China Economics Update China’s imbalances getting wider China’s dual imbalances – its trade surplus and its domestic reliance on investment over consumption – both widened in real terms in 2010. Government fiscal policy made things worse. 24th January 2011 · 1 min read
China Economics Update Coming growth slowdown to ease overheating fears China’s economy ended 2010 with momentum strong but is likely to slow in 2011 as real estate construction spending weakens and stimulus projects reach completion. With inflation also now steadying... 20th January 2011 · 1 min read
China Economics Update Property tax no panacea Even if we shared the common view that China’s property market is in a bubble, the tax that seems likely to be introduced soon on residential property would not be a solution. 19th January 2011 · 1 min read
China Economics Update Inflation Monitor (Dec.) Consumer price inflation probably fell in December, as food prices finally stopped rising. Non-food inflation remains low and neither capacity constraints nor monetary growth look likely to push it... 18th January 2011 · 1 min read
China Economics Update Reserve requirements set to become primary policy tool The People’s Bank is shifting towards using reserve requirements as a primary tool to limit credit growth. This is another reason to believe that interest rates will not rise as far as many expect in... 14th January 2011 · 1 min read
Global Markets Update "Currency war" still phoney but China tensions spreading The Brazilian government’s accusations that the US is engaged in a “currency war” are always good for a headline but continue to have little foundation. China’s manipulation of the renminbi remains a... 10th January 2011 · 1 min read
China Data Response NBS business conditions survey (Q4) Most companies in China finished 2010 confident about the future. The business environment still seems skewed in favour of large and state-owned firms, which enjoy more government support... 10th January 2011 · 1 min read
China Data Response Foreign Trade (Dec.) A combination of strong domestic demand and high commodity prices is helping to narrow China’s trade surplus but the imbalance with the US remains wide. 10th January 2011 · 1 min read
China Economics Update Renminbi set to outperform market expectations in 2011 President Hu Jintao’s visit to the US later in January will draw attention back to the renminbi. We believe that markets are underestimating the likely pace of appreciation over the year ahead. In... 7th January 2011 · 1 min read
Global Markets Update Can China save the euro? Despite some hopes to the contrary, China is unlikely to be able or willing to do much to solve the debt crisis in the euro-zone. China was presumably already buying a significant amount of peripheral... 6th January 2011 · 1 min read
China Economics Update The big risk for 2011 Ask any number of people in China to identify the biggest economic problem the country faces in 2011 and they, along with most analysts, will agree: inflation. They may all be wrong. 4th January 2011 · 1 min read
China Activity Monitor Growth accelerating at end of year The Capital Economics China Activity Proxy (CAP) suggests that the economy is growing faster than its sustainable rate at the end of 2010. With the government focused on maintaining rapid growth... 23rd December 2010 · 1 min read
China Chart Pack Markets rethink policy outlook Markets have scaled back their expectations for policy tightening in China as senior officials have made clear that they see no need for a major policy shift. The government’s stance is based in part... 21st December 2010 · 1 min read
China Economics Update The view from the ground - Q4 2010 China’s businesses have grown in confidence in the last quarter but banks and consumers are far less upbeat. Banks are increasingly worried about overheating and the need for policy tightening... 16th December 2010 · 1 min read
Global Markets Update Chinese demand won't support commodity prices for ever Based on a plausible scenario for the evolution of the sustainable growth rate of the economy and the commodity-intensity of activity, China’s commodity demand in 2025 could be half the level that a... 15th December 2010 · 1 min read
China Economics Focus The investment implications of China's tightening labour market The ongoing structural shift in China’s workforce will cause economic growth to slow and is likely to result in higher, though still manageable, inflation. Household incomes may finally start rising... 14th December 2010 · 1 min read
