China Economy

7

Caixin services PMI adds more sunshine

Via Caixin: The Caixin China Composite PMI™ data (which covers both manufacturing and services) signalled a solid increase in total business activity across China in November. The Composite Output Index rose from 52.0 in October to 53.2, to indicate the steepest rate of growth for 21 months. The upturn was driven by strong performances across

8

Blundell-Wignall: China’s stimulus days are over

From the always excellent Adrian Blundell-Wignall today at the AFR: In the early phases of economic development, authoritarian governments can more or less “buy” economic growth. Asia did it in the run-up to the 1998 crisis…In effect, “costs” — such as providing capital to new workers moving from the countryside to the cities — are

3

No more Chinese stimulus coming

Via Sinocism: And do not expect any new policy moves before for the Central Economic Conference later in December, and even then expect more battening down the hatches and struggling and grinding through economic issues rather than a big set of stimulus measures China will maintain currency stability, prudent monetary policy: PBC – Global Times

1

Caixin China PMI adds more joy

Via Markit: PMI data signalled a further modest improvement in the health of China’s manufacturing sector during November. New business rose strongly, which underpinned a further solid increase in production. Notably, new export orders saw the first back-to-back monthly rise for over a year-and-a-half. Staffing levels were broadly stable following a seven-month sequence of decline,

0

China PMIs lift

From China’s NBS over the weekend comes the PMIs: In terms of enterprise size, the PMI of large enterprises was 50.9% , an increase of 1.0 percentage point from the previous month ; the PMI of medium-sized enterprises was 49.5% , an increase of 0.5 percentage points from the previous month ; the PMI of small enterprises was 49.4% , an increase of 1.5 percentage points from the previous month . From the perspective of the classification index, of the five classification indexes that constitute

12

Alarms clang as Chinese financial stress spreads

Some more nice work from Zero Hedge today on Chinese financial stresses: Something is seriously starting to break in China’s financial system. Three days after we described the self-destructive doom loop that is tearing apart China’s smaller banks,  where a second bank run took place in just two weeks – an unprecedented event for a country where until earlier

1

More incremental Chinese stimulus as bank stress grows

Via Caixin: China’s central government has issued new bond quotas for 2020 to some provincial-level governments early, as the state seeks to fund infrastructure construction in a bid to shore up a flagging economy. Several financial officials in provincial-level governments told Caixin they have already received next year’s quotas of so-called special-purpose bonds from the

10

Another Chinese bank hits the skids

Via Reuters: Bundles of yuan notes were stacked high behind the counters of branches of Yingkou Coastal Bank earlier this month, as the northeast China lender fought off a run on deposits while onsite government officials battled rumors of a funding crunch. Yingkou was the latest small bank to have its deposit-reliant funding base undermined

1

Chinese industrial profits collapse signals deflation tsunami

I don’t usually bother with this indicator but it’s worth reporting today: 1 – 10 months, the national scale industrial enterprises realized a total profit of 50151.0 billion yuan, down year on year by 2.9% (on a comparable basis, considering the caliber adjustments under the statistical system, enhancing law enforcement statistics, eliminate duplicate data, enterprise

8

Beijing blindsided by Hong Kong universal rebellion

Here’s the chart that will get somebody’s organs harvested imminently in Beijing. The Hong Kong local elections: What a smashing. Sinocism wraps it up nicely: All indications are that Beijing is still trying hard to keep trade and Hong Kong tensions separate in the relationship with the US. There are more official denunciations of the

5

Beijing emboldened by Hong Kong ballot box drubbing

Via Antony Dapiran in Hong Kong: Landslide in Hong Kong: In which the silent majority speaks Dear friends, This is A Procrastination, an email newsletter from Hong Kong: City on Fire. World-renowned China scholar Geremie Barmé calls Hong Kong the “Best China”. Well, we certainly saw the Best China on display yesterday. Hong Kong Votes It is unusual for

8

Crushing Hong Kong will end Chinese globalisation

Via Epoch Times: Elements of the immediate and long-term aftermath of a Hong Kong massacre may include the following catastrophic results for the CCP: The destruction of Hong Kong’s reputation as a safe and free haven for business. The “Hong Kong miracle” will become tarnished with a loss of foreign investment and tourism. Killing the

9

Why are Chinese banks suddenly failing?

