The People’s Bank of China has published the latest set of monetary statistics for May 2011. At the end of May, M2 money supply reached RMB76.34 trillion, increasing by 15.1% yoy, lower than 15.3% yoy growth last month, and continued to dip below the pre-crisis average growth rate.  The market consensus looked for a 15.5%

Exclusively from Michael Pettis newsletter: My SWS associate Chen Long tells me that last week’s markets indicate that monetary conditions in China are still pretty tight, as measured by the cost of short-term liquidity in the interbank market. As I have argued before, I think this says a lot more about the extent of domestic

From Project Syndicate today comes this piece from Stephen Roach (who I do admire) on why this time it is different for China. I’ll give a peremptory hat tip to anyone that can debunk all ten… Here are ten reasons why it doesn’t pay to diagnose the Chinese economy by drawing inferences from the experiences

From Societe Generale overnight comes a new intensive study of the changing composition of Chinese inflation and how it will radiate outwards. Fascinating reading and essential knowledge for every Australian. Remember the phrase: “deflation in all you own, inflation in all you need”…

Niall Ferguson coined the term “Chimerica” to characterise the economic relationship between China and the United States. In his view, China does the saving, and the United States does the spending.  This is true to a certain extent but that does not mean that China does not borrow. Today, I want to explore debt in the

The People’s Bank of China has raised interest rates and reserve requirement ratios a number of times since last year as the government pledged to make inflation fighting and property price curbing their top priority.  So far, the two main objectives have not been achieved.  However, the effect of tightening has been increasingly visible. For

Exclusively from Michael Pettis’ newsletter: Quite a lot of data came in this week as I was recovering from the jet lag generated by last week’s trip to the US, and for good measure, the PBoC then raised minimum reserve requirements Thursday evening. I don’t have much to say about the hike, beyond what will

  We need a new framework for understanding and interpreting what is happening in China. As a friend recently commented to me, there should be three categories of economies: developed, developing and China. China may struggle, but it will struggle in a uniquely Chinese way, and inevitably pose deep questions about the future of capitalism.

The World Bank has damned the lifeboats in its China Quarterly Update and called out multiple risks including a housing bubble, inflation and external imbalances. Here is the money excerpt: Inflation is unlikely to escalate but there are risks. Food price increases seem to have slowed for now, sequentially, and the (yoy) rate of increase in

From Michael Pettis this week: On Friday last week the National Bureau of Statistics released the eagerly anticipated first quarter data. 　As has been widely reported, first quarter GDP was up 9.7% year on year. CPI inflation 5.4% in March, a 32-month high, and up from 4.9% for the first two months of this year.　 For the first

From the ANU’s East Asia Forum comes this sobering assessment of the challenges facing the Chinese economy: China recently wrapped up the National People’s Congress (NPC) and Chinese People’s Political Consultation Conference (CPPCC) with the approval of the 12th Five Year Plan (FYP) (2011-2015). At the top of the new blueprint is a commitment to

Here’s a heads up about the important Chinese data that is out around lunchtime today.  Amongst the raft of data to be released is the GDP data. Chinese growth is increasingly important to everyone on the planet as our beloved Central Bank Governor pointed out in New York two nights ago. The chart below shows the

Below find the executive summary of a new report into China’s housing bubble from The Economist Intelligence Unit. It has some terrific stats and is well worth your time, even though its analysis and conclusion add up to the intensely suspicious conclusion that ‘this time it’s different’. One particular claim I’ll take umbrage with is

From Nouriel Roubini at RGE Monitor: I’m writing on the heels of two trips to China during which I met with senior policy makers, bank executives and academics, just as the government launched its 12th Five-Year Plan, intended to rebalance the long-term growth model. My meetings deepened my own impression and RGE’s long-standing house view of

Exclusively from Michale Pettis’ newsletter: Three months ago during their 2010 Q4 conference, the PBoC said that they believed that the global economic recovery would continue in 2011, although they acknowledged a great deal of uncertainty. The PBoC also said that stabilizing the price level was their top priority, and the central bank planned to

Analyst presentations can be tedious affairs, often an equal mix of the obvious and the dubious. But one I saw about China’s Five Year Plan’s implications of Australia really had me listening closely. The visiting China-based analyst was showing a slide of the projections of the growth in “low carbon” energy out to 2015. It

` Exclusively from Michael Pettis newsletter: Quite a few numbers came out this week, but none of them were especially dramatic or likely to change anyone’s mind about anything. The most interesting thing to me is that there are indications that, once again, the economy may be slowing quickly. Every time Beijing gets worried about too

The pressure is growing for China to open up its capital markets as a way to solve its internal bubbles. The question is: how will that affect the rest of the world? The greatest impact of China – its massive scale – is so far largely confined to trade and global production chains. What happens if

Exclusively from Michael Pettis’ newsletter: It seems the weird period of money-market tightening seems to have abated, at least for now.  My SWS colleague Chen Long tells me the following: The PBoC has injected liquidity through open market operations for the 16th consecutive week. The central bank issued RMB 1 billion in 3-month bills and RMB

From Michael Pettis’ exclusive newsletter: Last week the National Bureau of Statistics released inflation data for the month of January: In January 2011, consumer price index rose by 4.9 percent over the same period of the previous year. Of which, urban area and rural area was up by 4.8 percent and 5.2 percent respectively; the price

The stated goal of the Hu Jintao-led Chinese government is a “harmonious society”. Perhaps that is why the word “Egypt” was blocked on certain search engines over the weekend. Multiple factors are in play in Egypt, but there is one vital similarity with China: Food inflation of a breadth and severity that few in the