China Economics Update How much longer will Hong Kong hold on to its dollar peg? The viability of Hong Kong’s dollar peg is again in question although the evidence linking recent asset price movements to the peg is weaker than many think. In any case, none of the alternatives to... 11th November 2010 · 1 min read
China Economics Update More tightening on the way Consumer price inflation rose more than expected last month, but it continues to be solely a food price problem. Of more concern is that loan growth has not slowed, despite strong signals from the... 11th November 2010 · 1 min read
China Economics Update Inflation Monitor (Oct.) We think that consumer price inflation peaked in October. With all the recent increase in the headline rate coming from food prices, inflation is only likely to continue rising if there are further... 9th November 2010 · 1 min read
China Economics Update People's Bank signals intent to "normalise" policy The Q3 monetary policy report published earlier this week is the first formal policy statement from the People’s Bank (PBC) since interest rates were hiked a fortnight ago. In it, the PBC mentions a... 4th November 2010 · 1 min read
China Economics Update Is China changing course? The People’s Bank (PBC) delivered a jolt to global markets when it unexpectedly raised interest rates last week. Never mind that the small increase will have a negligible impact on China’s economy... 25th October 2010 · 1 min read
China Economics Update Growth stabilises, inflation still not a threat Today's data did not show the upsurge in inflation that some had thought might have triggered this week's interest rate hikes. Q3 GDP growth too was in line with initial expectations. Instead, the... 21st October 2010 · 1 min read
China Economics Update What is behind China's rate hike? With its surprise decision to raise benchmark interest rates, the People’s Bank of China is giving a strong signal to banks to rein in lending after the surge of the last few weeks. The immediate... 19th October 2010 · 1 min read
China Economics Update Rapid renminbi rise will not be sustained China is again responding to foreign pressure with a surge in the renminbi. But a coming slowdown in exports, a desire to limit the predictability of the renminbi’s rise and, possibly, a rebound of... 18th October 2010 · 1 min read
China Economics Update Surge in FX reserves throws spotlight on Chinese intervention The $194bn increase in China’s foreign exchange reserves in the third quarter was one of the biggest on record. There are two immediate implications. 13th October 2010 · 1 min read
China Economics Update Looking ahead to the Five-Year Plan The most closely-watched data release this month will be that for third quarter GDP, due on the 21st. But a more momentous event will take place a few days earlier when the Communist Party leadership... 11th October 2010 · 1 min read
China Economics Update What should we make of the rumoured RRR hike? Reuters is reporting that the required reserve ratio (RRR) for major banks has been raised. The People’s Bank (PBC) has not confirmed the move, but if true the best explanation is that the large banks... 11th October 2010 · 1 min read
China Economics Update Can exporters survive a stronger renminbi? Export margins did not fall when the renminbi was last rising against the dollar and Chinese producers continued to gain global market share. There is no reason to think that China’s export sector is... 7th October 2010 · 1 min read
China Economics Update Inflation Monitor (Sep.) Consumer price inflation is probably close to a peak. If the People’s Bank does not raise interest rates in the next few weeks (we think it won’t), it will find it increasingly hard to justify doing... 5th October 2010 · 1 min read
China Economics Update Where are interest rates heading? What should we make of speculation that interest rates could soon be hiked? Rates have been rising in much of emerging Asia for a while and we believe that rate increases would be a good idea for... 30th September 2010 · 1 min read
China Economics Update Would dollar weakness force China to revalue? Chinese policymakers probably would respond to any substantial fall in the dollar by allowing more rapid renminbi appreciation. But hopes that a dollar collapse could force China into the sort of... 29th September 2010 · 1 min read
China Economics Update The view from the ground - Q3 2010 China’s businesses and banks are increasingly confident about the economic situation, but consumers are downbeat, preferring by a wide margin to save rather than spend. 20th September 2010 · 1 min read
