New yuan loans were out last night and, as expected, China has hit the brakes. Total social financing came in at 34ootr yuan with banks at 2730tr yuan of that: The pop in shadow credit is receding: The flow of new credit was down by over one-third year over year: The rolling annual smooths that
Over the holiday period, the FT had another confirmation piece of the MB view that China is set to slow, particularly in the most commodity-intensive sector of real estate: PBOC has instructed banks to cut credit availability. Macquarie says concerns about virus-impacted growth are gone and structural reform has resumed. Chinese real estate sales surged
For some months we have been of the view that Chinese growth will begin to slow materially in second half of this year. We reckon that robust export demand will be enough growth support for China to turn back to structural reform for the domestic economy. We have already seen confirmation of this in tightening
Last week historian Niall Ferguson published an alarming article, both in its scope and in its depressing errors: A Taiwan conflict could be the equivalent of the Suez crisis for the British Empire when it was exposed as a paper tiger. When Britain failed to take it back there was a run on the pound.
Via China’s NBS: 1. Operation of China’s Manufacturing Purchasing Managers Index In March , China’s Manufacturing Purchasing Managers Index ( PMI ) was 51.9% , 1.3 percentage points higher than the previous month , and the manufacturing industry rebounded. In terms of enterprise scale, the PMI of large, medium and small enterprises was 52.7% , 51.6% and 50.4% , respectively , up 0.5 , 2.0 and 2.1 percentage points from the previous month , all of which were higher than the threshold. From the perspective
Great analysis from Nordea: In 2021, China’s growth momentum cools off and the focus of global growth will temporarily move to other countries, which should be a negative factor for the CNY. In a longer horizon, China’s ambition continues to be high. China’s main political event of thee year, the National People’s Congress, came to
Chinese new yuan loans were out last night and managed a little bounce out of the recent declining growth trend. Total social financing was at 1.71tr yuan while banks made 1.36tr of that: Thus the non-bank leading share fell to its lowest in a year: Year on year growth of new loans doubled on base
Michael Every at Rabobank would make a great blogger. He’s often dramatic but he does have good grasp of underlying macro trends as well. Today he tackles as issue I have been discussing at length for some weeks: the convergence of Chinese and US trends: Don’t look now but even the Chinese currency is slowly
BofA writes that: China likely saw a baby bust in 2020… • China saw a notable decline in the number of newborns in 2020. The pandemic will likely have a lasting impact on birth rate, combined with negative structural factors. • Policymakers should abolish the family planning policy and introduce more incentives for new births
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.
