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Soaring inventories and falling imports are strong signs that the supply of many industrial metals in China far exceeds final demand. Needless to say, this reinforces our scepticism about the current strength of commodity prices. … What is happening to …
26th November 2009
This report is only available as a PDF. Click to download. … How will China’s policymakers approach the year ahead? …
24th November 2009
Construction slowed well before the rest of China’s economy in 2008 and it has since led the recovery. But our China Activity Proxy (CAP) suggests that recovery is now entrenched across all sectors of the economy, including services. … Service sector …
23rd November 2009
A resurgence in revenue will cap China’s fiscal deficit at just 3% of GDP in 2009. Looking ahead, the Budget for 2010 could signal how committed the government is to economic rebalancing. … What happened to China’s fiscal …
20th November 2009
There are many parallels between the current lending boom in China and that in the late-1980s which brought down Japan’s economy. But there are several reasons to think China will avoid the same fate. Many investors have noted similarities between China’s …
18th November 2009
This report is only available as a PDF. Click to download. … Hong Kong GDP (Q3) …
13th November 2009
This report is only available as a PDF. Click to download. … What is behind China’s new language on the renminbi? …
Despite further evidence of economic strength, China’s monthly data for October suggested that commodity stockpiling is waning. Lending growth declined more than expected, but credit policy is set to remain supportive of the recovery for months yet. … …
11th November 2009
The latest PMI data support our view that growth in China remains strong. However, the People’s Bank appears to disagree, with potentially major implications for the policy outlook. … People’s Bank signals sharp growth slowdown in …
2nd November 2009
Our China Activity Proxy (CAP) suggests that seasonally-adjusted, q/q growth in China’s economy has peaked, but growth is expected to remain strong for some time. … China’s growth …
27th October 2009
Nearly a year after exports collapsed, China’s economy is once again expanding at a frenetic pace. There are medium term risks in the form of industrial overcapacity, weaker banks and the threat that lending growth coupled with possible hot capital …
23rd October 2009
China’s loan-fuelled stimulus has returned the economy to rapid growth. The key challenge now is sustaining the rebound without inflating asset price bubbles. … Asset bubbles to be China’s biggest concern in year …
22nd October 2009
There was no let-up last month in the lending growth that is fuelling China’s stimulus. For now, the Chinese recovery is benefitting the rest of the world through stronger imports. But as commodity stockpiling eases, the trade surplus will rebound and …
14th October 2009
China’s foreign exchange purchases, and hot inflows into its economy, have steadied. But they are likely to rise in the months ahead, adding to the threat of asset price bubbles next year. … China’s hot money worries set to …
Business conditions in China improved across the board in Q3, but small and privately-owned firms are far less exuberant than their large and state-owned counterparts. … Business conditions continue to improve in …
13th October 2009
Asia’s PMI releases today add to the weight of evidence that Asia’s recovery has plenty of positive momentum. … PMIs add to impression of Asian …
1st October 2009
As China’s government celebrates 60 years of the People’s Republic, the experience of Japan and the Asian Tigers underlines the case for China to shift its economic model to sustain rapid growth. … What does China need to stay healthy at …
30th September 2009
Our China Activity Proxy (CAP) suggests that China’s economy expanded at an annualised pace of 15% over the summer. With many companies only just starting to spend the proceeds of loans, rapid growth is set to continue for months to come. … China still …
28th September 2009
China’s August data provided further evidence that the upswing in activity is still gathering pace. Savers are moving funds to easier-to-access demand accounts, and lending is still growing rapidly, both of which suggest that activity will remain strong …
24th September 2009
China’s monthly data for August support our view that the economy is still accelerating. The current structure of growth may be unsustainable in the long-run, but the government appears unwilling to instruct state-owned backs to ease up on lending until …
11th September 2009
This report is only available as a PDF. Click to download. … PMIs point to continued momentum in emerging Asia …
1st September 2009
Investors may have overestimated the speed of China’s recovery in the first half of 2009. But by focusing too narrowly on headline investment and loans data – such as those released for July today – they run the risk of underestimating its momentum in the …
11th August 2009
A little-noticed report published last week by the People’s Bank of China (PBC) gives arguably the best estimate yet of how much China’s economy slowed at the end of last year and how rapidly it has since accelerated. … A new angle on Chinese …
7th August 2009
Few will be surprised by the suggestion on the front page of today’s FT that China’s growth figures don’t add up. We created our China Activity Proxy (CAP) in an attempt to sidestep scepticism about the official data. It suggests that the recent pace of …
5th August 2009
