China Economics Update The PBOC disappoints again Despite calling on banks to nudge down borrowing costs, the PBOC stopped short of requiring that they lower the Loan Prime Rate (LPR) benchmarks this month. For now, policymakers are mostly relying on... 20th April 2022 · 4 mins read
China Economics Update RRR cut alone will do little to boost credit growth The People’s Bank (PBOC) has just announced a cut to the reserve requirement ratio (RRR). This will help nudge down bank lending rates. But in order to make much difference to credit growth it needs... 15th April 2022 · 4 mins read
China Economics Update PBOC shows surprising restraint amid downturn The People’s Bank (PBOC) forwent the opportunity to lower its policy rates today. That’s somewhat surprising given the sharp economic downturn and recent calls from China’s leadership for monetary... 15th April 2022 · 2 mins read
China Economics Update COVID-19 derails China’s domestic recovery yet again The current virus wave will deal the biggest blow to China’s service sector since the original outbreak. If the lockdowns already imposed can suppress infections quickly then disruption to industry... 16th March 2022 · 4 mins read
Global Economics Update China’s export hubs in worst outbreak since Wuhan Half of China’s exports are produced in areas that are now experiencing COVID outbreaks and three quarters of its exports are shipped from them. It is still possible that infections can be suppressed... 16th March 2022 · 4 mins read
China Economics Update China stands to lose not gain from war in Ukraine As Russia becomes increasingly isolated, it will lean more heavily on China as a trading partner. That will present some opportunities for Chinese firms to take market-share from western suppliers and... 2nd March 2022 · 6 mins read
China Economics Update China can’t shield Russia from sanctions The financial sanctions that have been imposed on Russia by the West put significant practical constraints on China’s dealings with Russia even where they don’t restrict them directly. There is little... 2nd March 2022 · 4 mins read
China Economics Update China won’t hurt itself to help Russia China’s leadership is trying to straddle a geopolitical divide. Russia is an ally, but being seen to take its side would hasten China’s decoupling from the West. Most likely, China will support Russia... 24th February 2022 · 3 mins read
China Economics Update Lockdown to tip Hong Kong into a deep recession The expansionary budget unveiled today will provide some support to Hong Kong’s economy this year. But this is unlikely to fully offset the drag from Fed rate hikes, let alone the massive hit to... 23rd February 2022 · 6 mins read
China Economics Update Olympics highlights growing rift with the West At the Beijing Winter Olympics, China is once again displaying its sporting prowess. But the international reception has been notably icier than that for the 2008 Summer Games, highlighting that China... 17th February 2022 · 6 mins read
China Economics Update China-Taiwan ≠ Russia-Ukraine A Russian invasion of Ukraine would not make a Chinese attack on Taiwan more likely and would not undermine the willingness or ability of Taiwan’s allies to come to its defence. 15th February 2022 · 4 mins read
China Economics Update A pause, not an end, to easing The People’s Bank (PBOC) has refrained from further policy easing for the time being. It left rates unchanged today when injecting liquidity via its reverse repo operations and medium-term lending... 15th February 2022 · 2 mins read
China Economics Update US-China trade deal stalemate will drag on China made none of the additional purchases it committed to under the Phase One trade deal. The Biden administration isn’t pleased but doesn’t have good options to force China to do more. And China... 10th February 2022 · 5 mins read
China Economics Update Deposit rates may be next PBOC target Today’s reductions to both the one-year and five-year Loan Prime Rates (LPR) continue the PBOC’s efforts to push down borrowing costs. We expect additional easing to follow in the coming months... 20th January 2022 · 3 mins read
China Economics Update PBOC takes a bigger bite of the easing apple The People’s Bank (PBOC) has stepped up its efforts to loosen monetary conditions, following up last month’s reduction to the Loan Prime Rate (LPR) with cuts to the rates at which it lends to banks... 17th January 2022 · 2 mins read
China Economics Update Why we still think the renminbi will weaken China’s currency was remarkably stable against the US dollar in 2021 and appreciated against other major currencies. But we doubt that trend will continue this year: a slowing economy, monetary policy... 13th January 2022 · 4 mins read
