China Economics Update No float for the renminbi China will need to let the renminbi float at some stage if it intends to push ahead with plans to liberalise the capital account and encourage greater international use of the currency. But, recent... 17th January 2017 · 1 min read
China Economics Update Inflation soft in December but set to leap Headline inflation probably fell in December. But looking ahead, we think both consumer and producer price inflation are set to jump this quarter on the back of a surge in commodity price inflation... 9th January 2017 · 1 min read
China Economics Update PBOC down to its last $3 trillion The value of China’s foreign exchange reserves fell by 10% in 2016 as the People’s Bank fought to prevent a disorderly decline in the renminbi. With the level of reserves still well above most... 9th January 2017 · 1 min read
China Economics Update The People’s Bank fights back The year has started with another wave of stories about capital flooding out of China, alongside an unusually sharp strengthening of the renminbi. The currency gain over the past couple of days was... 5th January 2017 · 1 min read
China Economics Update Bond market sell-off overdone China is ending 2016 on a stronger footing economically but with growing strains in its financial markets. A slight tightening of monetary conditions has snowballed into a bond market sell-off, with... 22nd December 2016 · 1 min read
China Economics Update Inflation to remain in Goldilocks zone in 2017 Despite widespread concerns about deflation at the start of this year, consumer price inflation has averaged 2% in the first ten months of 2016, up from 1.4% in 2015. We expect headline inflation to... 6th December 2016 · 1 min read
China Economics Update Strong dollar making life hard for the PBOC The renminbi’s depreciation against the US dollar quickened in November, with the Chinese currency reaching fresh multi-year lows against its US counterpart. We expect it to breach 7.0 against the US... 30th November 2016 · 1 min read
China Economics Update Strong earnings push equity markets to ten-month high Chinese equities extended their rally in November, hitting the highest since January. The renminbi fell to an eight-year low against the US dollar, but strengthened against the trade-weighted basket... 30th November 2016 · 1 min read
China Economics Update Capital Flows Monitor (Oct.) According to our detailed estimates, capital flows out of China last month were the largest since January’s panic over the renminbi. While markets appear more at ease about the trajectory of renminbi... 22nd November 2016 · 1 min read
China Economics Update What weapons would China wield in a trade war? In the event of a trade war with the US, China’s response would go well beyond tariff increases. US companies would find their products and operations in China subject to tighter regulation that... 17th November 2016 · 1 min read
China Economics Update Opportunities for China from Trump’s election Despite the threat of being hit with high tariffs and being labelled a currency manipulator, China will see benefits in the election of Donald Trump. In the near term, the dollar’s weakness against... 9th November 2016 · 1 min read
China Economics Update Slower credit growth will keep a lid on inflation We expect consumer price inflation to have risen slightly last month but it should remain well within policymakers’ comfort zone. Looking ahead, while inflation may edge up in the short term, price... 4th November 2016 · 1 min read
China Economics Update Support from looser fiscal policy set to wane China’s overall fiscal stance has become increasingly loose in recent quarters on the back of a growing budget deficit and a renewed acceleration in off-budget borrowing by local government financing... 4th November 2016 · 1 min read
China Economics Update Interbank rates spike but don’t signal policy shift The renminbi dropped to a six-year low against the US dollar this month but it strengthened against most other currencies in the official currency basket. Meanwhile, although a jump in interbank rates... 31st October 2016 · 1 min read
China Economics Update Debt-to-equity swaps won’t resolve China’s debt woes Earlier this month, the Chinese government sketched out how it intends to address the build up of corporate debt and the threat it poses to financial stability and China’s broader economic outlook. On... 28th October 2016 · 1 min read
China Economics Update Capital Flows Monitor (Sep.) According to our detailed estimates, capital flows out of China picked up last month. Global investors have regained some of their appetite for renminbi assets, but Chinese households and firms are... 24th October 2016 · 1 min read
