China’s central bank has decided to promote “connectivity” of the ubiquitous quick response (QR) code payment service. A single barcode will, the PBoC hopes, also spur growth in a range of services. The burgeoning mobile payment market has been pivotal, spawning new businesses and helping China to (arguably) become the most sophisticated services economy globally.
The Chinese leaders are celebrating 70 years of communist rule this week, and will note the irony. Their biggest political foe, Donald Trump, is embroiled in a political crisis: impeachment from an opposition party is not something Mr Xi will ever have to worry about. This may, of course, be overstating the risks for the US president. And China has its own problems: insurgent Hong Kong and an economy ‘overwhelmed’ with debt, heading – its many critics warn – for a hard landing.
For now, the data does not quite bear out the more pessimistic forecasts. Both manufacturing PMIs improved in September. China has carried on shifting to the areas of manufacturing that potentially offer higher, net value added. China’s trade surplus for machinery & equipment hit a record high in the year to August.
Shifting production to other countries, such as Vietnam, has a positive second-round impact too: China’s trade surplus with Vietnam has risen sharply. A booming Vietnam is good for Chinese companies: exports from China to Vietnam rose 25.8% y/y in August.