Via WSJ: Over the weekend, China’s Harbin Bank said it was now under government control. That comes months after Chinese authorities seized control of another small lender, Baoshang Bank, and state institutions took stakes in a third, Bank of Jinzhou. Bank runs have erupted elsewhere. Several other lenders have yet to file 2018 annual reports,

23

Another Chinese bank goes under

Via Zero Hedge: Confirming that there is something fundamentally broken with China’s debt transmission mechanism and that, by implication, Chinese bad loans are soaring, two weeks after we reported that there was a bank run at Henan Yichuan Rural Commercial Bank which brought the bank to the verge of collapse, the WSJ reported that Harbin Bank, a

18

Hong Kong’s last stand

Via Sinocism comes lots of Hong Kong texture: Hong Kong protests: Last stand under way as police close in on besieged Polytechnic University – The Washington Post Thousands of Hong Kong protesters flocked to a besieged Hong Kong college campus on Monday evening, accompanied by political leaders and school principals acting as mediators, hoping to

3

Will China take the stimulus plunge again?

Via the FT: China’s fixed-asset investment growth has sunk to its lowest level in two decades as the Chinese leadership’s cautious stimulus fails to prop up the domestic economy in the face of a deepening slowdown. … The deepening economic slowdown, intensified by the US-China trade row, has ratcheted up pressure on Beijing to launch

2

Chinese credit slows even more

Don’t look to China to save the global economy. October credit is out and was very weak with Aggregate Financing at 619bn yuan and bank lending at 691bn yuan: That is, shadow banking resunmed its contraction: The three month moving average for new loans moved closer to zero: The rolling annual has stalled: Though M2

1

China is going ex-growth

Via Christopher Balding: China is showing [export] declines across most product types and geographic partners. Chinese imports from the rest of the world fell 5% this year through September. Why is it showing such a divergence from the U.S.? There are three specific reasons: First, the Chinese economy is growing much more slowly than the

8

Chinese inflation goes completely nuts

Nobody does it like China. Inflation exploded in October: In October 2019 , the national consumer price rose by 3.8% year-on-year . Among them, the city rose 3.5% , the rural rose 4.6% ; the food price rose 15.5% , the non-food price rose 0.9% ; the consumer price rose 5.2% , and the service price rose 1.4% . 1 – 10 on average, the national consumer prices rose year on year by 2.6% . In October , the national

0

China seeks to calm bond market with rate cut

Via Caixin: China’s central bank took another step to lower borrowing costs on Tuesday to encourage lending amid growing downward pressure on the economy, implementing a small cut in the interest rate on the medium-term lending facility (MLF), a key reference used by banks to price their loans. The People’s Bank of China (PBOC) reduced

1

Caixin services PMI slows, casting doubt on growth

Via Caixin: The Caixin China Composite PMI™ data (which covers both manufacturing and services) showed a further modest increase in overall business activity during October. At 52.0, the Composite Output Index edged up from 51.9 in September, to post its best reading since April. Data broken down by sector indicated that the stronger performance was

4

Xi thrilled with handling of Hong Kong

Via Sinocism today: 习近平会见林郑月娥 Xi met with Carrie Lam Monday in Shanghai, says the Party Center has confidence in her. Minister of Public Security Zhao Kezhi attended the meeting. 在听取了林郑月娥关于香港近期局势的汇报之后,习近平表示,香港“修例风波”已持续了5个月,你带领特区政府恪尽职守,努力稳控局面、改善社会气氛,做了大量艰辛的工作。中央对你是高度信任的,对你和管治团队的工作是充分肯定的。止暴制乱、恢复秩序仍然是香港当前最重要的任务。依法制止和惩治暴力活动就是维护香港广大民众的福祉,要坚定不移。同时,要做好与社会各界对话和改善民生等工作。希望香港社会各界人士全面准确贯彻“一国两制”方针和基本法,齐心协力,共同维护香港的繁荣稳定。 After listening to Carrie Lam’s report on the recent situation in Hong Kong, Xi Jinping said that the Hong Kong SAR government, under your leadership,