Morning Brief – China

Humphrey Percy
Chairman and Founder
Wed 6 Mar 2024


At this week’s National People’s Congress, the 2024 economic targets for the People’s Republic of China were announced. Last year GDP growth officially came in at 5.2% but outside China estimates put it at 1-2%; however while it was acknowledged this week that there had been some issues with the Chinese economy in 2023, growth for 2024 was set at 5%. Consumer spending continues to drop at the sharpest rate for 15 years and the well reported fall out in the real estate market has been exacerbated by a lack of confidence. Unlike the West, China is threatened by deflation which has contributed to this week’s announcement of the official creation of 12 million new jobs in urban areas. If that sounds a lot to Western readers, as a proportion of the 1.4 billion population, at less than 1% it hardly moves the dial.
USD/CNY 7.20.


With local and EU elections due to take place on June 9, the likelihood is that Hungary is becoming more autocratic with a harsher more restrictive political model. With its high dependency on imported goods and especially when it comes to energy, Hungary has seen the Forint weaken in the past two years from EUR/HUF 350 to almost 400. At the same time Prime Minister Viktor Orban has tightened his control on the country, hence the predicted further shift in the political atmosphere. Since 2003, the accepted plan has been for Hungary to join the EUR but as of now that looks a way off with the HUF not part of the ERM ll and nor is there a scheduled date for the HUF to be replaced by EUR. Apart from anything else, with its high inflation rate, Hungary does not meet the criteria to join.
EUR/HUF 395.

Inflation in the EU

With the lowest rates of inflation at 0.9%, Denmark and Italy are top of the class followed by Latvia, Lithuania and Finland at 1.1%. At the other end of the scale are Romania with 7.3%. The overall EU rate is 3.1% which is where Germany stands. France and Spain are at 3.4 and 3.5% respectively. As a rule, the candidate countries which are Albania, Bosnia and Herzegovina, Georgia, Moldova, Montenegro, N Macedonia, Serbia and Turkey al have higher rates of inflation led by Turkey with a contest winning knockout of 64.9%.
USD/TRL 31.65.

Smokehouse Creek

In case you missed it, Texas USA has been battling a wildfire that has consumed more than 1 million acres. In case you, like me, find it difficult to assess what 1 million acres would look like, it is an area that would be the equivalent of more than New York City….five times over.
GBP/USD 1.2725.

How Can I Be Sure?

This day in 2011 ex teenage heartthrob US singer David Cassidy was the first of the contestants to be fired on US NBC’s Celebrity Apprentice when he was told to go by President to be, ex President and probable future President Donald Trump who displays no signs of suffering from any such self doubt.
How can I be sure
In a world that’s constantly changin’?
How can I be sure
Where I stand with you?

Whenever I
Whenever I am away from you
I want to die
‘Cause you know I want to stay with you

How do I know?
Maybe you’re trying to use me
Flying too high can confuse me
Touch me but don’t take me down

Whenever I
Whenever I am away from you
My alibi is tellin’ people I don’t care for you
Maybe I’m just hanging around
With my head up, upside down
It’s a pity
I can’t seem to find someone
Who’s as pretty ‘n’ lovely as you

How can I be sure
I really, really, really, want to kno-o-ow
I really, really, really, want to kno-o-ow

How’s the weather?
Weather or not, we’re together
Together we’ll see it much better
I love you, I love you forever
You know where I can be found…

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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