China Economy

5

The great China slowing has already resumed

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

9

China mulls lifting coal ban as Aussie trade war backfires big

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.

4

China’s much vaunted consumption rise is drivel

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

1

Chinese growth ends 2020 with a bang

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

7

China hits the credit brakes

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

0

Chinese exporters plunder the virus wreckage

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

8

Geoff Raby departs with undying love for China

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

14

PBOC strengthens yuan as China goes into lockdown

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

0

Chinese consumer inflation picks up at the end of 2020

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

21

China is shrinking, and is about to shrink more

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

57

Karma hits China after Aussie export ban

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,

14

How long can China keep building 14k skyscrapers per year?

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

9

Chinese economy is pumping on all cylinders

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

10

Did the Chinese credit cycle just peak?

There is a goodly chance that it did. Last night’s PBOC new yuan loans came in at 2.13tr total social financing with banks at 1.43 tr: Non-bank lending has started to fall away as local government budgets tighten: New loans flow came off hard year on year: Rolling annual stock is still strong: But broad

7

Australia must not sign more trade deals with China

Trade Minister Simon Birmingham says the federal government is considering “all dispute settlement options” in response to China’s recent move to ban a range of imports from Australia. Birmingham has also suggested that the targeted nature of the import bans raises questions about China’s adherence to the free-trade agreement (ChAFTA) that the two nations signed

0

China PMIs firm but…

Via China’s NBS comes the manufacturing PMI In November , China’s Manufacturing Purchasing Managers Index ( PMI ) was 52.1% , an increase of 0.7 percentage points from the previous month , and was above the threshold for nine consecutive months, indicating that the recovery growth of the manufacturing industry has accelerated. In terms of enterprise scale, the PMI of large, medium and small enterprises was 53.0% ,

68

How to de-escalate China tensions

Kelly’s cowards returned on the weekend to demand Scott Morrison prostrate himself before Xi Jinping. Paul Kelly led them off: This week Morrison sent a series of messages but his most important theme — tricky but critical — is for Australia’s status as an independent player to be better recognised, as a nation allied to

13

China sows new COVID-19 lie

Via Sinocism: Raising more questions about the origins of SARS-CoV-2 New theories call for global COVID origin-tracing efforts – Global Times In response to a question about the WHO experts traveling to China soon for work related to COVID-19 origins, Zhao Lijian, a spokesperson of the Chinese Foreign Ministry said on Tuesday that since COVID-19

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