China Economy

8

China’s debt shakeout intensifies

Via Bloomie: A string of defaults by Chinese state-owned companies has sent shockwaves across the world’s second-largest credit market. But some bonds have fared much worse than others as investors clamber to avoid the next potential blowup. Among the most notable losers: notes issued by Pingdingshan Tianan Coal Mining Co., Jizhong Energy Group Co., Tianjin TEDA Investment Holding

6

China’s “dual circulation” drivel

Via News: It doesn’t sound all that riveting: the fifth plenum of the 19th Communist Party of China’s central committee. Nor does the 14th five-year-plan that sprung from the rubberstamping event, held in Beijing at the end of last month. But buried beneath the bureaucratic bumpf is a radical new plan that China hopes will

24

Is China entering a financial crisis?

Bartho wrote a nice piece yesterday: There has been a spate of Chinese companies defaulting on their bond repayments in the past few weeks, sending anxious ripples through the market that have even touched China’s sovereign bond yields and caused its central bank to pump liquidity into its bond market to try to calm it.

7

China’s stimulus pulse fades away

Chinese data for October was out late yesterday and it shows an economy with a fading stimulus pulse. Industrial production was up 1.8% YTD and a more encouraging 6.9% YOY. Fixed asset investment was up 1.8% YTD and retail sales are still the laggard down 5.9% YTD but up 4.3% YOY: The all-important real estate

8

How China uses subnational diplomacy to exert influence over Australia

Associate Professor Salvatore Babones has released a new report at the Centre for Independent Studies entitled “A House Divided: The AFRB and China’s Subnational Diplomacy in Australia”, which explains how China uses subnational diplomacy to exert influence over Australia. Below is the Executive Summary: Australia is an open society awash in Chinese foreign influence operations,

2

China’s credit surge rolls on

No end in sight to the latest round of Chinese debt with October leading at 690tr yuan for banks and 1.42tr for total social financing: New loans are thumping along: The rolling annual says it all: Non-bank finance is back big but it’s not so much shadow these days as it is bonds: M2 fell

4

To beat China, US should tax Ray Dalio out of existence

Via Sinocism: It is Fifth Plenum week as the fifth plenary session of the 19th Central Committee of the Chinese Communist Party meets in Beijing from Monday through Thursday. Today Xi gave a work report and presented the “discussion drafts” of the proposals for the 14th Five-Year (2021-2025) Plan for Economic and Social Development and

13

Morrison gas unplan to lift power bills

Sadly, yes, at Domain: Prime Minister Scott Morrison’s push to deliver 1000 megawatts of new gas-fired power capacity into the nation’s main energy grid could discourage investment in battery technology, imperil the clean energy transition and risk financial losses for the taxpayer-backed Snowy Hydro scheme. Experts and industry insiders told The Sydney Morning Herald and

2

Chinese recovery still hangs on stimulus

China dropped its Q3 data dump late yesterday so let’s take a look. Year to date GDP came in at 4.9%: The growth internals for September were 1.2% for industrial production YTD, fixed asset investment 0.8% YTD and retail sales -7.2% YTD but 3.3% YOY: Property sales were solid in Q3 but have lately tumbled:

3

China keeps credit pedal to the metal

China’s PBOC released new yuan loans for September last night it remains credit pedal to the metal with total social financing at 3.48tr yuan of which 1.9tr was bank lending: The non-bank share has rebound strongly but that is distorted by the inclusion of local government bonds these days: The three month moving average of

4

Evergrande finds breathing space

I am not worried about this at all. China cannot afford to let a daisy chain of failures rip through its ponzi-developer sector. It is the key policy lever for stimulus as the world stumbles through COVID. Via Bloomie: China Evergrande Group took a major step toward avoiding a cash crunch that had threatened to roil

0

Empty apartments drive China PMIs higher

China’s latest batch of NBS PMIs are out and show no surprises. Manufacturing is struggling: In September , the Purchasing Managers Index ( PMI ) of China’s manufacturing industry was 51.5% , an increase of 0.5 percentage points from the previous month , indicating that the manufacturing industry has rebounded. Services, read construction, is booming: In September , the non-manufacturing business activity index was 55.9% , an increase of 0.7 percentage

4

Chinese housing bubble about to pop?

Via ZH: Is China’s housing bubble – the main “wealth effect” for hundreds of millions of middle class Chinese – finally about to burst? On Friday, trading in onshore bonds of China Evergrande, China’s second largest and the world’s most indebted property developer, was halted after reports it was seeking government help to stave off

2

Pettis: Chinese economic bounce short-lived

Vai FTAlphaville: This is a guest post by Michael Pettis, a finance professor at Peking University and a senior fellow at the Carnegie-Tsinghua Center. His new book ‘Trade Wars are Class Wars’ was co-authored with former FT Alphavillain Matt Klein and is available at all good book stores. On Tuesday, China’s National Bureau of Statistics

13

China builds its empty fortress of solitude

Below find a full review of this week’s China data. Apologies for the lateness. Had some “issues”. First out was August credit which has had its ears pinned back with TSF at an impressive 3.58tr yuan. Banks made up a lousy 1.2tr of that: Meaning that shadow finance is roaring ahead again, though this now

15

DFAT head calls out Chinese ‘bullying’

One of the biggest positives to come out of the COVID-19 pandemic is that its has forced the federal government to grow some cajones and stand up to Chinese Communist Party (CCP) bullying. The latest salvo comes from Australia’s top diplomat, DFAT Secretary Frances Adamson, who in a detailed interview in the Weekend Australian vowed

33

China’s modernising military

Via Sinocism: DOD Releases 2020 Report on Military and Security Developments Involving the People’s Republic of China > U.S. DEPARTMENT OF DEFENSE > Release This report accounts for the PRC’s national strategy and the drivers of China’s security behavior and military strategy, covers key developments in China’s military modernization and reform, and provides new insights

0

China PMIs scream empty apartments!

The one-trick pony stumbles on. The latest Chian manufacturing PMI managed weak growth: In August , the Purchasing Managers Index ( PMI ) of China’s manufacturing industry was 51.0% , a slight decrease of 0.1 percentage point from the previous month , indicating that the overall manufacturing industry was operating smoothly.   New orders grinding higher. New export orders still falling which is pretty remarkable. But

2

China PMIs grind higher

Via China’s NBS comes the manufacturing PMI: In July , China’s Manufacturing Purchasing Managers Index ( PMI ) was 51.1% , an increase of 0.2 percentage points from the previous month , and was above the threshold for five consecutive months. Export orders bottoming. Services PMI: In July , the non-manufacturing business activity index was 54.2% , a decrease of 0.2 percentage points from the previous month , and continued to remain above the threshold.

37

CCP police threaten Chinese Australians

Alarming video footage has leaked of Chinese Communist Party (CCP) police threatening Chinese Australians that speak out against the authoritarian Xi Jinping regime: The #CCP will hunt you down wherever you go: Witness this video of a Chinese police officer threatening @Horror_Zoo, who lives in Australia, over her tweets about Xi Jinping. CCP insinuates it

8

China drops new credit bomb

China likes to pretend that it’s not unleashing credit stimulus but it is. New yuan loans for June are out and evidence is unequivocal. Total social financing was at 3.43tr yuan with banks accounting for 1.81tr of that: Shadow banks are back in a big way: The surge in new loans is obvious year on