Your Sunday Asia Briefing: China’s Costly Return, Chip Sales

Adam Majendie, Bloomberg News

A statue celebrating the upcoming Year of the Rabbit at a shopping mall in Beijing, China, on Thursday, Dec. 29, 2022. China could see as many as 25,000 deaths a day from Covid-19 later in January, casting a shadow over the start of the first Lunar New Year festivities without pandemic restrictions. , Bloomberg

(Bloomberg) -- Intro

The big homecoming: Starting today, China no longer requires quarantine for arrivals, marking an end to Beijing’s efforts to keep out a virus that’s become endemic across the world. For thousands of Chinese citizens living abroad, the change just two weeks before the Lunar New Year holiday is a chance to finally visit home.

The big spike: China’s rapid reopening has been marred by a huge wave of new Covid cases and allegations the country isn’t providing sufficient data on caseloads and deaths from the virus. But health observers are now looking to see how rapidly infections peak in major cities, an indication of how rapidly the world’s second-largest economy could get back to normal.

The big data: Reports this week will highlight the initial economic damage from China’s abrupt end to Covid-Zero restrictions, with exports likely to sink further and services and credit also taking a hit. In Japan, watch for Tokyo’s inflation, which could set a record, while prices may also inch higher in India, keeping pressure on the central bank to raise rates at its next meeting.

The big earnings: Following Samsung Electronics Co.’s profit slump due to weak demand for memory chips, smartphones and displays, attention this week will be fixed on results at Taiwan Semiconductor Manufacturing Co., with investors looking for indications about the global chip outlook as well as the company’s plans to diversify production abroad. In the US, the major banks roll out the new earnings season starting on Friday after the worst year for investment banking since 2016.

The big bite: Inflation remains front and center of economic policies around the world, with food costs a particularly stark measure in many developing economies. This newsletter looks at the factors that could affect global supply lines this year.

The big V: And for those who think low interest rates will come back once the inflation threat has passed, Larry Summers has a word of advice.

The big take: ICYMI, here’s our New Year guide to Wall Street’s expectations for 2023.

And finally, how about a new job for the new year? From rocket scientists who make pizza, to the quitters turned climate warriors, there’s plenty of opportunities for change.

Have an empowering week.