China Economy


Is China stimulating again?

RBC thinks so: I Further build the case for a tactical factor-reversal trade (1-3 month scope), where on account of a number of ‘higher rates’ macro catalysts and quant seasonality trends, I see scope for ‘Value’ and ‘Size’ to reverse their recent underperformance relative to ‘Anti-Beta,’ ‘Growth’ and ‘Momentum.’ The latest data-point strengthening my view


China’s capital flight crackdown shifts to the mighty

Via Caixin: (Beijing) — China’s banking regulator has recently asked lenders to assess their credit-risk exposure to companies active in overseas acquisitions, sources close to the regulator told Caixin, as the country continues to curb a shopping spree that led to a record capital exodus last year. The China Banking Regulatory Commission said the risk


Chinese capital outflow slows to trickle

Via Capital Economics:  Capital outflows from China were broadly unchanged last month and are likely to persist at this relatively low level for the foreseeable future as households and firms increase their exposure to foreign assets. But unless sentiment on the renminbi turns significantly more negative again, outflow pressure should remain manageable.  China’s


Chinese house prices begin to fall

Cross-posted from Investing in Chinese Stocks. According to CASS data: The median price of the above cities (Beijing, Shanghai, Guangzhuo) in May were 61685 yuan per square meter, 54458 yuan, 22,273 yuan, respectively, compared with April decreased by 3.2%, 0.4%, 0.5%. Another first-tier cities in Shenzhen, the median price of 50423 yuan per square meter,


Kyle Bass on wrong currency short as Chinese debt “metastasises”

From Kyle Bass today via Reuters: Hayman Capital Management founder Kyle Bass on Thursday said he remains short the Chinese yuan despite the country’s latest change to the guidance rate, because he believes credit bubble problems are “metastasizing.” “What the public narrative is and what they have been doing behind the scenes are two completely


Recession? In a first, Chinese yield curve fully inverts

Credit stress is now very obvious in China. Interbank markets have all hit new yield highs in recent days: Even more revealing, the Chinese yield curve has fully inverted for the first time in modern history: An inverted yield curve is a classic recession indicator as short end tightening surpasses long term inflation expectations. We’ve seen


The Business does the Chinese debt time bomb

Above is an interesting segment on China’s debt time bomb, aired on ABC’s The Business last night, which also threatens the Australian economy. And to put China’s debt build-up into perspective, here’s a summary chart using data from the Bank for International Settlements: Note the explosion in Chinese non-financial sector debt over the past decade.


Vimal Gor on China in 2018

From the always excellent Vimal Gor today: Another fake break? This month President Trump faced increasing political problems, President Temer was swept up in another Brazilian corruption saga, North Korea lobbed more missiles in their relentless ‘testing’, and China’s credit ratings were downgraded by Moody’s. After a solid start to the month, markets started to


Chinese shadow tightening hits realty funding

From Investing in Chinese Stocks. Beijing has the tightest mortgage lending policies. The first-home interest rate is 1.1x benchmark. Some banks in Shanghai still offer 5% discounts, Shenzhen 3-5%, the four big banks in Guangzhou offer the benchmark rate. A second-home is 1.2x benchmark in Beijing, 1.1x in the rest of the first-tier. Beijing homebuyers


Caixin China PMI sags

Not happy: Operating conditions faced by Chinese goods producers deteriorated for the first time in nearly a year in May. The fall in the headline index coincided with slower increases in output and new orders, while staff numbers were cut at a quicker rate. Subdued demand conditions underpinned a renewed fall in purchasing activity, albeit


China’s PMI’s power on

First, the non-manufacturing index registered 54.5, up from 54 in April: Sub-sectors, the service business activity index was 53.5% , higher than last month 0.9 percentage points, the service industry growth rate has accelerated. In the industry sector, the business activities index, such as retail trade, rail transport industry, air transport industry, postal service industry,


Why China is EM and vice versa

From Citi: ‘China-dependence’ is not an EM-specific phenomenon, of course. The rise in the world economy’s dependence on China is captured in Figure 1, which shows the relative contributions to global growth that come from China and the US. China contributed 43% of global GDP growth last year; the US, 17%. It has been almost