China Economics Update Local government debt swap doubled Today’s doubling of the quota for local government debt swaps indicates that the central government believes the programme has so far been a success, even if banks have only been buying the new bonds... 10th June 2015 · 1 min read
China Economics Update Price pressures on the rise A seasonal slide in vegetable prices that should prove short-lived may have pulled inflation down in May. But the bigger picture is that underlying price pressures appear to have picked up. We expect... 5th June 2015 · 1 min read
China Economics Update More evidence GDP growth overstated Flaws in how China’s GDP data are calculated exaggerated both the downward pressure on prices in the first quarter and the rate at which the economy is growing. 4th June 2015 · 1 min read
China Economics Update Equities on a rollercoaster This month ended with a crash on China’s stock markets. But if the equity bubble of 2007 is any guide, this may not be the end of the speculative rally. 29th May 2015 · 1 min read
China Economics Update Are policymakers pushing on a string? The failure of policy loosening over the past six months to stimulate an economic rebound has led some to suggest that elevated real interest rates or oppressive debt burdens are hobbling corporate... 29th May 2015 · 1 min read
China Economics Update Fiscal policy to be more supportive in coming quarters Policymakers are moving to ensure that funding difficulties don’t disrupt local government spending plans. This doesn’t constitute an about-turn in efforts to restrict off-budget borrowing, as some... 18th May 2015 · 1 min read
China Economics Update Deposit rate liberalisation still on track Stories that the PBOC banned banks from increasing deposit rates when it raised the deposit rate ceiling at the weekend are another sign of policymakers’ ambivalence towards the use of market-oriented... 15th May 2015 · 1 min read
China Economics Update Chinese tourists to keep current account surplus in check China’s goods trade surplus last year was a third higher in dollar terms than at the previous peak in 2008. Yet the country’s current account surplus – the broadest measure of its economic imbalance... 12th May 2015 · 1 min read
China Economics Update PBOC injects another 25bp of support Today’s cut to benchmark interest rates is not a sign of panic as some will argue but a rational response to weaker-than-expected data. Policymakers have room to act more forcefully if needed but are... 11th May 2015 · 1 min read
China Economics Update Gains from migration haven’t been exhausted Migration into China’s cities appears to be slowing but the economic gains it has brought are far from drying up. Improvements to agricultural productivity should free up rural labour for years to... 6th May 2015 · 1 min read
China Economics Update Why the RRR is still an effective policy tool in China There appears to be a great deal of confusion around how cuts to the required reserve ratio (RRR) affect China’s economy, with some even suggesting that changes to the RRR have no impact on monetary... 4th May 2015 · 1 min read
China Economics Update New account openings add fire to rally in equities Chinese equities have continued to surge, helped by a further jump in new account openings. Although equity prices are looking increasingly divorced from economic fundamentals, with policymakers set... 30th April 2015 · 1 min read
China Economics Update Is the People’s Bank about to launch QE? Unconfirmed reports that the People’s Bank is considering buying local government bonds have sparked talk of impending QE in China. That’s wide of the mark: unlike with asset purchase programs... 28th April 2015 · 1 min read
China Economics Update Equity boom propping up GDP growth, for now The frenetic opening of trading accounts and a surge in equity turnover have produced a boom for brokerages that appears to have added more than half a percentage point to China’s GDP growth last... 16th April 2015 · 1 min read
China Economics Update Will curb on visitors hurt Hong Kong’s economy? New restrictions on the number of visits mainland residents can make to Hong Kong will affect only a small proportion of visitors to the territory. The retail sector will be put under further pressure... 16th April 2015 · 1 min read
China Economics Update Headwinds to continue weighing on growth in 2015 There was another strong bout of seasonal disruption in the monthly data released today, but confirmation too that key trends from last year have continued into 2015. The property sector remains a... 15th April 2015 · 1 min read
