China eyes winning global AI race as way to boost economy: Konrad Pietka

Computer chips and other advanced tech imports also recorded double-digit growth in the same period. The surge in technology imports spearheaded overall import growth, which totalled 8.4 per cent in April against the previous year. Similarly, exports increased 1.5 per cent, assisted by stronger global demand and internal deflationary pressures.

China is attempting to establish itself at the forefront of the AI (artificial intelligence) development race, with hopes that a transition up the manufacturing value chain into sectors such as electric vehicles will help offset the drag that the country’s overleveraged property sector and weak consumer confidence are having on the economy.

Tax breaks, subsidies and a benign regulatory environment have been implemented to support this objective.

However, the five per cent GDP growth target set by China’s government for this year is seen as ambitious by many analysts, with the central government hesitant to enact far-reaching stimulus measures and instead preferring a targeted sector approach.

Intensifying trade disputes and accusations of unfair trade practices are also unlikely to help China in reaching this goal.

At home, Bank of England Governor Andrew Bailey has hinted that the prospect of a summer rate cut could be more probable than markets originally anticipated.

The market is presently expecting two 0.25-point cuts by the end of the year.

Despite the more dovish tone, any potential cuts will still be contingent on data showing that inflation will remain low and gravitate towards the BoE’s two per cent target in the near term.

Incomplete labour market statistics and elevated service price inflation could both prove to be barriers to this.

If a cut does materialise by June, it would highlight a growing divergence between the US and Europe in terms of interest rates.

Countries such as Sweden and Switzerland have already reduced rates, while stubborn inflation in the US is delaying The US Federal Reserve’s expected decision to lower borrowing costs.

Even though Andrew Bailey reaffirmed that there is no law that says that The Fed moves first, the BoE making a cut before The Fed could cause sterling to depreciate against the dollar, increasing import costs and, in turn, reigniting inflationary pressure.

BoE rate cuts would, however, be appreciated by both the Government and investors alike as lower rates are more conducive to economic growth and rising equity valuations.

Traders have estimated the probability of a June rate cut to be 45 per cent.

In Yorkshire, 3M Buckley Innovation Centre, a subsidiary of the University of Huddersfield, has welcomed a range of new businesses, with specialities ranging from property finance to vet diagnostics.

The firms are expected to benefit from facilities in the innovation centre itself, as well as access to recruitment, advanced technology and research expertise from the Engineering and Business faculties at the University of Huddersfield.

Konrad Pietka is part of the Investment Research Team at Redmayne Bentley