Global Markets Update Can China solve the euro-zone’s problems? Despite warm words of support from China’s leaders, there is no reason to believe that China has the ability to solve the euro-zone’s debt crisis. We estimate that China has already bought more than... 28th June 2011 · 1 min read
China Data Response HSBC/Markit Flash PMI (Jun.) The slowdown in Chinese manufacturing signalled by June’s flash PMI was unexpectedly sharp. But the data suggest that price pressures have also subsided. Policymakers should soon have space to loosen... 24th June 2011 · 1 min read
Commodities Update Chinese demand continues to cool The continued deceleration in China’s economy signalled by the flash PMI for June supports our view that commodity prices – industrial metals in particular – have further to fall. There is plenty of... 24th June 2011 · 1 min read
Global Markets Update Would Chinese reserve diversification hurt the dollar? Recent data provide tentative evidence that China’s accumulation of foreign exchange reserves has significantly outpaced her net purchases of US government securities in recent months. This... 23rd June 2011 · 1 min read
China Economics Update The view from the ground - Q2 2011 Businesses feel that demand is slowing while household concerns about inflation have continued to ease. But households are also downbeat about income growth and this seems to be undermining any... 17th June 2011 · 1 min read
China Economics Focus Unravelling the mystery of China’s trade data China’s trade surplus looks much smaller from within the country than it does from abroad. China’s customs data put the goods surplus last year at 3% of GDP. China’s trading partners reported a... 17th June 2011 · 1 min read
China Economics Update People's Bank still in tightening mode The People’s Bank of China has signalled that it remains in tightening mode by responding to the latest high inflation numbers with a reserve ratio hike. 15th June 2011 · 1 min read
China Economics Update Weaker lending adds to growth concerns Weakening credit growth and a slowing economy present a policy dilemma when inflation is still high. Our view remains that inflation will taper off in the second half of the year and that growth will... 14th June 2011 · 1 min read
Commodities Update China's Imports of Commodities (May) China’s imports of many key commodities edged up in May compared to April, but they remain below their average level in the first quarter. Imports of copper in particularly have fallen sharply this... 11th June 2011 · 1 min read
China Data Response Foreign Trade (May) Today’s trade data should go some way to ease fears that China’s economy is heading for a hard landing. Commodity imports remain much weaker than a few months ago but they have recovered slightly. 11th June 2011 · 1 min read
China Economics Update Inflation Monitor (May) The gradual slowdown in economic growth should help to ease price pressures over coming months. Recent figures show that food prices continue to fall, while underlying non-food inflation appears to be... 2nd June 2011 · 1 min read
China Data Response PMIs (May) China’s two PMIs fell in May but at a moderate pace. This is consistent with our view that the ongoing economic slowdown is gentle and unlikely to lead to a hard landing. Meanwhile, price pressures... 1st June 2011 · 1 min read
China Economics Update How much further will China tighten? Monetary conditions in China are no longer particularly loose and efforts to “normalise” policy are probably nearer to completion than generally believed. We expect three more reserve ratio increases... 31st May 2011 · 1 min read
China Activity Monitor Gradual slowdown, not hard landing The Capital Economics China Activity Proxy (CAP) shows growth continuing steadily to decline, but none of the component indicators give any reason to think that China is facing a hard landing. 26th May 2011 · 1 min read
Commodities Update China Flash PMI (May) The steady deceleration in China’s economy signalled by the flash PMI today supports our view that the current weakness of commodity prices – industrial metals in particular – is fully consistent with... 23rd May 2011 · 1 min read
