China Economics Update The People’s Bank follows the Fed The People’s Bank has followed the Fed in raising the interest rate it charges when providing funds in China’s interbank market. But we believe that tighter policy in China continues to be primarily... 16th March 2017 · 1 min read
China Economics Update Premier Li signals lower emphasis on growth Premier Li Keqiang’s remarks to the press today following the conclusion of the National People’s Congress reinforce our view that policymakers will allow a renewed slowdown in economic growth this... 15th March 2017 · 1 min read
Industrial Metals Update China Industrial Metals Demand Monitor (Jan./Feb.) China’s activity and investment data for the first two months of the year point to robust metals demand. However, we are wary that this may represent the high point of 2017, given signs of a steadily... 14th March 2017 · 1 min read
China Economics Update Officials remain too cautious on structural reforms The latest reports and official comments from the National People’s Congress suggest that progress on reducing overcapacity and state sector reforms will remain sluggish this year. Unless policymakers... 14th March 2017 · 1 min read
China Data Response Activity & Spending (Jan. & Feb.) A jump in infrastructure spending and strong property sales have helped sustain China’s recovery into early 2017. Both these tailwinds look likely to run out of steam in the coming quarters, however... 14th March 2017 · 1 min read
China Economics Update PBOC relaxed about RMB, signals monetary tightening In his annual outing before the press at the National People’s Congress today, People’s Bank Governor Zhou Xiaochuan made a strong case that policy support for the renminbi can be sustained in the... 10th March 2017 · 1 min read
China Data Response Bank Lending & Broad Credit (Feb.) Bank lending in China held up better than expected last month but at the expense of other forms of credit, which have become less attractive following the recent rise in market interest rates. 9th March 2017 · 1 min read
China Data Response Consumer & Producer Prices (Feb.) Producer prices rose at their fastest pace since 2008 last month. But consumer price inflation remains well below the government’s 3% threshold. 9th March 2017 · 1 min read
Commodities Update China’s commodity imports holding up well China’s commodity import volumes remained strong in February, despite generally higher prices. However, we are reluctant to read too much into the data given the usual seasonal distortions. 8th March 2017 · 1 min read
China Data Response Trade (Feb.) The latest trade data suggest that, seasonal distortions aside, both exports and imports strengthened at the start of 2017. 8th March 2017 · 1 min read
China Data Response FX reserves (Feb.) The rise in China’s foreign exchange reserves last month suggests that the People’s Bank purchased foreign exchange in February and that capital outflows stalled. But the picture is murkier than usual... 7th March 2017 · 1 min read
China Economics Update New Year distortions drag inflation down Following a spike in January to a near-three-year high, consumer price inflation is likely to have fallen last month to a six-month low. This should be the nadir for inflation this year. Looking ahead... 6th March 2017 · 1 min read
China Economics Update Initial thoughts on the National People’s Congress Official statements at the National People’s Congress suggest policymakers feel less urgency to support growth than a year ago and are instead attempting to address credit risks by tightening monetary... 6th March 2017 · 1 min read
Commodities Update China’s PMIs are not all good news for commodities Both the official and unofficial February manufacturing PMIs for China surprised on the upside. However, much of the growth was driven by higher export orders, which we think are unlikely to be... 1st March 2017 · 1 min read
China Economics Focus Deeper capacity cuts needed to avert protracted slowdown We estimate that sectors responsible for two-thirds of China’s industrial output now suffer from overcapacity. Despite this, policymakers continue to drag their feet on reform due to fears that deep... 1st March 2017 · 1 min read
China Data Response PMIs (Feb.) February’s PMI readings suggest that the recent pick-up in global demand is keeping China’s recovery mostly intact for now. 1st March 2017 · 1 min read
