China Economics Weekly Stimulus only firing on one cylinder Large-scale liquidity injections have had little impact on economic activity recently and the upcoming RRR cut is likely to be no different. Quantitative monetary policy tools are ineffectual in an... 26th January 2024 · 7 mins read
China Economics Weekly Tech sector doing better, births may rise in 2024 After years of being buffeted by trade tensions and a domestic regulatory crackdown, China’s tech sector has finally regained a bit of momentum recently. And although China’s population will shrink... 19th January 2024 · 5 mins read
China Economics Weekly Stronger data ahead as PBOC continues to ease The Q4 GDP data due on Wednesday are likely to confirm what we’ve been saying for some time – that the economy was regaining momentum at the end of 2023 thanks to policy support. That recovery is... 12th January 2024 · 7 mins read
China Economics Weekly Investors price in rate cuts, PBOC taps lending scheme In contrast to elsewhere, bond yields in China continued to drop this week as investors increasingly come around to our view that further cuts to policy rates and reserve requirements are imminent... 5th January 2024 · 7 mins read
China Economics Weekly Policy still easing but not enough to hit growth target Although the Loan Prime Rates were left unchanged on Wednesday, today’s coordinated reductions in commercial bank deposit rates suggest the PBOC is still on an easing path. Meanwhile, a lower headline... 22nd December 2023 · 6 mins read
China Economics Weekly Officials in denial about extent of structural slowdown Policymakers seem to believe that with a bit of stimulus and a turnaround in sentiment, the economy can get back on a stronger path. While there is some truth to this, we think that officials are... 15th December 2023 · 6 mins read
China Economics Weekly Debt woes widely known but far from priced in Moody’s downgrade to China’s rating outlook received a muted response in markets. That’s partly because the country’s economic challenges are already widely known. But the bigger picture is that... 8th December 2023 · 7 mins read
China Economics Weekly Fiscal boost, renminbi turnaround Government bond issuance has picked up recently but a sizeable chunk of the proceeds have yet to be spent. Local officials will be under pressure to deploy these funds as soon as possible, which could... 1st December 2023 · 5 mins read
China Economics Weekly Property rescue efforts intensify Policymakers want banks to lend more to developers, especially private ones. They will be reluctant to do so but are likely to comply to some degree – previous rounds of credit support for developers... 24th November 2023 · 6 mins read
China Economics Weekly State taking a bigger role in homebuilding Local governments are stepping up the construction of public housing, providing a partial offset to the downturn in developer homebuilding. One consequence is that the privatization of China’s housing... 17th November 2023 · 5 mins read
China Economics Weekly Chinese exporters gain market share by slashing prices Export values have been contracting year-on-year for six months. But that’s almost entirely due to price effects. Export volumes have recently risen to record levels, with broad-based price cuts... 10th November 2023 · 7 mins read
China Economics Weekly The renminbi’s rise in China’s global transactions For the first time, over half of China’s global transactions are being settled in renminbi. Most of this renminbi isn’t travelling far – the bulk of settlement is being driven by financial flows with... 3rd November 2023 · 7 mins read
China Economics Weekly Larger deficit comes with a catch Tighter oversight of off-budget fiscal activity has resulted in the first net fall in bond issuance by local government financing vehicles and policy banks in over two decades. That’s one reason why... 27th October 2023 · 7 mins read
China Economics Weekly GDP breakdown suggests service sector still struggling The official GDP figures show a marked acceleration in quarter-on-quarter growth in Q3. But a closer look at the data suggests that this may be a statistical mirage. We think that growth slowed last... 20th October 2023 · 4 mins read
China Economics Weekly China’s AI chip challenge The US government appears to be about to tighten the controls that it brought in a year ago on China's access to cutting-edge chips. One consequence will be that Chinese firms will find it harder to... 13th October 2023 · 7 mins read
China Economics Weekly PBOC has CNH on a leash, domestic tourism picks up PBOC intervention in Hong Kong kept the offshore renminbi largely stable against the dollar this week even as US yields jumped. This lowers the chance of a large adjustment to the daily fixing rate... 6th October 2023 · 7 mins read