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This page has been updated with additional analysis and charts since first publication. Credit demand much weaker than expected A widely-anticipated acceleration in credit growth didn’t materialise last month, suggesting that momentum may already be …
11th May 2023
This page has been updated with additional analysis and charts s ince first publication. Fluctuations in food and energy prices outweigh impact of reopening Producer price deflation deepened further last month to a 35-month low, and consumer price …
This page has been updated with additional analysis and charts since first publication. Exports set to struggle further China’s export volumes partially reversed March’s jump last month. Shipments of most consumer goods declined due to weak global demand …
9th May 2023
The April PMIs , the last of which was published today, suggest that while the reopening rebound in manufacturing stalled last month, the recovery in services was still going strong. That’s also the takeaway from the five-day Labour Day holiday which …
5th May 2023
The idea of a new BRICS currency to settle trade or hold in reserves instead of the dollar has been doing the rounds recently. This could be modelled on the IMF’s Special Drawing Rights. But getting India on board with China would be difficult. And if the …
4th May 2023
This page has been updated with additional analysis and charts since first publication. Growth still strong but slowing The latest survey data add to wider evidence that while China’s recovery remains robust, it is losing some momentum. In particular, the …
This page has been updated with additional analysis and charts since first publication. Return of tourists propelling city’s rebound Hong Kong’s GDP growth turned positive in Q1 after four consecutive quarters of decline. The economy rebounded more …
2nd May 2023
Property policy recalibration The Politburo held its monthly meeting today and, as is usual in April, its focus was the economy. The gist of its statement is one we’d agree with: economic growth in the immediate rebound from zero-COVID weakness “has been …
28th April 2023
The renminbi surpassed the US dollar to become the most-commonly-used currency in China’s cross-border transactions for the first time last month. Part of the increase – the part that has received plenty of attention – is due to wider adoption of renminbi …
27th April 2023
Our China Activity Proxy (CAP) shows that the economy bounced back rapidly in Q1, with growth since the start of the pandemic now broadly back in line with the official GDP data. And while the recovery will slow, the strong start to the year has …
26th April 2023
Reopening boost to services not tapped out yet The Q1 GDP figures published earlier this week exceeded even our relatively upbeat expectations, helping to settle some of the debate over the strength of China’s recovery. In response , we revised up our …
21st April 2023
This page has been updated with additional analysis and charts since first publication. Growth on course to hit 6% this year GDP rebounded more quickly than expected in Q1 thanks to a rapid return to normality following last year’s virus disruptions. …
18th April 2023
Note: Join our Tuesday 18 th April online briefing discussing what China’s Q1 “data dump” tells us about the strength of the country’s reopening recovery. Register Now . The rebound has exceeded most expectations Mixed data have contributed to differences …
14th April 2023
This page has been updated with additional analysis and charts since first publication. Note: Join our 18th April online briefing discussing what China’s Q1 “data dump” tells us about the strength of the country’s reopening recovery. Register now . …
13th April 2023
China’s Q1 “data dump” on 18 th April will provide the broadest take so far of the economy’s performance following the end of zero-COVID restrictions. Our China team held an online briefing shortly after the NBS release to discuss the quarterly GDP and …
12th April 2023
This page has been updated with additional analysis and charts since first publication. Credit growth still strengthening Bank loan growth jumped to a 17-month high in March. And broad credit growth rose to its highest since December. Both were stronger …
11th April 2023
Inflation set to remain below government’s ceiling this year Producer price deflation deepened further last month to a 33-month low, and consumer price inflation dropped below 1% for the first time in over a year. The key driver was lower food and fuel …
Inflation set to remain below government’s ceiling this year Producer price deflation deepened further last month to a 33-month low, and consumer price inflation dropped below 1% for the first time in over a year. The key drivers were a decline in food …
Infrastructure boosting construction activity The shape of China’s post-zero-COVID rebound has become clearer over the past week: primarily services-driven, as expected, but with stronger construction activity too, which appears to be mostly about …
6th April 2023
Consumer spending jumped during the first two months of the year as virus disruptions faded. The March retail sales data won’t be published for another couple of weeks. But the data we have so far suggest that the consumer recovery remained uneven last …
3rd April 2023
Note: Join our 6 th April online briefing all about the risks to EMs from banking turmoil. Register now . Reopening boost to industrial activity already waning The Caixin manufacturing index was more downbeat than its official counterpart, especially when …
Reopening boost to industrial activity already waning The Caixin manufacturing index was more downbeat than its official counterpart, especially when it came to export orders. Taken together, the surveys suggest that growth in factory activity dropped …
Note: Join our 6th April online briefing all about the risks to EMs from banking turmoil. Register now . China and Brazil are taking steps to allow bilateral trade to be settled in renminbi rather than US dollars. The Brazilian branch of ICBC will …
31st March 2023
Note: Join our 6 th April online briefing all about the risks to EMs from banking turmoil. Register now . Still going strong The official PMIs suggest that China’s rapid reopening recovery remained robust this month. The weak global backdrop weighed on …
Still going strong The official PMIs suggest that China’s rapid reopening recovery remained robust this month. The weak global backdrop weighed on manufacturing but services continued to benefit from a resurgence in consumer spending and construction was …
Our China Activity Proxy (CAP) shows a sizeable rebound in services activity early in 2023. While it hasn’t completely run its course, the recovery will slow over the next few months. The CAP is our attempt to track the pace of growth in China without …
29th March 2023
Overview – Much of the economic boost from China’s reopening has already happened. While there is still some upside to consumer and services activity, weakened balance sheets and limited policy support mean the recovery will probably fizzle out by …
Recent turmoil in the banking sector may have been a US and European story, but there are potentially important angles for Emerging Market investors. Our latest EM Drop-In explored the economic spill-over risks from the recent panic and the …
28th March 2023
Official efforts to curb China’s reliance on imported semiconductors have been going on for years. In 2015, the government set a goal of China being 70% self-sufficient by 2025. But progress toward that target has been much slower than hoped. Only a third …
24th March 2023
While the Credit Suisse rescue might draw a line under that particular institution’s problems, it is clear that confidence in the financial sector overall is still extremely fragile. So regardless of whether more financial institutions run into trouble, …
20th March 2023
China’s financial system has limited direct exposure to foreign banks. But recent global banking strains still pose some downside risk to the country’s economy. While there are signs that the situation is stabilising, it’s too early to rule out a wider …
17th March 2023
The People’s Bank (PBOC) has just announced a cut to the required reserve ratio (RRR). This will provide a bit of financial relief for China’s large and medium-sized banks. It may also help nudge down lending rates slightly. But given the wider signs of …
RRR cut not a major easing move The People’s Bank (PBOC) has just announced a cut to the required reserve ratio (RRR). This will provide a bit of financial relief for China’s large and medium-sized banks. It may also help nudge down lending rates …
A key channel through which emerging markets could be affected by the strains in the global banking sector is if lending by foreign banks falls sharply. On this front, EMs’ vulnerabilities have eased since the Global Financial Crisis. But there are still …
16th March 2023
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
