Hong Kong stocks notch 2%; China reports inflation data in line with

Wall Street pros are increasingly sounding the alarm on a looming recession.

As economic growth slows and inflation stays higher for longer, how should investors position? Veteran investor Nancy Tengler shares her favorite dividend stocks with CNBC.

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— Zavier Ong

Beijing’s “U-turn” on Covid policies is leading to both confusion and optimism, said Steven Lynch, managing director at the British Chamber of Commerce in China.

“There’s a lot of optimism and hope for 2023, but there is huge amounts of confusion,” he told CNBC’s “Squawk Box Asia,” describing the departure from strict Covid rules as happening “almost overnight.”

He said there may still be “enormous inconsistencies” between local policies and the central government’s rules, and people remain concerned about falling sick.

“One thing is very clear Covid is now here. Covid is pretty rife here in Beijing. And I think that brings a whole new set of challenges to what’s going to face China,” he said.

— Abigail Ng

China’s inflation is likely to stay below 3% in the next 12 to 18 months, and the central bank is comfortable with this range, according to Jack Siu, Greater China chief investment officer at Credit Suisse.

“We don’t think CPI is an issue in China, in fact, it’s going to be remaining steady within this range of 1% to 3% in the foreseeable future,” he told CNBC’s “Street Signs Asia.” Inflation soared in many economies, but consumer prices in China remained moderate due to weak demand.

But China is likely to see “a resurgence in consumer activity” in the coming six months as people get used to living with the virus after some back and forth in the reopening of the economy, Siu said.

“In the second quarter, we expect the GDP to rally to 6.1% — partly it’s base effects, partly because people are living more normally,” he said.

— Abigail Ng

China’s producer price index fell 1.3% in November compared to a year ago, extending its decline after shedding 1.3% in October, and slightly beating estimates for a 1.4% contraction in a Reuters poll.

The nation’s consumer price index rose 1.6% in November on an annualized basis, in line with expectations and easing from October’s reading of 2.1%.

The onshore and offshore Chinese yuan strengthened, and were around 6.94 per dollar shortly after the economic data releases.

— Lee Ying Shan

Some global consumer tech companies could gain as China relaxes some Covid-19…