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<div class="KonaFilter image-container float_right"><div class="image on-image">REUTERS/Jason Lee/files</div></div>China's growing external debt has once again set off alarm bells.
The State Administration of Foreign Exchange (SAFE) said the country had $823 billion of external debt at the end of Q3 - about 9% of GDP. 
Some have argued that this is evidence of desperation, and that China is now borrowing money from foreigners, having maxed out on domestic credit. 
Pointing to China's international investment position (IIP) data, Standard Chartered's Stephen Green writes that this measure is the most "comprehensive measure of the total liabilities that China Inc. owes the world," and that "China's liabilities are dominated by foreign direct investment (FDI), the best kind of liability." The IIP data puts all of China's liabilities to the world at $3.8 trillion as of September 2013, or about 43% of GDP. This number is much bigger than SAFE's for a few key reasons. 1. SAFE doesn't include liabilities denominated in foreign currencies but not those in offshore yuan. 2. It excludes FDI.
But a breakdown of IIP data shows that the largest part of this debt is driven by FDI which amounted to $2.3 trillion at the end of 2013. Portfolio investment totaled $347 billion. The remaining $1.1 trillion is driven by trade credit, loans from foreign creditors, and deposits of foreign firms in China.
"There has been no significant increase in China's liabilities with the rest of the world - and when FDI is excluded, the absolute number is small and flat," writes Green. "No impending cataclysm here." 
<div class="KonaFilter image-container"><div class="image">Standard Chartered</div></div>
Total foreign debt as a percent of GDP shows "no sign of a substantial ramp-up in borrowing from offshore."
<div class="KonaFilter image-container"><div class="image">Standard Chartered</div></div>
China's foreign bank loans to China amount to 10% of GDP, one of the lowest among emerging markets.
<div class="KonaFilter image-container"><div class="image">Standard Chartered</div></div> The one thing to watch is the pace at which the stock of cross-border loans is growing, currently up 50% year-over-year.
But the recent debt expansion "has been the normalization of what was an abnormal situation: a massive economy shutting itself off from offshore funding sources," writes Green.
Foreign borrowing of 10-14% of GDP is perfectly normal for the world's second largest economy and one that plans to become an international investor, according to Green.

These Three Charts Show Why Everyone Should Stop Freaking Out About Chinese Foreign Debt

Industrial growth contracted for a second month in December while retail <keyword id="22195" type="COMPANY" weightage="100" keywordseo="Inflation">inflation</keyword> spurted to a 17-month high in January, capturing the dilemma facing <keyword id="6355261" type="POSITION" weightage="100" keywordseo="Finance-minister">Finance Minister</keyword> <keyword id="42575" type="PERSON" weightage="100" keywordseo="Arun-Jaitley">Arun Jaitley</keyword> ahead of the Budget. 
 Any attempt to raise government spending to spur growth could force a delay in further <keyword id="37018" type="UNKNOWN" weightage="100" keywordseo="interest-rate">interest rate</keyword> cuts by the Reserve Bank of India because of rising prices. 
 
The Index of Industrial Production (IIP) fell 1.3 per cent in December after a revised 3.4 per cent decline in November, according to data released by the statistics office on Friday. The November fall had been previously pegged at 3.2 per cent. The slump was partly because of floods in Chennai, a major manufacturing hub. 
 
The separately released consumer price index (CPI) showed retail inflation at 5.69 per cent in January, the highest since August 2014, making for a toxic mix of macro numbers at the start of the new calendar. 
 "As both high-frequency data show deterioration, deterioration, the macroeconomic management of the economy by the government as well as RBI is going to be more difficult ahead, particularly when the <keyword id="6360189" type="COMPANY" weightage="100" keywordseo="Union-Budget">Union Budget</keyword> is due by the end of this month," said Sunil Kumar Sinha, principal economist at India Ratings, a Fitch Ratings associate. 
 The data also highlighted the disconnect between <keyword id="35050" type="CITY" weightage="100" keywordseo="gdp">GDP</keyword> numbers and high-speed indicators such as industrial production and car sales. 
 
Car sales fell 0.72 per cent in January, the first decline 15 months. GDP data released on Monday had showed a growth of 7.3 per cent for the December quarter and an outstanding 12.6 per cent growth in manufacturing. But manufacturing contracted 2.4 per cent in December, according to IIP data. 
 
Manufacturing accounts for 75.5 per cent weight in IIP. "The marginal 0.9 per cent volume growth in the manufacturing sector in Q3FY16 stood in sharp contrast to the growth of value addition revealed by the GDP data (12.6 per cent at constant prices and 10.9 per cent at current prices), which benefitted from lower input costs," said Aditi Nayar, senior economist, ICRA. 
 
The spike in inflation is largely because of food inflation which accelerated to 6.85 per cent in January from 6.4 per cent in the previous month, making a rate cut difficult when RBI reviews monetary policy on April 5. Any relaxation of fiscal targets by the government in the Budget would all but rule out a rate cut. Some policymakers favour a relaxation in the fiscal consolidation target of 3.5 per cent for FY15 to create room for more government spending while meeting pay commission obligations. "Presuming a normal monsoon in 2016 and fiscal consolidation along the previously announced trajectory, ICRA expects CPI inflation to average 5.5 per cent in FY17, allowing for a final 25-basis-points cut in the repo rate during 2016," said Nayar. 
 
