China Economy

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IMF warns on Chinese property correction

A new paper from the IMF agrees with the MB outlook: After a temporary slowdown in 2014-2015 China’s real estate market rebounded sharply in 2016. As signs of overheating emerged, the government turned to tighten real estate markets through a range of macroprudential and administrative measures. Many empirical studies point out that the house price

2

ECB does the big China bust

Via the ECB comes a new report into what Chinese rebalancing means for Europe and the global economy: Although vulnerabilities have grown, China retains policy space to cushion against potential adverse shocks. China has high national savings, large foreign exchange reserves and a current account surplus, which help to shield it against an external funding crisis.

1

The seven hot words that define the future of Chinese property

Via IFeng: In 2017, the countdown has entered. The report of the 19th CPC National Congress basically determines the direction for the development of China’s real estate market in the new era. “Adhere to the house is used to live, not to speculate on the position to speed up the establishment of multi-agent supply, multi-channel protection,

1

China Caixin PMI yawns

Caixin PMI for October : October survey data signalled a further marginal improvement in manufacturing operating conditions across China. While new orders rose at a slightly quicker pace, production increased at the softest rate for four months. At the same time, companies continued to shed staff amid reports of company-downsizing policies and efforts to raise

1

Chinese PMIs hit Winter shut downs

China’s October PMIs are out and slowing, as expected. The headline manufacturing PMI was 51.6 vs 52 expected. All internals eased as well: The services PMI likewise eased to 54.3: Construction is slowing though still strong: Construction business activity index was 58.5% , down 2.6 percentage points from the previous month , is still in a higher economic range, the construction

7

China’s Congress ends, interest rates rocket, Pettis warns

If you needed a more elegant demonstration that everybody was waiting for the Chinese National Congress before seeing China slow then you need look no further than the bond market yesterday, via Reuters: Top policymakers at China’sCommunist Party Congress last week said that efforts to contain excessive risk-taking in the financial system will continue next

3

Chinese capital controls here to stay

Via Goldman: Our usual preferred gauge of underlying flows suggests a total net FX outflow of US$7bn in Sep (US$2.4bn from net FX demand onshore plus US$4.9bn in FX outflow routed through the CNH market). According to the SAFE dataset on “onshore FX settlement”, net CNY demand by non-banks onshore in Sep was -US$2.4bn (vs. +US$3.1bn in Aug).

5

China mulls its own “Minksy moment”

Via the FT: “When there are too many pro-cyclical factors in an economy, cyclical fluctuations will be amplified,” Zhou Xiaochuan, governor of the People’s Bank of China, said at a meeting on the sidelines of the Communist party gathering in Beijing. “If we are too optimistic when things go smoothly, tensions build up, which could lead

11

Chinese growth is hitting the skids

Chinese growth numbers are out for the September QTR and it was all bang on target with GDP at 6.8%: However, something much more interesting is happening under the bonnet. The September month partials were mixed but weak in the construction economy with industrial production at 6.6%, retail sales at 10.3% but fixed asset investment

8

Xi Jinping just warned Australia on growth (for now)

From Karen Moley today: You had to listen closely, but Chinese President Xi Jinping provided two important clues as to the economic policies he will pursue in his second five-year term in the course of his epic three-and-a-half hour opening address to the Communist Party congress. The first clue was provided by what he didn’t say. Xi made no mention

1

UBS rings bell on Chinese property boom

Not news to MB readers but some nice texture from UBS: Buying intention & activity rose further on price optimism Both home buying activity and intensions gained momentum. Our latest survey showed that one in six respondents had purchased a home in the past 6 months, a notable increase from the same period a year

29

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

4

Chinese credit still slowing

Chinese credit data for September was out on Saturday. Total Social Financing came in at 1.82tr yuan, banks made up 1.27tr yuan of that: Shadow banking accounted for 30%, consistent with the recent trend of slowing: Year on year growth in new yuan loans was a meager 5.8% but the three month moving average is