The future of the dollar will be in the spotlight at high-level meetings between China and the US today and tomorrow. China is understandably concerned about the value of its stock of reserve assets. But when making sense of proposals for international …
27th July 2009
Continued rapid loan growth in China makes the emergence of asset bubbles increasingly likely. Around a fifth of loans extended so far this year have been invested in the stock markets, according to one government researcher, and loans may also have …
24th July 2009
China’s economic recovery is real but the turnaround has probably not been as sharp as the official data would have us believe. Looking ahead, the rapid growth of lending in the first half of the year sets the stage for strong growth in the second half, …
16th July 2009
The revival of confidence in China’s prospects appears to be drawing large amounts of speculative capital back into the economy, swelling the money supply and further raising inflation risks. Much of the inflow is being recycled into purchases of foreign …
15th July 2009
This report is only available as a PDF. Click to download. … China Trade (Jun.) …
10th July 2009
The ongoing ethnic violence in China’s Xinjiang province has far more in common with last year’s unrest in Tibet than the Tiananmen Square demonstrations two decades ago. Investors will shrug it off, but should also remember that the last 20 years of …
7th July 2009
Our in-house measure of growth in the Chinese economy points to a stronger recovery in May but we still doubt that the economy will meets the government’s target for an 8% expansion this year. … China’s growth still falling …
22nd June 2009
China’s reported fixed investment soared in May. But if the economy is doing so well, why did imports post an even steeper decline? … What should we make of the surge in Chinese …
11th June 2009
This report is only available as a PDF. Click to download. … China CPI, PPI (May) …
10th June 2009
The slight fall in China’s official PMI in May is actually fairly encouraging since the index usually falls by much more at this time of year. But Asia’s recovery is only gaining ground slowly, as underlined by May’s disappointing trade figures from …
1st June 2009
A mixed set of data over the past month has dampened hopes that rapid recovery is already underway in China. Reported investment growth is rising, yet sales of key investment inputs such as steel, which may be a better guide to actual investment, are …
24th May 2009
Chinese investment soared last month according to the official figures. Yet something doesn’t add up. Steel inventories stayed high, steel prices remained flat and sales of excavators have plummeted. Overall, April’s data support our view that China’s …
15th May 2009
This report is only available as a PDF. Click to download. … China Trade, Fixed Investment (Apr.) …
12th May 2009
April’s sharp fall in the growth of lending in China could expose the degree to which credit growth has supported equities and broader sentiment. Slower loan growth tempers concerns about asset bubbles and non-performing loans, but on these scores risks …
11th May 2009
China is concerned that widespread adoption of quantitative easing in major economies poses a threat to exchange rate stability. But we should be wary of jumping to conclusions on what this means for China’s reserve holdings. … What should we make of …
8th May 2009
Signs of recovery in China have bolstered confidence that the economy can achieve or beat the government’s target of 8% GDP growth in 2009. But we suspect that China is growing more slowly than the official figures suggest and that any rebound will be …
6th May 2009
There was much to cheer in China’s latest PMI and April’s export data from Korea. But they are consistent with stabilisation rather than either economy springing rapidly back to life. … Asian recovery still needs deeper …
1st May 2009
On the eve of the G20 meeting, the received wisdom is that China has responded more forcefully to the global crisis than most others. The government budget has indeed turned sharply into deficit, but this is only because revenue growth has collapsed. On …
24th April 2009
Growth may have bottomed out in the first quarter but with private sector and overseas demand still weak, China will not emerge from this downturn as rapidly as it went in. … China stabilises, but recovery set to …
16th April 2009
China’s official PMI rose above 50 in March. This is good news, but China’s economy is set for a tepid recovery at best. … Has China’s recovery …
2nd April 2009
A surge in lending might increase the chances that Chinese interest rates remain on hold this year, but if the economy remains weak, as we expect, the People’s Bank will still be forced to cut again. … Have Chinese interest rates bottomed …
12th March 2009
This report is only available as a PDF. Click to download. … China Trade (Feb.) …
11th March 2009
This report is only available as a PDF. Click to download. … China CPI, PPI (Feb.) …
10th March 2009
The renewed optimism about China’s prospects that had supported global equities earlier in the week could start to unravel on the back of today’s disappointing budget. … No new stimulus from …
5th March 2009
China’s annual National People’s Congress (NPC) opens tomorrow with an address from Premier Wen Jiabao and the presentation of the government budget. Here are seven key issues to watch. … Seven key issues at China’s National People’s …
4th March 2009
The scale of China’s outward investment makes it a potentially powerful force in many markets, but also leaves China with few alternatives to foreign government debt for the bulk of its purchases. … Is China shifting its investment …
26th February 2009
