For months now I have argued that China is tightening stimulus and we can expect it to slow through the second half of 2021. That has been clear in PBOC tightening at the margin plus some fiscal. Now, following last week’s National People’s Congress it is offical. Goldman has the details: On GDP growth target, it
Via China’s NBS comes the February PMIs. These were weak but even more so when one considers that the great Chinese New Year people migration was effectively cancelled this year meaning more people remained at work. It may simply be that that distortion has not been picked up by the survey’s seasonal adjustments: In February ,
While global stock markets are still on the march, Chinese bourses have been bashed over the past week in Hong Kong and Shanghai. Given China is the leading indicator for this business cycle, first into and out of the virus, with accompanying stimulus, is this the harbinger for global markets? First up, the correction so
Mizuho: Despite January’s negative inflation rate, we still look for mildly positive inflation for 2021. In this note, we examine a few factors that are likely to impact China’s inflation throughout the year, including CPI’s base effect and revised weights, the pork cycle, consumer confidence, credit growth and the external environment. In detail, the base
Late yesterday China released its 70-city house price index and it showed some refirming of prices for January with month-on-month prices at 0.3% and year-on-year at 3.9%: The number of cities registering gains swung back to positive with 40 versus 30 stable of falling: The price gains are still very much in lower-tier cities: There
Mizuho: ◼ Usually, it takes two to three weeks for China’s industrial production to recover to full capacity post a lunar new year (LNY) holiday as rural migrant workers return to the city. However, such a recovery is expected to arrive earlier this year as many workers spent the holiday in the city due to
Readers will know that the MB view is that the stronger this year’s global recovery, the quicker that China will tighten its most recent credit binge as its export sector booms. That clamping is already underway. The reason why is well known and understood. In its formative stages, super-charged catch-up growth in a developing economy
How will China hit 2060 net-zero emissions given it by far the world’s largest polluter? Goldman has a crack at it: China’s pledge to achieve net zero carbon by 2060 represents two-thirds of the c.48% of global emissions from countries that have pledged net zero… …as the country accounts for c.30% of global CO2 emissions
China’s new yuan loans for January were out last night and the slowdown is intensifying. Total social financing looked like a big number at 5.17tr yuan with banks accounting for 3.58tr of that: But year on year credit flow growth plunged to just 2% and the 3MMA is similar: The rolling annual has stalled: With
Via Sinocism: ‘Their goal is to destroy everyone’: Uighur camp detainees allege systematic rape – BBC News First-hand accounts from inside the internment camps are rare, but several former detainees and a guard have told the BBC they experienced or saw evidence of an organised system of mass rape, sexual abuse and torture. Tursunay Ziawudun,
Via China’s NBS come fading PMIs, no doubt in part owing to virus disruptions. The falling new orders in construction are a worry for iron ore. In January , China’s Manufacturing Purchasing Managers Index ( PMI ) was 51.3% , down 0.6 percentage points from the previous month , and was above the threshold for 11 consecutive months, indicating that the manufacturing industry continues to expand, but the
Via Mizuho: On a sequential basis, we see renewed pressure on China’s economic activity in 1Q21. Apart from less favourable seasonality during the lunar new year holiday (LNY,11–17Feb), recent mini COVID outbreaks in Jilin (273 local cases YTD), Heilongjiang (429) and Hebei (919), as well as the latest requirement of 14-day quarantine at home for
It’s not new. We’ve seen it before. Every attempt fails. But a new plan is afoot to end China’s real estate driven growth addiction that keeps Australian iron ore above $30. Via Societe Gereral: Policy directions in 2021: normalisation, de-risking and reforms The Central Economic Work Conference reiterated policymakers ’intention to continuing with policy normalisation
Via Goldman: China – stability may be necessary and sufficient. A strong print in Q4 growth rounded off the solid recovery we have seen in Chinese GDP through 2020, and it is important to reiterate that a robust growth backdrop in China is a key ingredient ofour pro-cyclical stance across global markets. It is often
Via Morgan Stanley: Increasing noise on possible policy reversal: Shanghai Metals Market (SMM) reported yesterday that the Chinese government was in the preliminary stages of lifting its informal ban on Australian coal imports, but that such a move would still need to be approved by senior leaders. There has been no official comment on the article.
