We're seeing weakness on the consumer side of the Chinese economy, says China Beige Book COO

Summary

China Beige Book COO Shehzad Qazi details a genuine Chinese consumer slowdown and industrial weakening, driven by lower foreign orders, potential state-mandated output cuts, and structural shifts like electrification. He argues these demand factors, alongside record stockpiling, explain why oil prices haven't surged despite geopolitical tensions, and suggests China is cutting its own deals in the region.

• China Beige Book data shows consumer-side weakness in travel and holiday spending.
• Industrial activity is also softening, partly due to declining overseas orders.
• Beijing may be directing factories to reduce production over Hormuz disruption fears.
• China's oil demand is subdued by slower economy, last year’s massive stockpiling, and electrification.
• China has reportedly negotiated directly with the Houthis to allow its container ships through.
• Chinese AI models could replicate Western model missteps, but no hard US action is expected soon.