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
China Economics Update Easy credit lifting the service sector China’s GDP data are widely maligned. But one area where the figures are useful is in the detail they provide on the service sector. Figures for Q3 show stronger activity in retail and real estate... 20th October 2016 · 1 min read
China Economics Update Coming property price correction to weigh on growth The sharp rise in property prices over the past year, fuelled by a surge in mortgage lending, is clearly not sustainable and we expect a correction before long. This may not be the threat to financial... 11th October 2016 · 1 min read
China Economics Update Food prices drive inflation rebound Headline inflation likely rose last month on the back of a pick-up in food prices. But after a near-term rise, we expect price pressures to ease again further ahead. 6th October 2016 · 1 min read
China Economics Update Rise in repo rate not a sign of policy tightening With the renminbi on the cusp on joining the IMF’s SDR basket, the PBOC appears to have been working hard to hold it steady in recent weeks. Meanwhile, attention has been drawn to a pick-up in the 7... 30th September 2016 · 1 min read
China Economics Update How much would a Trump tariff hurt China? An across-the-board 45% tariff on imports from China may end up raising retail prices in the US by only 10%, and less still if Chinese policymakers responded by allowing the renminbi to weaken. With... 29th September 2016 · 1 min read
