China Economics Update FX manipulator label to further strain bilateral relations The US decision to label China a currency manipulator is on shaky economic grounds since, if anything, the renminbi would be even weaker than it is now without policy support. But the move is another... 6th August 2019 · 3 mins read
China Economics Update PBOC weaponizes the renminbi The PBOC has allowed the renminbi to fall to its weakest level in a decade in response to trade tensions. It appears to have decided that, given the increasingly dim prospects of a trade deal with the... 5th August 2019 · 3 mins read
China Economics Update The trade war is about to hit China’s surplus The trade war between the US and China has made barely any difference to the scale of their bilateral trade imbalance, which was President Trump’s original concern. But China is reaching the limits of... 2nd August 2019 · 4 mins read
China Economics Update PBOC rate cuts appear imminent The People’s Bank has pushed down overnight interbank rates to multi-year lows. This is partly a response to market jitters following the Baoshang Bank takeover and may partially reverse in the coming... 25th June 2019 · 2 mins read
China Economics Update What do the protests mean for Hong Kong’s economy? The immediate economic impact of the protests in Hong Kong will be very small. But continued erosion of Hong Kong’s autonomy, which is threatened by the proposed extradition law, would undermine a key... 12th June 2019 · 1 min read
China Economics Update Preparing for a long trade war A deal to end the US-China trade dispute appears further away than ever. We now expect all US goods imports from China to be subject to a 25% tariff by early next year. China is likely to respond with... 6th June 2019 · 1 min read
Global Markets Update PBOC still wary of CNY weakness despite tariff threat The 2% fall in the renminbi since the US-China trade war flared up again reflects market pressure more than a deliberate policy choice – Chinese policymakers have actually been trying to slow its... 16th May 2019 · 1 min read
China Economics Update Three reasons for China’s modest retaliation We think the small scale of China’s planned tariff hikes reflects three factors – a desire not to escalate tensions, the limited scope for further tariffs and China’s ability to use other tools to... 14th May 2019 · 1 min read
China Economics Update Four implications of the re-escalation in trade tensions President Trump has threatened an imminent expansion of tariffs against China. We expect this to result in stronger headwinds to growth, more policy easing, a weaker renminbi and a stock market rout. 6th May 2019 · 1 min read
China Economics Update Targeted RRR cut to shore up lending growth Bank lending to small firms should receive a sizeable boost from the planned reduction in the required reserve ratio for many rural banks, pushing up overall bank loan growth in the process. While... 6th May 2019 · 1 min read
China Economics Update Weak profits strengthen case for benchmark rate cuts A sharp fall in earnings for industrial firms in January and February shows the pressure that weak demand is putting firms’ balance sheets under. We think officials will respond by cutting benchmark... 27th March 2019 · 1 min read
China Economics Update Initial thoughts on the National People’s Congress The key takeaway from today’s policy announcements at the opening of the National People’s Congress is that the leadership are still trying to balance efforts to support growth with concerns about... 5th March 2019 · 1 min read
China Economics Update Growth in Hong Kong to remain weak in 2019 Hong Kong’s economy ended last year on a weak note as exports slumped and household spending softened. We think growth will remain subdued in the months ahead. The relatively expansionary budget... 27th February 2019 · 1 min read
China Economics Update Foreign debt not a major risk in the near term Concerns about China’s external debt have increased recently as interest rates abroad have risen and slowing domestic economic momentum has put firms’ balance sheets under strain. But much of the... 20th February 2019 · 1 min read
China Economics Update Stimulus far smaller than in past downturns China looks likely to introduce only about half as much fiscal and monetary stimulus in response to the current downturn as it did in 2015/16. Any rebound in growth will be much more tepid as a result... 6th February 2019 · 1 min read
China Economics Update Imports ringing alarm bells Most recent signs point to a gradual deceleration in China’s economy but the import data are a key exception, showing an abrupt contraction in November and December. While there appear to be several... 29th January 2019 · 1 min read