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A stronger start to 2023 Activity data for the first two months were broadly as expected, showing a jump in consumer spending coupled with modest gains in investment and industrial output. High-frequency data suggest that this recovery has continued in …
15th March 2023
At the time of writing, financial markets appear to be stabilising after the turmoil caused by the collapse of SVB. And it doesn’t look like EMs have suffered large capital outflows or strains in their banking sectors. If this relatively benign scenario …
14th March 2023
The National People’s Congress (NPC) is still in session. But the key outcomes are already known. Here are four takeaways. First, the economic targets and policy settings for this year were cautious and restrained . We discussed them in detail here . The …
10th March 2023
Credit growth benefiting from reopening boost Bank loan growth jumped to a 14-month high in February. And broad credit growth accelerated for the first time since September. This rebound should continue in the near-term thanks to a reopening revival in …
Drop in inflation suggests reopening effects remain small Factory gate prices stopped falling last month, as China’s reopening helped to put a floor under global commodity prices. Meanwhile, consumer price inflation dropped back sharply due to a fall in …
9th March 2023
No reopening boost to imports yet China’s import volumes were little changed at the beginning of the year, disappointing hopes for a rebound. But we still think that reopening will eventually drive a pick-up in imports. And while exports fared better than …
7th March 2023
Click here to view an online briefing with our team about China's economic plans. It was recorded on 6th March, 2023. The economic plans that have been detailed at the National People’s Congress are more cautious and restrained than had seemed likely …
6th March 2023
The government will lay out its economic agenda for this year at the annual session of the National People’s Congress (NPC), which kicks off on Sunday. Most of the key documents, including the government Work Report and annual Budget are published on the …
3rd March 2023
A very rapid recovery The latest survey data are exceptionally strong across the board, consistent with our expectation for a rapid near-term rebound. We expect this recovery to lose momentum later in the year but the risks to our forecasts look …
1st March 2023
A very rapid rebound The latest survey data is exceptionally strong, consistent with our expectation for a rapid near-term rebound in economic activity. The Caixin manufacturing PMI rose from 49.2 in January to 51.6 in February (the Bloomberg consensus …
Local governments have stepped up their borrowing since the start of the year. They issued RMB860bn in special bonds over the course of January and February, up from an average of RMB105bn per month during the second half of 2022. Special bonds are …
28th February 2023
The People’s Bank last cut policy rates in August. Worries about currency weakness then stayed its hand – plus a view that supply-side disruption linked to COVID would render further easing ineffective. Those concerns have since gone away. We had thought …
24th February 2023
The war in Ukraine. Ageing populations. Rising temperatures. Investors are having to grapple with a formidable range of uncertainties around the long-term outlook for the global economy and markets. Their challenge is compounded by the fracturing of the …
22nd February 2023
With Hong Kong’s economy on the mend, the budget unveiled today curtailed some of last year’s emergency spending. But it still signals a supportive fiscal stance, particularly in areas hardest hit by COVID. Together with the reopening of Hong Kong’s …
Bank deposits held by Chinese households have soared over the past year. But that mostly reflects a shift out of riskier assets rather than a surge in savings. In fact, our calculations show that household wealth declined in 2022 for the first time in at …
20th February 2023
Buyer sentiment seems to be improving New home sales have taken a beating since their peak in early 2021. But there are some green shoots in the recent data which show sales in large cities rising at the start of this year. (See Chart 1.) We think this …
17th February 2023
The roots of the crisis in China’s property sector lie in the worsening long-term outlook for demand. This has not improved. But sales started the year so beaten down that a short-run cyclical recovery is likely. Sales of new residential property fell …
15th February 2023
Worse still to come for exporters China’s exports boomed throughout much of the pandemic with global consumers, stuck at home and flush with cash from fiscal transfers, spending more on Chinese-made goods. But the unwinding of those pandemic …
10th February 2023
Some of the moves in China’s financial markets that followed its rapid reopening – including a rise in equity prices, higher bond yields and stronger renminbi – have unwound in the past couple of weeks, but we think they will resume before too long. …
Credit growth is bottoming out After slowing last year, bank loan growth jumped to a 10-month high in January. After accounting for seasonal effects, broad credit growth looks to have ticked up too. We expect the recovery to continue in the near-term as …
