Via Bloomie: Officials are drafting measures to bolster sales of cars and electronics, according to people familiar with the matter, who asked not to be named because they aren’t authorized to discuss the plan. That news coincided with data showing a 6.4 percent year-on-year expansion in the first quarter — beating economists’ estimates. China’s latest
From Capital Economics this time: • China’s economy stabilised in Q1 thanks to a marked improvement in activity last month. Admittedly, the latest surge in industrial production is hard to take at face value and is likely to be partially reversed in the coming months. And some downside risks to broader growth remain. But the
Chinese data for March is out and is, as always, eye-popping. GDP slowed markedly in the quarter 1.4% though annual held up at 6.3%: Under the bonnet it starts to get stupid. Industrial production rocketed to 8.5% as the trade war crushed output. That’s just a plain lie in my book but we can’t have
Ah, as night follows day comes Chinese real estate markets already turning as the 2019 credit drenching lifts alt boats, via Reuters: Average new home prices in China’s 70 major cities rose 0.6 percent in March, quickening from a 0.5 percent gain in February, according to Reuters calculation of data released by the National Bureau
Not much doubt about it now. Chinese new credit for March was out over the weekend and the credit tap is awwwn with total social financing at 2.86tr yuan and bank loans at 1.69tr: Shadow banking surged to 40% of finance and appears to be forming a bottom: M2 growth jumped to a one year
Vai Capital Economics: • Higher food and oil prices pushed up headline inflation last month but broader price pressures remained subdued and we don’t anticipate an imminent turnaround in underlying inflation. • Consumer prices rose 2.3% y/y in March, up from 1.5% y/y in February (the Bloomberg median was 2.3%, our forecast was 2.1%). (See
Good stuff from Michael Pettis at Bloomie (a few weeks old but worth revisiting): What’s less-understood even now is that if China begins a serious deleveraging, reported GDP growth rates will fall by a lot more than expected – by more than the amount of non-productive activity that had formerly been capitalised. This is clear from
Here is the future as the LNG glut takes shape in Asia, via Reuters: U.S. producers of liquefied natural gas (LNG) are wooing buyers with offers to sell gas priced against benchmarks other than U.S. domestic prices, ahead of an expected flood of supplies on global markets this year. …The United States, the world’s fastest
Via Caixin: China’s manufacturing sector finished the opening quarter of 2019 on a positive note, with operating conditions improving for the first time since last November. Firms signalled slightly quicker rises in output and overall new work, while employment increased for the first time in over five years. Firmer demand conditions led to a softer
Yesterday China released its March PMI and the news was pop: The internals were better for domestic demand while external remains weak: The non-manufacturing PMI also firmed up: Driven, as always, by building: In terms of industries, the service industry business activity index was 53.6% , a slight increase of 0.1 percentage points from the previous month , and the service
Over the weekend Chinese house prices were out for February and showed ongoing slowing with month on month prices up 0.5% versus 10.4% year on year: Clearly year on year is about to peak as well. Breadth of gains is also deteriorating slowly with 50/20 split on prices rises and falls/stable across cities: First tier cities
China dumped its Jan/Feb growth data this afternoon. It is staggering. The headline numbers were pretty hum drum with with fixed asset investment at 6.1%, industrial production at 5.3% and retail sales at 8.2%: Under the bonnet, the all important real estate sector remains a mixed bag with sales still down 3.6% year on year
Iron ore prices for…smack, smack, smack…snooooooooooore… Going nowhere. Nothing happening. At least we get Chinese data today. While there is a bit of excitement about an infrastructure rebound about the place the more important place to look will be this: If realty starts catch down to sales then Vale will not matter. If not, it
Via Westpac comes a nice wrap of the Chinese base case: Overview China’s 2019 National People’s Congress has come at a pivotal time for the nation as authorities continue their pursuit of quality growth amid considerable global economic and financial instability. Because of both factors, China’s growth target of 6.0%–6.5% for 2019 is lower and wider
Hello growth problem. Chinese new yuan growth for February was out overnight and the credit surge of January landed on the credit bust of February with total social financing up a lousy 703bn yuan: Shadow banking shrank: The three month moving average is still up 17% year on year: The rolling annual fell away: As