Image credit: Indiatimes

Budget 2016: High inflation and slow industrial growth present obstacles to FM Arun Jaitley

Mumbai, Feb 11 () The Indian rupee on Tuesday settled almost flat at 71.28 (provisional) against the US dollar ahead of release of the key domestic macro-economic data.Forex traders said the rupee continued to consolidate in a narrow range ahead of inflation and industrial production number that will be released on Wednesday.At the interbank foreign exchange market, the local currency opened on a positive note at 71.23. During the day, it saw a high of 71.19 and a low of 71.33.The Indian currency finally settled at 71.28, higher by 2 paise against its previous close.The domestic unit had settled at 71.30 against the American currency on Monday."Expectation is that inflation could inch higher and the same time IIP could witness slower growth. Weaker-than-expected number could keep the currency under pressure. We expect the USD/INR (Spot) to quote in the range of 71.25 and 71.80," said Gaurang Somaiyaa, Forex &amp; Bullion Analyst, Motilal Oswal Financial Services. DRRBAL

Rupee ends nearly flat at 71.28 against US dollar

India's eight core industries recorded a growth of 7.4 per cent in December (2022) against 4.1 per cent recorded in the same month last year, according to official data released by the <keyword id="527366" type="General" weightage="20" keywordseo="Ministry-of-Commerce-Industry" source="Orion">Ministry of Commerce &amp; Industry</keyword> on Tuesday. The number stood at 5.4 per cent in November, 2022. "The production of coal, electricity, steel, cement, fertilizers, refinery products and natural gas increased in December 2022 over the corresponding month of last year," stated the release. The <keyword id="16313496" type="General" weightage="20" keywordseo="production-of-crude-oil-declined" source="Orion">production of crude oil declined</keyword> by 1.2 per cent in December, 2022. The cumulative growth rate of ICI during April-December 2022 was 8.0 per cent (provisional) as compared to the corresponding period of last year. The Index of Core Industries measures combined and individual performance of production in selected eight core industries viz. coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity. The Eight Core Industries comprise 40.27 per cent of the weight of items included in the <keyword id="124816" type="General" weightage="20" keywordseo="Index-of-Industrial-Production" source="Orion">Index of Industrial Production</keyword> (IIP). SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/indian-start-ups-are-looking-at-reverse-flipping-says-economic-survey/articleshow/97495048.cms">Indian start-ups are looking at reverse flipping says Economic Survey</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/in-a-major-clean-up-drive-bmc-sacks-55-staffers-for-corruption-suspends-134-for-graft-crimes/articleshow/97491919.cms">In a major clean-up drive, BMC sacks 55 staffers for corruption, suspends 134 for graft, crimes</a>

India's core sector output rises by 7.4 per cent in December

Mumbai, Feb 13 () Equity benchmarks <keyword id="6484188" type="DEFINITION" weightage="20" keywordseo="sensex">Sensex</keyword> and <keyword id="6354813" type="PERSON" weightage="20" keywordseo="Nifty">Nifty</keyword> slipped into the negative zone in opening deals on Thursday, weighed down by disappointing macroeconomic data. The BSE gauge Sensex was trading lower by 51.28 points or 0.12 per cent at 41,514.62 in early trade; while the NSE barometer Nifty was down 16.55 points or 0.14 per cent at 12,184.65. Both key indices were in the red primarily due to emergence of selling in financial and auto stocks. Hurting market <keyword id="46780" type="PERSON" weightage="20" keywordseo="sentiment">sentiment</keyword>, government data on Wednesday showed that industrial output contracted by 0.3 per cent in December while retail inflation jumped to a 68-month high of 7.59 per cent in January on high food prices. Ahead of the release of IIP and inflation data, the Sensex had settled 349.76 points, or 0.85 per cent, higher at 41,565.90; and the Nifty had clocked 93.30 points, or 0.77 per cent, gains to settle at 12,201.20 on Wednesday. Provisional data showed that foreign institutional investors bought equities worth Rs 48.81 crore on a net basis on Wednesday. The Indian rupee was trading lower by 8 paise at 71.41 gainst the US dollar in opening deals on Thursday. Meanwhile, Asian stocks were trading mixed as <keyword id="1754604" type="PERSON" weightage="20" keywordseo="coronavirus">coronavirus</keyword> concerns continued to impact investor sentiment globally. The number of fatalities and new cases from China's coronavirus outbreak soared on Thursday, with over 200 more deaths and thousands of new patients. MKJ MKJ

