China Economics Update Bumps in the road but no fiscal cliff Yesterday's budget left us none the wiser about how policymakers plan to manage the abrupt halt in off-budget financing that new rules are imposing on local governments this year. There could be some... 6th March 2015 · 1 min read
China Economics Update February bounce in inflation likely to be short-lived After a bounce in February, inflation in China looks likely to drift lower in coming months – but remain positive, we think – before rebounding in the second half of the year. 5th March 2015 · 1 min read
China Economics Update Initial thoughts on the National People’s Congress The opening day of the National People’s Congress leaves us upbeat that the government will push ahead with reforms and make further progress in rebalancing the economy away from investment, even if... 5th March 2015 · 1 min read
China Economics Update Rate cut alone won't boost lending The People's Bank has cut benchmark rates in order to help some indebted firms cope with the rise in real borrowing costs that has resulted from lower inflation. But the central bank still appears to... 2nd March 2015 · 1 min read
China Economics Update What to watch at the National People’s Congress The unveiling of a new, lower GDP growth target at the National People’s Congress would be an encouraging sign that the government is facing up to the continued slowdown in China’s sustainable rate of... 27th February 2015 · 1 min read
China Economics Update Funding costs set to fall Market interest rates rose over the past month despite a required reserve ratio cut and repeated liquidity injections by the People’s Bank. We expect conditions to ease in coming weeks as demand for... 27th February 2015 · 1 min read
China Economics Update Hong Kong set for rebound in the year of the sheep Hong Kong’s government has unveiled a budget that should help boost growth this year. There are other reasons to be optimistic about the outlook too, even though today’s GDP data confirmed that growth... 25th February 2015 · 1 min read
China Economics Update Could Hong Kong survive a property market collapse? Property prices in Hong Kong have risen to record highs on the back of accommodative monetarypolicy in the US and strong demand from mainland China. With the Federal Reserve set to tightenpolicy this... 23rd February 2015 · 1 min read
China Economics Update Should we fear deflation in China? The slide in inflation in China, as elsewhere, has been driven primarily by commodity price falls due to increases in global supply. It is unambiguously positive for China’s economy. Evidence that... 16th February 2015 · 1 min read
China Economics Update New Year effect pulls inflation to five-year low We expect consumer price inflation to have fallen to the lowest in more than five years in January, dragged down by further declines in commodity costs and the ususal volatility around Chinese New... 9th February 2015 · 1 min read
China Economics Update PBOC signals continued policy support Today’s required reserve ratio cut is primarily a signal that the People’s Bank is maintaining the more accommodative stance adopted in November rather than a response to capital outflows or “currency... 4th February 2015 · 1 min read
China Economics Update Shrinking workforce not a major threat to growth The release of figures showing that China’s working age population continued to fall last year has revived concerns about demographic headwinds to China’s growth. In this China Watch we discuss why... 30th January 2015 · 1 min read
China Economics Update Equities hit choppy waters Chinese equities turned more volatile over the past month, and there are signs that some steam may be coming out of the market. Meanwhile, market interest rates have been relatively stable, with a... 30th January 2015 · 1 min read
China Economics Update How durable is the Hong Kong peg? The Swiss National Bank’s (SNB) decision last week to abandon its exchange rate ceiling has put Hong Kong’s peg to the US dollar under fresh scrutiny. While the peg creates a number of problems, it... 20th January 2015 · 1 min read
China Economics Update How much does today’s slide in Shanghai matter? There had been signs even before today’s share price slide that China’s equity markets were coming off the boil. The direct impact of any sustained slump in equity prices would be small, both in China... 19th January 2015 · 1 min read
China Economics Update No end in sight to build-up in China's credit risks Recent progress made towards curbing the rise of China's credit-to-GDP ratio is likely to slow going forward as it becomes more difficult to continue to rein in credit without undermining growth. 19th January 2015 · 1 min read