China Economics Update US-China trade tensions remain a threat The US Treasury has again chosen not to label China a currency manipulator. With US economic prospects looking brighter, the immediate risk of a flare up in tensions over China’s trade and currency... 7th February 2011 · 1 min read
China Economics Update Property tax falls short of (low) expectations The property tax plans that were announced yesterday look more like token measures than serious attempts to dampen property market speculation or provide local governments with a secure source of... 28th January 2011 · 4 mins read
China Economics Update China’s imbalances getting wider China’s dual imbalances – its trade surplus and its domestic reliance on investment over consumption – both widened in real terms in 2010. Government fiscal policy made things worse. 24th January 2011 · 1 min read
China Economics Update Coming growth slowdown to ease overheating fears China’s economy ended 2010 with momentum strong but is likely to slow in 2011 as real estate construction spending weakens and stimulus projects reach completion. With inflation also now steadying... 20th January 2011 · 1 min read
China Economics Update Property tax no panacea Even if we shared the common view that China’s property market is in a bubble, the tax that seems likely to be introduced soon on residential property would not be a solution. 19th January 2011 · 1 min read
China Economics Update Inflation Monitor (Dec.) Consumer price inflation probably fell in December, as food prices finally stopped rising. Non-food inflation remains low and neither capacity constraints nor monetary growth look likely to push it... 18th January 2011 · 1 min read
China Economics Update Reserve requirements set to become primary policy tool The People’s Bank is shifting towards using reserve requirements as a primary tool to limit credit growth. This is another reason to believe that interest rates will not rise as far as many expect in... 14th January 2011 · 1 min read
China Economics Update Renminbi set to outperform market expectations in 2011 President Hu Jintao’s visit to the US later in January will draw attention back to the renminbi. We believe that markets are underestimating the likely pace of appreciation over the year ahead. In... 7th January 2011 · 1 min read
China Economics Update The big risk for 2011 Ask any number of people in China to identify the biggest economic problem the country faces in 2011 and they, along with most analysts, will agree: inflation. They may all be wrong. 4th January 2011 · 1 min read
China Economics Update The view from the ground - Q4 2010 China’s businesses have grown in confidence in the last quarter but banks and consumers are far less upbeat. Banks are increasingly worried about overheating and the need for policy tightening... 16th December 2010 · 1 min read
China Economics Update Are policymakers being complacent about inflation? Consumer price inflation increased by much more than expected in November. But recent policy moves and official statements, including that from this weekend’s high-level policy meeting, give the... 13th December 2010 · 1 min read
China Economics Update Strong credit growth stokes expectations of tightening Today’s data showing continued rapid lending and very strong import growth will do nothing to calm market concerns that monetary policy in China is falling behind the curve. A rate hike seems imminent... 10th December 2010 · 1 min read
China Economics Update Inflation Monitor (Nov.) Consumer price inflation probably rose further in November, but the upward momentum appears to be fading. Weekly data show that vegetable prices have fallen in each of the last four weeks. Unless... 8th December 2010 · 1 min read
China Economics Update A look ahead to 2011 The main events for December are the high-level meeting at the end of this week to discuss economic policy for the coming year, and the release of November’s inflation data in a week’s time. 6th December 2010 · 1 min read
China Economics Update Policy normalisation already well advanced Monetary conditions are not particularly loose in China and markets may be overestimating the degree of tightening to come. We expect several increases to the required reserve ratio over the next 12... 2nd December 2010 · 1 min read
China Economics Update Would price controls work? Price controls may appeal to officials eager to be seen to be doing something about rising inflation, but China’s experience with controls has not been encouraging. For markets, they could play either... 16th November 2010 · 1 min read
