Filtered by Subscriptions: China Economics Use setting China Economics
Little appetite for borrowing Credit growth has now reversed all of its modest acceleration over the past year, a clear sign that monetary easing has failed to gain traction due to virus disruption and waning confidence among households and firms. …
12th December 2022
Fiscal policy coming back to life Fiscal policy has not played much of a role supporting the economy this year. A large part of the blame lies in an inflexible budget process that makes it hard for the finance ministry to depart from limits set in …
9th December 2022
Overview – The authorities are making policy changes to address two of the key drags on China’s economy, the zero-COVID policy and the property sector downturn. But it will be a while before these efforts bear fruit. And in the meantime, the economy will …
Inflation likely to remain subdued even amid reopening Consumer price inflation dropped to its lowest in eight months in November and producer price inflation stayed at a 23-month low. The shift away from zero-COVID could put some upward pressure on …
Exports to shrink further as global recession looms Chinese exports contracted year-on-year in November by the most since the start of the pandemic and imports dropped at the fastest pace in 30 months. We expect outbound shipments to fall further over the …
7th December 2022
Exports set to shrink further as global recession looms Chinese exports contracted year-on-year in November by the most since the start of the pandemic and imports dropped at the fastest pace in 30 months. We expect outbound shipments to fall further over …
Economy set for Q4 contraction due to virus hit The November PMI readings published this week underscored the economic cost of efforts to contain the current outbreak. The official services index fell to its lowest level since the height of the Omicron …
2nd December 2022
More signs of weakness in industry The Caixin manufacturing PMI edged up in November but remained weak. Taken together with the official survey published yesterday, they suggest that downward pressure on industrial activity intensified last month. The …
1st December 2022
More signs of weakness in industry The Caixin manufacturing PMI edged up in November but remained weak. Taken together with the official survey published yesterday, the surveys suggest that downward pressure on industrial activity intensified last month. …
COVID disruptions deliver a further hit to activity The official PMIs add further evidence of another large blow to services activity as virus disruptions intensified this month. The hit to industry looks to have been more modest. But downside risks …
30th November 2022
Concrete signs of an effort to exit from zero-COVID are emerging, with a notice today of a push to vaccinate the elderly. The low level of vaccine coverage of the most vulnerable is, along with a lack of healthcare capacity, the major constraint on …
29th November 2022
The authorities will not allow a protest movement to occupy China’s streets for any length of time. If the protests continue, a crackdown is very likely. They have no good options in the near-term to address protestors’ demands: relaxation of strict COVID …
28th November 2022
Warmer words in US-China relations There has been a palpable easing of strains between China and the West since the cordial meeting last week between Xi and Biden . Xi agreed to restart the high-level talks that China halted when Nancy Pelosi visited …
25th November 2022
As China's new infection numbers hit a record, its zero-COVID policy is coming under severe strain. Despite hopes that the government would be moving away from the controversial policy, more and more cities across China are being locked down as …
The reduction in the required reserve ratio (RRR) that the PBOC just announced will help banks follow through on a directive to defer loan repayments from firms struggling with widening lockdown restrictions. Market interest rates may also edge down as a …
Our China Activity Proxy (CAP) suggests that virus disruption led to a further decline in output in October. The combination of tightening COVID restrictions, voluntary isolation in the face of rising cases, problems in the property sector and falling …
23rd November 2022
The next few weeks could be the worst in China since the early weeks of the pandemic both for the economy and the healthcare system . Efforts to contain the current outbreak will, at the very least, require additional localised lockdowns in many cities, …
22nd November 2022
Virus disruption has continued to intensify over the past week even after measures to optimise the COVID response were released. Implementation has been haphazard so far. Local officials have struggled to strike a balance between minimising disruption and …
18th November 2022
Recent policy announcements have raised hopes that the property downturn may be coming to an end. But while the measures made public so far reduce some of the downside risks by giving developers and their creditors a little breathing room, they fall short …
17th November 2022
Economy to continue struggling The October data point to a further loss of momentum, with retail sales dropping sharply amid worsening virus outbreaks. November is shaping up to be even worse. With exports cooling, the property sector still in the …
15th November 2022
Virus disruption has intensified recently, with COVID infections hitting a six-month high. The Politburo Standing Committee (PBSC, China’s highest leadership body), met yesterday to discuss the situation. According to the meeting readout, they agreed to …
