China Economics Update Watch the PMIs (or the CAP), not the Conference Board The negative reaction to what was in other respects an unimportant downward revision to the Conference Board’s leading indicator for April probably says more about the fragility of market confidence... 1st July 2010 · 1 min read
Asia Economics Update Taiwan targets closer ties with China A so-called Economic Co-operation Framework Agreement (ECFA) was approved yesterday between Taiwan and China. The deal should increase trade and for Taiwan there are two major implications. Firstly... 30th June 2010 · 1 min read
China Economics Focus Is China running out of cheap workers? China no longer has a surplus of underemployed workers in the countryside willing to move elsewhere for rock bottom wages, but it does still have a large and inefficient agricultural workforce. Their... 29th June 2010 · 1 min read
China Activity Monitor On course for a soft landing The Capital Economics China Activity Proxy (CAP) suggests that GDP growth slowed to a little over 10% y/y in the second quarter. A soft landing appears to be underway, although weakness in... 28th June 2010 · 1 min read
China Economics Update First thoughts a week into currency reform In the first week after the People’s Bank (PBC) decided to “proceed further” with exchange rate reform, the renminbi strengthened a total of 0.5% against the dollar. A little under half of those gains... 25th June 2010 · 1 min read
China Economics Update Hot inflows not likely to be a major threat With expectations for the pace of future renminbi appreciation low, speculative capital flows into China are unlikely to take off. Even if they do, the People’s Bank is capable of responding... 23rd June 2010 · 1 min read
China Economics Update Still in need of rebalancing The financial crisis has left many reputations looking rather tattered. China’s policymakers are among a small group who have emerged with their standing enhanced. Acting boldly and swiftly, they not... 22nd June 2010 · 1 min read
China Economics Update Lessons from 2005 for the renminbi The renminbi came close to breaching the People’s Bank 0.5% trading band against the dollar today, however such strong gains are unlikely to be a sign of what is to come. Indeed, when currency reform... 21st June 2010 · 1 min read
Global Markets Update Pace of renminbi appreciation set to disappoint The timing of China’s decision to allow greater flexibility in the renminbi has caught many others by surprise. But those now expecting a large appreciation against the dollar, and for this to boost... 21st June 2010 · 1 min read
China Economics Update Renminbi reform restarts Proof will come in the next day or two, but the decision of the People’s Bank to “proceed further” with exchange rate reform almost certainly means the renminbi’s hard dollar peg is at an end. 20th June 2010 · 1 min read
China Economics Update How many young workers are there? There may be 31 million fewer Chinese aged under 15 than previously thought. If so, the number of young workers will soon be falling rapidly, putting sustained upward pressure on wages. 18th June 2010 · 1 min read
China Economics Update The view from the ground – Q2 2010 China’s businesses and banks are still confident and do not think the economy is overheating, but consumers are unhappy about prices and wages and reluctant to spend. Mortgage demand is down and few... 17th June 2010 · 1 min read
China Economics Update Do wage increases reduce the need for currency appreciation? Rapid wage increases may play a big role in rebalancing China’s economy in the years ahead. In the short term though, they are no substitute for nominal currency appreciation. 15th June 2010 · 1 min read
China Economics Update Diminishing inflation threat should keep rates on hold Consumer price inflation has just edged above 3% but with price pressures still low and output growth already slowing, there is no pressing need to tighten policy. Indeed, we no longer expect interest... 11th June 2010 · 1 min read
China Data Response External Trade (May) Today’s confirmation that exports surged in China last month makes an early move on restarting currency reform more likely and should also dampen fears that the economy is heading into an abrupt... 10th June 2010 · 1 min read
China Chart Pack How big a deal are recent wage increases? (Jun 10) Big wage increases in China are stoking concern about inflation and corporate profitability. But they represent catch-up after two years in which wage growth was weak. Furthermore, double-digit... 9th June 2010 · 1 min read