Via Bloomie: While much of the world was under stay-at-home orders on the first day of 2021, Chinese moviegoers packed into cinemas to watch the romantic comedy Warm Hug and the drama A Little Red Flower, generating the country’s biggest New Year’s box office on record. The 545 million-yuan ($84 million) splashed out on movie
China’s house prices are out. They lifted just 0.1% for a second month and 3.8% on the year: The majority of cities saw stable or falling prices: Top tier is dead, others are slowing: Prices are probably not yet slow enough to trigger a building bust they are trending that way and an easing in
Chinese December and Q4 growth was out yesterday and ended the year with a bang. GDP clocked up 6.5%: And December internals were firm as well with fixed asset investment at 2.9% year to date, industrial production at 2.3% and retail still improving at -3.9% but up 4.6% Yoy: Turning to real estate, sales area
I missed this last week but it is important. New yuan loans in December were reported by the PBOC and came in quite soft with headline aggregate financing at 1.76tr yuan as banks made up 1.26tr of that: Non-bank lending is retracing sharply: Year on year lending fell 18% and the 3MMA has rolled: As
Never waste a good crisis they say. China isn’t. Via Credit Suisse: The headline trade surplus widened further from USD75.4bn in November toUSD78.17bn in December, noticeably above the consensus expectation ofUSD72.35bn and predominantly driven by higher-than-expected export growth. In quarterly space, real exports in Q420 were 10.9% higher than that of Q3 20 while real
Some high-frequency indicators for ya. Steel output is still crazy as new property area sales soldier on: But COVID is back: Hitting high touch segments: And global lockdowns have landed on exports: Still fine but the virus third wave is clearly posing headwinds for now.
At the AFR comes thankfully the last column by registered agent of foreign influence and Chinese coal director Geoff Raby: The holiday period is a good time to catch up on both sleep and reading. One of the previous year’s most important books, which inexplicably has received scant attention, is Tom Orlik’s China: The Bubble
The PBOC has been strengthening Yuan against USD throughout 2020 and that trend is not stopping in the new year, with the latest onshore fix set at 6.4605, a big drop down from yesterday’s 6.4823 as offshore trading (USDCNH) gets below the 6.45 level. The weekly chart shows the strength of this trend with the
The latest Chinese inflation data for December has been released with the consumer price index (CPI) rising more than expected, 0.2% instead of a flat result, mainly due to a reversal in food prices. This arrests the decline seen in November, but the impact of COVID-19 is still being felt, with producer inflation (PPI) still
I have noted previously how China’s economy is facing stiff headwinds from an ageing population (see here, here, here, and here). Essentially, China’s ageing problem stems from its ‘one child policy’, which was brought into effect in the early-1970s and is credited with preventing around 400 million births from 1979 to 2010. This policy initially
Karma continues to bite China in the backside, with more reports of blackouts across the country after its decision to ban Aussie coal: Several major Chinese cities have reportedly gone dark as authorities limit power usage, citing a shortage of coal. Analysts said prices of the commodity in the country have shot up due to
Karma has bit China in the backside, with its decision to banish Australia and blockade crucial exports causing blackouts in cities across the nation: The towering skyscrapers in Changsha have stopped glowing. The provincial capital of Hunan and home to more than 7 million people is without street lights, too. Lifts have been switched off,
That’s the question that has plagued me for ten years. Via James White of Lessep Investment Management, at the AFR: If China’s annual residential property sold was built in Eureka Towers (14,000 of them) and one constructed every 65 metres, it would line the Hume Highway from Sydney to Melbourne. In terms of population, 14,000
Via Goldman: Growth to feel the weight of policy normalization in 2021While the near-term growth picture looks encouraging, tightening is clearly the direction of travel when it comes to policy. To be clear, we expect stable policy rates and no hikes in OMO or MLF rates next year. This is because interest rates have mostly
Yesterday afternoon’s Chinese data for November goes a long way to explaining the behaviour of commodity prices. China is firing on all cylinders now with stimulus that had juiced the supply side now flowing over demand as well. The growth internals were as expected with YTD FAI in at 2.6%, Industrial production at 2.3% and
