China Economics Update What is driving capital out of China? The recent flood of capital leaving China has been driven primarily by increased scepticism that the People’s Bank will hold to its pledge to keep the renminbi stable. The fact that the PBOC has ended... 12th January 2016 · 1 min read
China Economics Update Economy slow but still stable despite market meltdown China’s equity markets continue to tumble, its currency is under unprecedented pressure and Chinese policymakers’ reputation for competence is looking ever more tarnished. Contrary to many of the... 11th January 2016 · 1 min read
China Economics Update Inflation picking up The weekend’s inflation data should provide a respite from fears that China’s economy and financial markets are collapsing. We foresee another rise in consumer price inflation, which should further... 7th January 2016 · 1 min read
China Economics Update How long can the PBOC hold on? The willingness of the People’s Bank to sell over $100bn of foreign exchange reserves last month is a measure of its belief that a stable currency is in China’s interests and that current downward... 7th January 2016 · 1 min read
China Economics Update When might things improve? This week’s declines in China’s stock markets and currency raise a challenge to our relatively upbeat view of near-term prospects. But we continue to believe that growth is more likely to pick up than... 6th January 2016 · 1 min read
China Economics Update Basket shift adds to depreciation pressure Strong hints from the People’s Bank that it is shifting the focus of its exchange rate management to a trade-weighted currency basket have intensified expectations of further renminbi declines. But... 23rd December 2015 · 1 min read
China Economics Update Further signs that the economy is turning a corner China’s activity data for November provide further evidence that policy easing has helped to stabilise the economy. We continue to expect conditions to improve over the coming months. 14th December 2015 · 1 min read
China Economics Update PBOC hints at move to tracking basket The People’s Bank appears to be shifting its management of the renminbi to tracking a currency basket rather than the dollar. While some will see this as cover for currency devaluation, we suspect the... 11th December 2015 · 1 min read
China Economics Update What to expect in 2016 Sentiment on China’s economic outlook remains downbeat with most anticipating a deeper downturn next year. In contrast, we think developments could surprise to the upside. 10th December 2015 · 1 min read
China Economics Update Broad price pressures set to rise Despite widespread concerns about deflation, consumer price inflation has remained within a narrow (positive) range over the course of this year. With credit growth rebounding and wage growth... 8th December 2015 · 1 min read
China Economics Update Fiscal deposit auctions could provide stimulus shot A report today suggesting that all local governments may soon be allowed to auction off their fiscal deposits deserves more attention than it has received. Such a move would have important... 4th December 2015 · 1 min read
China Economics Update Drag on growth from anti-graft measures easing Three years on, there is no sign that China’s anti-corruption campaign is being eased, but its drag on economic growth is fading. 4th December 2015 · 1 min read
China Economics Update Renminbi joining SDR basket won't increase demand The IMF has just confirmed that the renminbi will be added to its SDR basket. Thismay be of symbolic significance to some but we think it will make hardly anydifference to currency demand. In other... 30th November 2015 · 1 min read
China Economics Update Fiscal drag now turning to fiscal boost The debate about China’s economic outlook hinges on what caused growth to slow early in 2015. One of the main culprits, in our view, was fiscal policy, which tightened significantly in late-2014 and... 30th November 2015 · 1 min read
China Economics Update PBOC shifting monetary policy framework The main significance of today’s announcement by the People’s Bank (PBOC) that it is cutting standing lending facility (SLF) interest rates is that it is experimenting with a new monetary policy... 19th November 2015 · 4 mins read
China Economics Update SDR inclusion unlikely to boost renminbi demand The IMF’s decision to include the renminbi in the SDR basket will not directly increase demand for renminbi assets. The implicit endorsement of the renminbi as a reserve asset is unlikely to sway the... 16th November 2015 · 1 min read
