average value is $187 a person — a 61% increase from $116 in June 2021, Bankrate found.
However, certain websites let consumers sell their unused cards for money.
“Consumers certainly don’t need to leave these gift cards unused in a drawer somewhere,” said John Breyault, vice president of public policy, telecommunications and fraud at the National Consumers League.

These websites have a few different financial models, which pay consumers less than the face value of their card. Some vendors pay a percentage of a card’s value, with amounts varying by retailer, while others are like an eBay for gift cards, for example, Breyault said.

Examples include Raise.com, CardCash.com and GiftCash.com, said Ted Jenkin, a certified financial planner based in Atlanta and a member of CNBC’s Advisor Council.
One “detriment” of holiday gift cards is that recipients are generally inclined to spend more than a card’s value while shopping, Jenkin said. A $100 card might turn into a $118 total purchase, for example, he said.
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That’s among the reasons retailers heavily market gift cards.
They drive additional sales, Breyault said. The global gift card market is expected to be $2.3 trillion by 2030, up from about $899 billion in 2022, according to Global Industry Analysts.
Recipients can instead trade in a gift card to help pay down household debt or build up an emergency cash reserve, Jenkin said.
Some cards “have very little value and some have a lot more value,” so consumers should do some comparison shopping on websites to scout the best deal, Jenkin added.

How to avoid gift card sale scams

Breyault advised against using Facebook Marketplace or Craigslist to sell — or buy — gift cards. He has seen “a lot of reports” of fraud via these sites whereby consumers have been duped.
For other sites, some due diligence is advised before transacting, Breyault said. For example, check with the Better Business Bureau to see if consumers have lodged complaints about a particular service.
Something as simple as doing a Google search for the name of the site and the word “scam” can also be useful, he said.

Consumers can also look for a customer service phone number for a site and inspect whether it works. A disconnected number or full voicemail inbox is often a red flag, Breyault said.
There are options beyond selling an unused card, too, such as donating gift cards to charity or even regifting them, he added.
Additionally, about a dozen states have laws that require retailers to pay cash back to consumers who have partially used their gift cards. Card balances must fall below a certain financial threshold, and some restrictions may apply. Most states require this for card balances of about $5 or less, while California, the most generous state, does so for cards of $9.99 or less.Don’t miss these stories from CNBC PRO: More