Credit growth is bottoming out After slowing last year, bank loan growth jumped to a 10-month high in January. Broad credit growth looks to have ticked up too after accounting for seasonal effects. We expect the recovery to continue in the near-term as …
Inflation ticking up on reopening effects Factory-gate prices continued to decline last month thanks to falling commodity prices and waning supply chain disruption. But at the same time, a jump in demand for travel and other services following the removal …
2023 fiscal boost still on its way December’s Central Economic Work Conference called for stepped-up fiscal support this year. On-budget borrowing, a timely proxy for fiscal policy, has since picked up slightly. But officials still have work to do. Net …
3rd February 2023
Return of tourists will help drive the city’s recovery Hong Kong’s GDP was unchanged in q/q terms last quarter. This was largely due to a further decline in exports but the worst may be over on that front given that global growth is probably close to a …
1st February 2023
Industrial activity steady as services rebound The Caixin manufacturing PMI published today edged up slightly in January as disruption from the reopening wave eased but it remained at a subdued level. Taken together with the official survey published …
There is a touch of the Dr Jekyll and Mr Hyde about China’s climate credentials, with its well-documented record of burgeoning emissions and reliance on coal standing in stark contrast to its increasing influence over the supply of green technology. The …
31st January 2023
Reopening kick starts a rapid recovery The official PMIs add to evidence of a rapid rebound in economic activity this month as disruption from the reopening wave faded. More shoppers returned to the street boosting services activity while easing labour …
The Lunar New Year holiday wasn’t quite back to normal this year as fears of spreading COVID to elderly relatives prevented many households from returning to their hometowns – long-distance journeys, while the highest since the start of the pandemic, …
30th January 2023
Policy shifts pave the way for a cyclical recovery New home sales ended 2022 46% below their spring 2021 peak. But this could mark the bottom for China’s housing market. Daily data suggest that sales have rebounded strongly in recent weeks – they are …
27th January 2023
We held a Drop-In today to discuss the big economic and financial market development across Emerging Asia. (You can see an on-demand recording here .) This Update answers several of the questions that we received, some of which we couldn’t answer during …
26th January 2023
China’s statutory retirement ages for men and women are low. But raising them would not make a big difference to the size of the workforce since most workers today keep working once they have passed retirement age. Only a quarter of men drop out of the …
25th January 2023
The Year of the Rabbit that begins on Sunday will see a revival in outbound tourism from China that we expect to be stronger than recoveries seen elsewhere. China is reopening into a world that has already dismantled most virus controls. Its state-owned …
20th January 2023
A partial recovery in Lunar New Year travel The world’s largest annual migration of people is well underway, with millions of Chinese returning to their hometowns to spend the upcoming Lunar New Year holiday with their families. This migration, which …
The theme of global economic fracturing, which was the focus of our Spotlight Series of research last September, is at the centre of economic discussion in 2023, including at Davos. We held an online drop-in session yesterday to update clients on our …
19th January 2023
Our China Activity Proxy (CAP) suggests that output was still depressed at the end of 2022, though it held up surprisingly well in the face of a huge reopening wave of infections. With the virus situation now improving, activity appears on course for a …
A smaller-than-expected hit from reopening China’s statistics bureau claims that GDP was unchanged q/q in Q4. That is implausible, even accounting for December data showing surprising economic resilience in the face of the reopening wave of infections. …
17th January 2023
Tuesday’s retail sales data are likely to show that spending plunged as COVID crashed through China last month. But December was an age ago. It can’t tell us much about what will happen now. We’d caution against some of the bullish takes doing the rounds. …
13th January 2023
Reopening to boost imports but exports will still struggle China’s exports contracted year-on-year in December by the most since the Wuhan lockdown in early 2020. Imports held up slightly better but are still depressed. Inbound shipments should start to …
We had expected disruption from China’s reopening wave of COVID infections to weigh heavily on activity well into Q1. But there is mounting evidence that much of China’s population has already been infected and that disruption is already fading rapidly. …
12th January 2023
Some very modest reopening effects Consumer price inflation ticked up in December, while producer price deflation eased. There are some early signs that the transition toward living with COVID is starting to put upward pressure on prices. But the uptick …
