China Economy

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Chinese power is approaching its zenith

Via The Guardian yesterday: Australia does not “fully know” how an increasingly assertive China will use its power, Penny Wong has warned in a speech pledging to safeguard Australia’s sovereignty while accepting China as a global player. The defence and security communities must be “on the lookout for threats” as government and business expand the trade relationship

6

What to expect from China post-Congress

Via Goldman: Interview with David Shambaugh David Shambaugh is Gaston Sigur Professor of Asian Studies, Political Science and International Affairs, and the founding director of the China Policy Program at the George Washington University. In addition to his work in academia, he has served on the staff of the US National Security Council East Asia

2

Caixin China services PMI goes splat

The Caixin China services PMi is out and splat: The Caixin China Composite PMI™ data (which covers both manufacturing and services) signalled a weaker expansion in total Chinese business activity at the end of the third quarter. Notably, the Composite Output Index fell from 52.4 in August to a three-month low of 51.4 in September.

18

China’s commercial property bid evaporates

Wish me luck as I wave you goodbye, via AFR: Chinese investors have paused all investments overseas until this year’s Chinese National Party Congress in November is over, a roadshow by Colliers International, the Commonwealth Bank of Australia and PwC has revealed. The trio, which toured China in September, said investors were reluctant to deploy

4

S&P downgrades China

From S&P: On Sept. 21, 2017, S&P Global Ratings lowered the long-term sovereign credit ratings on China to ‘A+’ from ‘AA-‘ and the short-term rating to ‘A-1’ from ‘A-1+’. The outlook on the long-term rating is stable. We have also revised our transfer and convertibility risk assessment on China to ‘A+’ from ‘AA-‘. The downgrade

1

Chinese capital outflow crackdown tightens further

Via Reuters: China will strengthen its supervision of overseas investment risks and capital flows from insurance funds, the insurance regulator said on Monday, adding that it will urge companies to improve their risk monitoring systems. China has cracked down this year on “irrational” overseas investment which it suspected was one way of disguising capital flight

4

Beijing gives Straya’s chief real estate agent the bad news

Via the AFR: Treasurer Scott Morrison believes China’s ability to safely defuse its growing debt burden has improved after seeking personal assurances from one of Beijing’s most senior leaders that deleveraging won’t derail the best synchronised global economic upswing this decade. As an ever-rising list of senior policy makers ring alarm bells over debt levels

37

Bitcoin crashes as China closes in

The Bitcoin ponzi-scheme is imploding as I write, down by more than one third from its peak: As China shuts the exchanges, from Yicai: September 14, the first financial reporter from the local Internet Financial Governance Office of the regulators exclusive informed that the regulation has been on the domestic bit currency trading platform under

2

China slows

And here it is with Chinese August industrial production at 6% versus 6.6% consensus, fixed asset investment at 7.8% versus 8.2% expected and retail sales at 10.1% versus 10.4% expected: Turning to all that matters for Downunder, building, real estate sales continue to slow: Floor area under construction is now up 3.1% year to date.

1

Chinese inflation remains fantastically narrow

Chinese inflation was out yesterday and remains fantastically narrow. The CPI has firmed to 1.8% and the PPI is now rebounding at 6.3%: Food showed some bounces but consumer is still soft overall: And the PPI remains almost exclusively a ferrous complex issue with a bit of oil thrown in: Chinese stimulus and reform have

1

China trade mixed

China trade for August is out with exports slowing to 5.5% and imports up at 13.3%: The surplus fell to $41.99bn. Iron ore imports were firm at 88.66mt: However, some of the supply constraints coming out of Brazil, India and RIO are apparent in those numbers. This should ease over coming months.

10

China moves to squash runaway coal

More excellent bulks material today from Macquarie: China commodities trip: Update on government policy and coal  Following yesterday’s note on steel, we summarise the main takeaways regarding government policy and the coal market from our recent trip to China. Coal miners around the world have benefited from the Chinese government’s “276 working days policy”

1

China’s shadow banks go sub-prime

Via UBS: Shadow loan growth slows, but only at some banks We reviewed the financial information of 237 banks across China with a focus on banks’ trust beneficiary rights (TBRs) products and directional asset management plans (DAMPs). Overall, these assets in aggregate grew at a much slower YoY rate of 14.6% YoY to reach Rmb14.1trn

3

Fade the Caixin China PMI

The Caixin China PMI was out earlier today: China’s manufacturing sector remained in expansion territory in August, fuelled by the strongest increase in new business for just over three years. Firmer foreign demand was a key driver of new order growth, with export sales rising to the greatest extent in over seven years in August.

6

One belt, one road away from Western realty?

A couple of recent developments out of China shows a big shift is underway in its capital outflows. First, it was the great global realty clamp: The Chinese government has moved to halt “irrational” overseas investments by restricting purchases of real estate and entertainment assets, a decision which could dent demand for Australian assets. The move,

0

China PMIs hint at looming slowdown

China’s official PMIs are out and manufacturing powers on at 51.7 with new orders at 54.1 but exports shrank at 49.7: More interesting was the non-manufacturing index with fell to 53.4: Sub-sectors, service business activity index was 52.6% , down 0.5 percentage points from the previous month , the service industry continued to grow, but the growth rate slowed slightly. From the