Sensex, Nifty slips to red in morning trade after disappointing macro data

(Eds: Combining related stories) New Delhi, Mar 12 () India's factory output showed a marginal rise in January, while retail inflation eased to a two-month low in February, paving the way for RBI to cut interest rate to boost the economy that may be losing steam due to the coronavirus outbreak. The Index of Industrial Production (IIP) grew by 2 per cent in January against 1.6 per cent a year back, displaying moderate green shoots, official data released on Thursday showed. According to the data from the National Statistical Office (NSO), the manufacturing sector output grew by 1.5 per cent as compared with a rise of 1.3 per cent in the corresponding month a year ago. However, going forward, the February factory output may be impacted as several industries such as automobiles, technology, pharma and fashion have some exposure to imports of raw and intermediate materials from China. Retail inflation eased to 6.58 per cent in February, from 7.59 per cent in the previous month, but remained above the Reserve Bank of India's target band of 4 per cent, plus or minus 2 per cent. Manufacturing, which is the largest component of IIP having 77.6 per cent weight, continues to be down. It grew at 1.5 per cent in January 2020 and just 0.3 per cent for the first 10 months of current fiscal. As per use-based classification, out of six sectors four -- namely capital goods, infrastructure/construction goods, consumer durables and consumer non-durables -- recorded negative growth in January 2020. CPI inflation in February reversed six months of increasing trend mainly due to base effect and sequential decline in food price inflation as well as a dip in transport and communication inflation. Core inflation, a measure of demand conditions in the economy, also reversed after increasing for three months and came in at 4.08 per cent in February. Between Q1 FY19 and Q3 FY20, core inflation declined to 3.6 per cent from 6.2 per cent and GDP growth declined to 4.7 per cent from 7.1 per cent. "The news of improvement in industrial activity in January and ease in inflation in February comes as a relief amid the epidemic crisis and economic slowdown and global health crises. The data does not capture the impact of the sharp decline in oil prices on inflation is not captured either," said Rumki Majumdar, Economist, Deloitte India. With the epidemic spreading fast in Europe and the US, a slowdown in these economies will impact the global demand for industrial and manufactured goods. "However, one can only hope that inflation may come down further in March as oil prices are expected to remain low for a while now. This opens up room for further monetary policy stimulus. The RBI may cut policy rates in the upcoming MPC meeting as a pre-emptive measure to offset the impact of the epidemic on demand," Majumdar said. The factory output growth even during FY19 was weak but it remained in the positive territory and averaged 3.8 per cent. In FY20, however, the variation in the factory output growth has increased and is fluctuating between positive and negative territory quite frequently, demonstrating that instability in the factory output has increased. India Ratings and Research (Ind-Ra) said a sustained weakness in factory output month after month means that recovery on the industrial front is unlikely in the near term and now with the adverse impact of Covid-19 looming large it will get more prolonged. India Ratings said globally a number of economies have either given or planning to give both monetary and fiscal stimulus to overcome this crisis. Some impacts such as the collapsed global crude prices may be favourable for India and boost consumer demand and also impact central government fiscal arithmetic positively, as excise duty on oil products is now a specific duty. "However, many states have increased VAT on petroleum products and this may limit the pass-through to the consumers. However, India has limited monetary and fiscal space to provide stimulus though it is needed to address the demand side issues," it said. KKS NKD ANZ ABMABM

IIP shows marginal rise, inflation eases

Mumbai, Jun 12 () The rupee depreciated 31 paise to 76.10 against the US dollar in opening trade on Friday as strengthening US dollar, weak domestic equities and sustained foreign fund outflows weighed on investor sentiment. Forex traders said risk appetite has waned and there is growing concern about a resurgence of COVID-19 infections. The rupee opened weak at 76.10 at the interbank forex market, down 31 paise over its last close. It had settled at 75.79 against the US dollar on Thursday. Traders said, market participants are keenly awaiting Consumer Price Index (CPI) and Index of Industrial Production (IIP) data scheduled to be released later in the day for further cues. Meanwhile, the 30-share BSE benchmark Sensex was trading 795.59 points lower at 32,742.78 and broader NSE Nifty fell 221.80 points to 9,680.20. Foreign institutional investors were net sellers in the capital market as they sold shares worth Rs 805.14 crore on Thursday, according to provisional exchange data. Brent crude futures, the global oil benchmark, fell 1.27 per cent to USD 38.06 per barrel. The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.12 per cent to 96.85. Meanwhile, investor sentiment remained fragile amid rising coronavirus cases across the world. India recorded over 10,000 new COVID-19 cases in a day for the first time, taking the tally to 2,97,535, while the death toll rose to 8,498 with a record single-day spike of 396 fatalities, according to the Health Ministry data. Globally, the number of cases linked to the disease has crossed 75.14 lakh and the death toll has topped 4.21 lakh. DRR DRR ANS ANS

You Searched For "IIP Numbers" and got 7 results

These Three Charts Show Why Everyone Should Stop Freaking Out About Chinese Foreign Debt

Mamta Badkar

Budget 2016: High inflation and slow industrial growth present obstacles to FM Arun Jaitley

BI India Bureau

Rupee ends nearly flat at 71.28 against US dollar

PTI

India's core sector output rises by 7.4 per cent in December

ANI

Sensex, Nifty slips to red in morning trade after disappointing macro data

PTI

IIP shows marginal rise, inflation eases

PTI

Rupee tanks 31 paise, slips below 76 per dollar level in early trade

PTI

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