China Economics Weekly Investment still the preferred policy lever to pull We wouldn’t take this week’s pledge from the Politburo to tilt stimulus towards consumption at face value. The only concrete measures along these lines that have been announced recently have been more... 2nd August 2024 · 5 mins read
China Economics Weekly Monetary and fiscal policy turning more supportive Policymakers’ concerns about the near-term outlook have become much more visible over the past couple of weeks, with weak Q2 growth and poor stock market performance triggering rate cuts and talk of... 26th July 2024 · 7 mins read
China Economics Weekly Services-led slowdown, Third Plenum signals The detailed breakdown of Q2’s weaker-than-expected GDP figures point to a broad-based slowdown in almost all parts of the service sector, leaving growth increasingly dependent on industry. The Third... 19th July 2024 · 5 mins read
China Economics Weekly PBOC narrows rate corridor, overcapacity worsens The PBOC’s expanded open market operations effectively narrow the interest rate corridor for short-term interbank rates. This won’t have any immediate consequences for monetary conditions. But it does... 12th July 2024 · 6 mins read
China Economics Weekly PBOC may struggle to tame the bond market The PBOC will soon start borrowing government bonds, opening the door to sales aimed at arresting the decline in long-term yields, which the central bank sees as a growing financial stability risk... 5th July 2024 · 8 mins read
China Economics Weekly Consumption support still falling short New government guidelines on how to create "new consumption scenarios" are still largely focused on supply-side reform, while little is being done to address demand weakness. Alongside a ramp-up in... 28th June 2024 · 5 mins read
China Economics Weekly PBOC: Don’t worry about the weakness of credit Governor Pan Gongsheng’s comments about PBOC bond buying and about changes to the monetary policy framework caught the headlines this week. But it was what he said about weak credit growth that caught... 21st June 2024 · 6 mins read
China Economics Weekly Europe leaves the road open for China’s EV-makers China protested the European Commission’s imposition of additional tariffs on Chinese-made electric vehicles this week but, if the EU goes no further, China’s government is likely to see this as a... 14th June 2024 · 6 mins read
China Economics Weekly Still struggling to curb dependence on China Today’s trade data underscore again the extent to which global demand is supporting China’s economy, and how little impact the trade restrictions of recent years have had. China’s export volumes have... 7th June 2024 · 6 mins read
China Economics Weekly Fiscal tailwinds to return, export rush lifts freight rates Today’s PMIs suggest that China’s rebound is faltering. That appears to reflect a drying up of fiscal support after the initial surge at the beginning of the year. There’s more in the pipeline though... 31st May 2024 · 5 mins read
China Economics Weekly Bank deposit exodus, chip self-sufficiency The recent slowdown in deposit growth does not signal a recovery in risk appetite among firms and households. On the contrary, it is being driven by their reluctance to borrow and their preference for... 24th May 2024 · 5 mins read
China Economics Weekly Property support, imbalances growing, tariff retaliation The property support measures outlined today are significant. If local governments and SOEs take advantage of the funding on offer to buy unsold inventory from developers, sales would rise by around... 17th May 2024 · 5 mins read
China Economics Weekly Targeted regulations won’t fix structural overcapacity With the EU and US both apparently moving closer to imposing new trade restrictions on EVs and possibly on other "new energy" products from China, China's state media this week made a concerted effort... 10th May 2024 · 7 mins read
China Economics Weekly Developer financing still weak, green loans surge The continued weakness of credit demand is holding back China's economic recovery. While lending to manufacturers continues to be strong – particularly for those engaged in green technology production... 3rd May 2024 · 7 mins read
China Economics Weekly PBOC bond trading, LGFV pullback The PBOC has clarified that its plans to start trading government bonds are aimed at managing interest rate risk, not conducting QE. This reinforces our sense that large-scale monetary easing remains... 26th April 2024 · 6 mins read
China Economics Weekly Service sector picking up, overcapacity worsening The GDP breakdown suggests that the acceleration in growth last quarter was driven by the service sector, although the parts most dependent on consumer spending fared less well. And despite the recent... 19th April 2024 · 5 mins read
