China Economics Update US and China no closer to a lasting resolution The US is attempting to pluck low-hanging fruit first, rather than hold out for a more complete trade deal with China. But reaching an agreement on the more contentious structural issues remains an... 14th October 2019 · 4 mins read
China Economics Update Another small step towards lower rates The newly-revamped Loan Prime Rate (LPR), the reference point against which banks now price loans, came in slightly lower for September. We think that more decisive cuts will materialize before long. 20th September 2019 · 3 mins read
China Economics Update Monetary policy has lost its oomph The ability of monetary easing to stimulate credit growth in China has diminished and we think this will lead the People’s Bank to pull down interbank rates further than most anticipate. But even this... 19th September 2019 · 4 mins read
China Economics Update Swine fever inflation shock to worsen Intervention by China’s government to halt the spread of African Swine Fever (ASF) and mitigate its impact on pork prices is proving ineffective. Inflation will next year rise above the government’s... 12th September 2019 · 3 mins read
China Economics Update Hong Kong’s banks can weather the storm Early-warning indicators suggest that Hong Kong’s banking system is primed for a crisis. And banks face multiple shocks from an economic recession, a housing market correction and capital outflows... 10th September 2019 · 5 mins read
China Economics Update RRR reduction to be followed by PBOC rate cuts The PBOC will release a portion of the reserves commercial banks’ hold at the central bank. While this will pull down interbank rates in the short run, the PBOC will need to cut its policy rate to... 6th September 2019 · 3 mins read
China Economics Update Transhipments and weaker RMB are blunting US tariffs China’s share of global exports has increased over the past year, despite US tariffs. Renminbi depreciation and the transhipments of goods to the US via neighbouring countries can take much of the... 29th August 2019 · 3 mins read
China Economics Update US tariffs strengthen the case for easing, weaker RMB With President Trump adding yet more US tariffs to the pipeline, the impact on China’s economy is starting to add up. With the drag on GDP growth set to rise to nearly one percentage point before long... 26th August 2019 · 3 mins read
China Economics Update China focuses its fire in retaliation The tariffs announced today by China’s government are a departure from previous rounds of retaliation: they focus almost entirely on further raising tariffs on products that have already been targeted... 23rd August 2019 · 3 mins read
China Economics Update Loan Prime Rate (Aug.) The newly revamped Loan Prime Rate (LPR), intended to replace the traditional benchmark lending rate as the reference point against which banks price loans, was launched today. The one-year LPR was... 20th August 2019 · 2 mins read
China Economics Update Interest rate reform with a side of policy easing A long-awaited shake-up of how China’s banks price loans should in time give policymakers much finer control of bank lending rates and could open the door to a quasi-rate cut as soon as tomorrow. But... 19th August 2019 · 4 mins read
China Economics Update Protests to push Hong Kong into a recession Disruptions from the ongoing protests look set to pull down Hong Kong’s GDP growth to its lowest since the global financial crisis this quarter and there is a growing risk of an even worse outcome if... 14th August 2019 · 4 mins read
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