China released its February inflation figures yesterday and the struggle goes on. The CPI fell to just 1.5% though it ripped 1% in the month: But a look under the bonnet shows it will be temporary, driven entirely by a short term fruit and veg price spike: Industrial inflation was even weaker at 0.1% though
Via Capital Economics: • The February trade data are downbeat, even accounting for seasonal distortions. Tariffs are weighing on shipments to the US. But broader weakness in global demand means that, even if Trump and Xi finalise a trade deal soon, the outlook for exports remains gloomy. • Export growth dropped back from +9.1% y/y
Via FTAlphaville comes deja vu all over again: Up nearly 25 per cent year-to-date, China’s equity market, as measured by the Shanghai Composite, stands out as the star performer of 2019, far outpacing the S&P 500 and MSCI World Index, which have each gained just 11 per cent this year. The double-digit gains come after
For now, via Capital Economics: • The People’s Bank (PBOC) does not appear to have intervened substantially in FX markets in February, suggesting that the renminbi is not facing much downward pressure at present. However, with the economy likely to slow further in coming months and interest rates set to fall, the currency will probably
The Caixin China services PMI just missed big: Summary – Services and Composite PMI data The Caixin China Composite PMI™ data (which covers both manufacturing and services) indicated a softer rise in Chinese business activity during February. At 50.7, down from 50.9 at the start of 2019, the Composite Output Index pointed to a marginal expansion
As expected, from Xinhua: China has set its GDP growth target at 6-6.5 percent for 2019, according to a government work report available to news media Tuesday morning ahead of the annual legislative session. Cut from “around 6.5%” previously. Given growth is currently at 6.4% that is sensible enough: That said, the last quarterly reading
From China Stats Bureau today comes Chinese house prices up 0.6% in January and 10% over the year: Top tier cities have picked up recently: The advance decline ratio remains quite strong: And the raw data: Still strong enough for gains in starts but they are going the other way for now:
Via FTAlphaville: March 1 may no longer be a “magical date” for President Trump, but the deadline after which tariffs on $200bn worth of Chinese imports are set to more than double is fast approaching. Now in their ninth round of negotiations, the US and China remain at odds on a number of issues, despite making some
Cross posted from Investing in Chinese Stocks. With the January surge in liquidity looming in the distance, the Chinese real estate market is hitting an important turning point. iFeng: 2019年楼市或加速分化 楼市成交整体走低 According to the statistics of the Krui Real Estate Research Center, during the Spring Festival, the data of more than 40 key monitoring cities showed that
China released its January credit numbers over the weekend and it has unleashed its credit cracken. Bank loans were at 3.2tr yuan and non bank at 1.6tr for total social financing of 4.6tr yuan: Shadow banking also rebounded to 30% of the total: M2 pushed up to 8.4%: The rolling annual boomed: Under the bonnet,
Via Nikkei: A massive building boom across China, including in tier-two cities like Jinan, has left as many as 65 million empty apartments across the country, according to estimates by Gan Li, a professor at Southwestern University of Finance and Economics in Chengdu. Sales volumes in 24 cities tracked by China Real Estate Index System fell
Via Capital Economics: Shipments beat expectations but seasonal distortions muddy the water • The January trade data were much stronger than anticipated but seasonal volatility caused by annual shifts in the timing of Chinese New Year make it difficult to get a good grip on underlying trends at this time of year. Even if the
Bank of England chief Mark Carney has some bad news for Australia, warning that: “(China) are not going to bail us out this time, I absolutely agree,” Carney said when asked about the ability of the world’s second-biggest economy to compensate for a slowdown in richer nations. But the most likely outcome was that the
By Leith van Onselen 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
Via Capital Economics: • The People’s Bank (PBOC) appears to have intervened little in FX markets last month, suggesting that the renminbi is not facing much downward pressure at present. However, with the economy likely to slow and interest rates likely to fall further over coming months, pressure is likely to return later this year.
