Via Goldman: …two challenges brought us here. Internally, policymakers’ efforts to constrain the growth of shadow banking and reduce financial risks worked almost too well. Financial regulations introduced in 2017 and early 2018 led to a meaningful contraction in shadow banking, which slowed overall credit growth and tightened credit conditions, particularly for private companies. And externally,

China release trade and inflation data over the weekend and both showed it is slowing sharply. For trade, exports were 5.4% year on year and imports 3.0%, both large misses to expectations. The trade deficit is still large at $44.7bn: Inflation was also concerning. The CPI decelerated sharply: Aided by petrol: And the PPI slumped

Via Capital Economics: • The latest survey data suggest that conditions in industry remained broadly stable last month. But we still think that growth will slow during the next few quarters, even though the immediate threat of additional US tariffs has receded. • The Caixin manufacturing PMI edged up from 50.1 to 50.2 in November.

From China’s NBS: In November 2018 , the China Manufacturing Purchasing Managers Index ( PMI ) was 50.0% , a slight drop of 0.2 percentage points from the previous month , at a critical point. In terms of enterprise scale, the PMI of large enterprises is 50.6% , which is 1.0 percentage points lower than that of the previous month and above the critical point; the medium-sized enterprise PMI is 49.1% , up 1.4 percentage points from the previous month , and the small enterprise PMI is 49.2% , compared

Theoretically forever given it owns its own banks: The real problem is, it can’t keeping doing it and keep lifting living standards. There are already 50-60m empty apartments, enough to house all future urbanisation: All of that wasted capital has a cost. It destroys productivity and income growth stalls. We are already there: So, the real question

For a stimulating economy, Chinese credit isn’t exactly lighting us up. October new yuan loans were out overnight at 729bn yuan social aggregate financing and only 697bn yuan in bank loans: October is always slow but -30% year on year is slower than it ought to be: The shadow banking share fell away again: As

The Council of Foreign Relations has some bad news for Australia: Over the past two years, as our left-hand figure above shows, foreign portfolio investors have piled prodigiously into Chinese assets, helping to support the RMB. But history suggests this trend is about to reverse. While inflows have been rising, Chinese stocks have been tumbling—they are

It’s the model of efficiency! Via Bloomie: Chinese President Xi Jinping’s mantra that homes should be for living in is falling on deaf ears, with tens of millions of apartments and houses standing empty across the country. Soon-to-be-published research will show roughly 22 percent of China’s urban housing stock is unoccupied, according to Professor Gan

From Capital Economics: Policymakers to look through temporarily elevated inflation • Headline consumer price inflation remained elevated in October. But with core inflation subdued and producer price inflation easing, we doubt policymakers will be too concerned. • Consumer price inflation remained unchanged last month from September, at 2.5% y/y (the Bloomberg median was 2.5%, our

Via Capital Economics: Little sign of tariff impact as exports growth remains resilient • Chinese export growth picked up slightly last month, with no sign yet that US tariffs have had a major negative impact. Import growth also picked up, driven largely by growth in underlying volumes. • Export growth picked up a touch in

Via Capital Economics: • The latest survey data, while not as bad as some feared, still paint a fairly downbeat picture. We expect the economy to weaken further in the coming months, triggering additional policy easing. • After slumping from 50.6 to 50.0 in September, the Caixin manufacturing PMI edged back up to 50.1 in

China has just officially been Trumped. The official China PMI is elegantly swan diving: Led by tanking new export orders: The services PMI was not much better: Again led by tanking export orders: Of course, building remains robust: The business activity expectation index is 60.6% , up 0.5 percentage points from the previous month , and continues to be in a high

China is warning away property speculators, at the AFR: China warned property speculators against holding false hopes for a price rally, in a report on Monday by state news agency Xinhua that said authorities would not loosen curbs on buyers to spur investment even as the economy slows. While property price gains have become more

So says super bear Albert Edwards: China is currently another place where there is over-complacency…the worry is that a Chinese policy response will send the global markets into a tailspin, just as the August 2015 devaluation did …at a time when economic growth is slowing sharply, led by the industrial (secondary) sector (see left-hand chart

China completed its September data dump on the weekend with house prices that cooled a bit, up 0.9% on the month and 7.9% on the year: 62 of 70 cities had rising prices: The top tier remains cold but the lower 80% of the market is still on fire: Here’s the raw data: And the

Via Bill Blain: Where America wins is in terms of economic muscle. The Japanese knew that before Pearl Harbour 80 years ago, the Russians learnt it in the 80’s. And now the Chinese are being treated to a similar lesson today. The US can withstand declining energy exports to China far longer than Xi can

Uh oh. Chinese new yuan loans for September were out last night and the numbers are a little worrying. On the surface they appear to be rebounding with good bank loans of 1.38tr yuan and total social financing of 2.21tr yuan: But the PBOC included local government bonds in the TSF number for the first

The Shanghai Composite is in free fall: This is despite the China National Team going hell for leather on buying. I suspect it is foreign capital fleeing Cold War 2.0. But that’s not all it is because the industrial earnings outlook is also deteriorating: Following still tightening credit down as the falling yuan bites, via

From Capital Economics: • Policymakers are likely to look through the latest pick-up in consumer price inflation and focus instead on evidence of cooling economic momentum, including slower core inflation and weaker factory gate price pressures. • Consumer price inflation rose in September, from 2.3% y/y to 2.5% (both the Bloomberg median and our forecast

This time hard data too, via Reuters: China’s car sales fell the most in nearly seven years in September, stoking concerns the world’s biggest auto market could contract for the first time in decades this year amid cooling economic growth and a biting trade war. Vehicle sales slumped by 11.6 percent to 2.39 million units

Via Capital Economics: • Exports continued to defy US tariffs last month but imports softened in the face of cooling domestic demand. We expect both to weaken in the coming quarters as economic growth slows in China and among its major trading partners. • Export growth accelerated in September, from 9.8% y/y to 14.5% in