China Economy

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Caixin PMIs confirm China sag

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

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China PMIs elegantly swan dive

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

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China says no to property speculators (or does it?)

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

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China’s “social credit score” in action

Here’s a dystopian vision of the future: A real announcement I recorded on the Beijing-Shanghai bullet train. (I’ve subtitled it so you can watch in silence.) pic.twitter.com/ZoRWtdcSMy — James O’Malley (@Psythor) October 29, 2018 Put your feet and on the seats and prepare for imminent “re-education”. Coming to a Victorian town near you. Via the ABC: Victoria

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China’s LNG panic fades away

Good news. Australian LNG export prices are falling as the China panic of 2017 is not repeated. Via Reuters: A FLEET of half a dozen tankers carrying unsold liquefied natural gas (LNG) has been floating in Singapore and Malaysian waters for up to two weeks as winter demand in Asia looks weaker than initially expected,

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Is China about to crash?

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

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Welcome to the ‘school’ of Xi Jinping thought

Via Foreign Affairs comes Kevin Carrico, lecturer in Chinese studies at Macquarie University, the translator of Tibet on Fire, and the author of The Great Han: Race, Nationalism, and Tradition in China Today: Classes in Marxism have long been compulsory in Chinese universities, normally welcomed by tired students as an excellent chance to catch up on their

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Runaway Chinese house prices cool a bit

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

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China’s dangerous dollar addiction

Via Edoardo Campanella, Future World fellow at IE University’s Center for the Governance of Change in Madrid, at Foreign Policy: The trade war with the United States may soon hit China where it hurts, making it hard for Beijing to satisfy its voracious appetite for natural resources. Every year, China spends roughly $350 billion just to purchase

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Is China facing “cascade crisis”

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

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Chinese credit slows even faster

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

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What is the Chinese stock crash telling us?

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

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Chinese inflation eases

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

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Another China indicator craters

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

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Chinese trade slows

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

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Cold War 2.0 craters alternative China PMI

Via Bloomie: The CKGSB Business Conditions Index, compiled by the Cheung Kong Graduate School of Business, dropped to the lowest level in its seven-year history in September as the U.S. and Chinese governments imposed new rounds of tariffs on each other’s exports, escalating the trade war. I don’t usually follow it but the survey appears to have

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Chinese stimulus ramps up

Via Bloomberg: China’s central bank cut the amount of cash lenders must hold as reserves for the fourth time this year, as policy makers seek to shore up the economy amid a worsening trade war. The People’s Bank of China lowered the required reserve ratio for some lenders by 1 percentage point, effective from Oct.

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Chinese ‘sharp power’ crisis grows as US reveals global “hack”

Via Bloomie today: In 2015, Amazon.com Inc. began quietly evaluating a startup called Elemental Technologies, a potential acquisition to help with a major expansion of its streaming video service, known today as Amazon Prime Video. Based in Portland, Ore., Elemental made software for compressing massive video files and formatting them for different devices. Its technology

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China outlaws bad economic news as economy slows

I’m pretty sure that Australia’s politico-housing complex (from the corrupt RBA to the Property Council) would agree wholeheartedly with this, via NYT: China has long made it clear that reporting on politics, civil society and sensitive historical events is forbidden. Increasingly, it wants to keep negative news about the economy under control, too. A government

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China PMIs sink

Via Capital Economics: • The latest PMI readings suggest that growth slowed last month. The breakdown points toward weaker exports, though it’s too soon to know if this is due to US tariffs or simply the result of cooling global growth. Meanwhile, a jump in the construction PMI suggests that fiscal easing may be gaining

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Trade war rams China PMI

Via China’s National Bureau: In September 2018 , the China Manufacturing Purchasing Managers Index ( PMI ) was 50.8% , down 0.5 percentage points from the previous month . It continued to operate in the boom zone, and the overall manufacturing industry continued to expand, and the growth rate slowed down. In terms of enterprise scale, the PMI of large enterprises is 52.1% , which is the same as last month, and

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How China steals technology

Via the WSJ: DuPont Co. suspected its onetime partner in China was getting hold of its prized chemical technology, and spent more than a year fighting in arbitration trying to make it stop. Then, 20 investigators from China’s antitrust authority showed up. For four days this past December, they fanned out through DuPont’s Shanghai offices,

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A hint about the future of Chinese leverage

Via FTAlphaville: This summer Evergrande, the Shenzen- $144bn real-estate goliath, invested $860m in Faraday Future, an electric car maker aiming to take Tesla’s crown. The investment may have been defensive. Evergrande is diversifying its asset base away from its holdings of real estate; the move may be a hint about the future of China’s hyper-leveraged real estate

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Trump plans “administration wide broadside” on China

Via Axios: The Trump administration is planning to launch a major, “administration-wide,” broadside against China, according to two sources briefed on the sensitive internal discussions. These sources, who weren’t authorized to discuss the plans with the media, told me the effort is expected to launch in the next few weeks. The details: The broadside against China

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Chinese rents soar as apartments to Mars stand empty

Via Zero Hedge: Beijing has been trying to calm its bubbly real estate market with policies that divert investor funds into China’s rental market. But the policy shift to increase the supply of rental housing has backfired, leaving most middle-class Chinese with a rapid increase in living expenses. The reason: the government’s latest centrally planned