11th November 2022
A shift away from zero-COVID would be positive for China’s economy over the medium term. But the immediate disruption of reopening would probably exceed the cost of keeping the policy in place, especially if vaccine coverage among the elderly hadn’t …
10th November 2022
Households stop borrowing outright as leadership recommits to zero-COVID Much weaker than expected credit growth – and an extremely unusual outright fall in lending to households – again underlines the difficulties policymakers are facing stimulating …
Factory-gate deflation setting in Consumer price inflation eased last month from September’s 29-month high and remained below the government’s preferred ceiling of 3%. It is set to stay low by global standards over the coming quarters. Meanwhile, producer …
9th November 2022
PPI deflation setting in Consumer price inflation eased last month from September’s 29-month high and remained below the government’s preferred ceiling of 3%. It is set to stay low by global standards over the coming quarters. Meanwhile, producer price …
Exports set to fall further as outlook darkens China’s export volumes dropped back sharply in October, due to a deterioration in global economic conditions and a reversal in pandemic-related demand. We expect exports to weaken further over the coming …
7th November 2022
Chinese equities turned a corner earlier in the week on the back of rumours of plans to shift away from the zero-COVID policy by next March. Remarks reportedly made at a conference by Zeng Guang, the former chief scientist at China’s CDC, added fuel to …
4th November 2022
On some measures China’s current COVID situation is about as bad as it has ever been. While far fewer infections are being found daily than at the peak of the Omicron wave, new cases are geographically spread just as wide, with the result that the …
1st November 2022
Better than expected but still consistent with a slowdown The Caixin manufacturing PMI rose in October but remained weak. Taken together with the official survey published yesterday, it points to a slowdown in industrial activity last month. We think the …
Weak exports will continue to hold back the city’s recovery Hong Kong’s economy contracted last quarter due to a sharp decline in exports. While the ongoing easing of virus-related restrictions should continue to support a recovery in retail spending, …
31st October 2022
COVID disruptions and global downturn hit activity The official PMIs point to a further loss of momentum this month as virus disruptions worsened and export orders remained under pressure. With the zero-COVID policy here to stay, we think the economy will …
COVID disruptions and global downturn hit activity The official PMIs point to a further loss of momentum in this month as virus disruptions worsened and export orders remained under pressure. With the zero-COVID policy here to stay, we think the economy …
The Q3 GDP figures published earlier this week came in slightly stronger than expected. We don’t think the data should be taken completely at face value – our in-house alternative, the China Activity Proxy, paints a more downbeat picture . But the …
28th October 2022
Our China Activity Proxy (CAP) suggests that output declined in September by the most since the Omicron wave. The main culprit – renewed disruption from virus curbs – appears to have worsened further this month. We think the economy will contract this …
25th October 2022
Xi Jinping has removed the last vestiges of rival factions from the upper echelons of the Party, stacking the Politburo full of loyalists in a clean sweep not seen since the Mao era. With political ties taking increasing precedence over technocratic …
24th October 2022
Omicron hit reversed but momentum still weak Growth ticked up in Q3 as the hit from the Omicron wave reversed. But this leaves output only slightly higher than where it started the year. And momentum is now weakening again. GDP growth picked up from 0.4% …
Omicron hit reversed but momentum still weak Growth ticked up in Q3 as China's economy recovered from the Omicron wave. But this leaves output only slightly higher than where it started the year. And momentum is already weakening again. GDP growth picked …
The Party Congress has slowed the leadership’s response to the semiconductor export controls introduced by the Biden administration two weeks ago. But the Ministry of Industry and Information Technology has, according to Bloomberg, been conducting …
21st October 2022
Overview - We expect greater stimulus next year. But with the zero-COVID policy here to stay, an abrupt turnaround in property construction unlikely and exports set to fall, policymakers face an uphill battle. Growth will remain depressed. Consumer …
Economists from across our Asia teams were online for this 20-minute briefing on the region’s big investment stories. During this session, the team answered client questions about what’s happening in Asian economics and markets as they addressed current …
20th October 2022
General Secretary Xi’s Report to the Party Congress signalled a further shift away from market-based reforms in favour of a state-led campaign to increase self-sufficiency and economic security. Investors should also be wary of the growing focus on …
17th October 2022
The Party Congress begins on Sunday. We covered much of the agenda and economic implications in a Focus piece and at a Drop-In event (recording here ) this week. One element of both was a discussion of who might replace Li Keqiang as premier. But Li …
14th October 2022
