China Economy


It’s raining China growth downgrades

More of them every day now: A slew of economists have cut their forecasts for China’s full-year economic growth in recent days after the country reported worse-than-expected data for April while still signaling that its tough anti-Covid curbs aren’t going anywhere. Standard Chartered Plc and Bloomberg Economics each downgraded their estimates for 2022 on Thursday,


China property prices begin to crash

Yes, it is a non-stop nightmare for the Chinese property market as “houses are for living in, not speculation”. The great adjustment has so far been confined largely to construction volumes over prices but no more! Late yesterday China released its latest 70-city guide to prices and kapow! April price falls were modest at -0.2%


The Chinese economy will not save you

OMICRON is going precisely nowhere. Sinocism: Shanghai Says It Has Stopped Community Spread of Covid – Caixin Shanghai announced Tuesday that it has achieved the goal of no community spread in all of its 16 districts, a key milestone in its over two-month battle with Covid that could embolden authorities to further ease restrictions. The


Chinese economy busts, steel booms!

Chinese April data was out late yesterday and crashed. Pantheon: China: Industrial production growth plummeted to -2.9% y/y in April, after growing 5.0% in March.  Consensus was 0.5%. China: Retail sales growth extended its collapse, at -11.1% y/y in April, from -3.5% in March.  Consensus was -6.6%. China: Fixed asset investment growth slowed to 6.8%


China in “huge shock”

Take this man away for organ harvesting: One of China’s top statistics officials said the coronavirus outbreak has come as a “huge shock” to the economy, a rare recognition of the cost of the government’s Covid Zero strategy, but added that it will only have a short-term impact on production and people’s lives. Sheng Laiyun,


Beijing fiddles as Chinese economy burns

There is some more slow progress on OMIRCON in China but the economy is still depressed, property in particular: Hooray! Chinese Premier Li Keqiang urged officials to use fiscal and monetary policies to stabilize employment and the economy as the country reels from Covid outbreaks and rising inflationary pressure. Except: The official line coming out


China can’t beat OMICRON

Though it is sure going to try. Sinocism: The system has its marching orders from the Standing Committee meeting last week and no measure is too harsh if it will help the local officials hit their targets for clearing cases from community transmission. 坚守为了人民 坚持就是胜利 Page 1 People’s Daily commentary Tuesday – “Persevere for the


And now for the Chinese trade shock

China is already in recession and its jobs market is in all sorts of bother: There is still no real end in sight for lockdowns, Sinocism: Sun Chunlan calls for more regular testing, Shanghai rolling out a series of new restrictions, Beijing’s “lockdown-lie” is expanding 孙春兰:毫不动摇坚持“动态清零”总方针,坚决巩固住来之不易的疫情防控成果_中国政库_澎湃新闻-The Paper The Joint Prevention and Control Mechanism of the


Chinese property crashes through the floor

It is amusing to watch, in the usual dark way, as Chinese authorities butcher their response to the property crash that they themselves triggered (quite rightly, I might add). I am not sure why the attempted rescues are so badly structured but the import of it is that there is no end in sight. New


Chinese economy funeral pyre roars

The Chinese hard landing continues to burn. The two failed engines of growth are still aflame. OMICRON progress is slow and now inhibited by the Beijing outbreak: The lockdown impact on the economy and property is a roaring blaze: China’s current activity indicator is deep in recession: More policy moves are afoot: Chinese local governments


China zero-COVID “worse” in 2022 than 2020

Barclays with a good note that sums up my own views nicely. I’d only add that whatever the final growth figure this year it will be grossly exaggerated.  — Downside risk increasing How has China credit performed so far in the recent local COVID outbreak? China credit spreads started to widen on 6 April, when


Inside the Chinese property crash

Barclays has a crack at the Chinese property crash today: Lifting lockdowns crucial for easing measures to take effect… We maintain our forecast of a 20% y/y decline in contracted sales in 2022e (China Property: Cautious on high-cash-price bonds, 2 March 2022), but downside risks increase if lockdowns are lifted later than we expect. We


Crashed Chinese economy burns out of control

It’s amusing to watch, in the usual dark way, as the crashed Chinese economy continues to burn while CCP firemen point the hose in all the wrong directions. First up, let’s catch up with how things are. COVID cases have fallen: So lockdowns have eased a little: The property crash is no better for either


The Fed is going to blow up China

As I have argued for a year or so, the Fed rate hiking cycle was always going to end not in a US crisis but a Chinese one. This is because a rising DXY and falling CNY puts a lot of pressure on EM capital flows and China has been experiencing those hand over fist


China rolls out the construction too little, too late

The COVID shock continues to hit the Chinese economy hard as cases fall: Especially in property: More help is coming. Goldman: Bottom line: At the Central Financial and Economic Affairs Commission meeting on April 26th, President Xi called for stepping up infrastructure construction, especially on transportation, energy, water conservancy and “new infrastructure”. He emphasized both


Chinese recession threatens nuclear meltdown

Yesterday China pledged more of the same: China said it would step up infrastructure construction after a meeting Tuesday chaired by President Xi Jinping, the latest sign of an all-out effort to bolster an economy that’s been hammered by a widening series of Covid-related lockdowns. The central financial committee decided to enhance and advance projects


China pushes on a fiscal string

One of the more unusual features of the current China bust is that its stimulus efforts are hampered not just by a classic debt-deflation cycle inhibiting monetary policy but by a blockage in the transmission of fiscal easing. Why? Falling land sales are gutting fiscal revenues. This is set to get much worse in the


China to become “super aged” society

Demographics is destiny, they say. China’s ageing population has long been considered the economy’s number one long-term headwind. The ‘One Child Policy’ implemented in the 1970s and abolished in 2016 was credited with preventing some 400 million births between 1979 to 2010. The policy initially created a demographic structure that was ideal for economic growth,


Chinese property crash lands

No hard landing for Chinese property. It’s a crash landing instead. The latest sales numbers are a disaster: OMICRON is being beaten back for now:   At the price of recession: And the moment it opens up again, OMI will run wild back into new lockdowns ad infinitum. As expected, CNY is starting to crack:


Recession China pushes even harder on a string

Chinese authorities are doing everything in their power to avoid doing what they must as the economy tanks. The PBOC: Covid-Related Policies A promise to use monetary policy tools to provide sufficient liquidity, guide banks to expand loan extension and transfer profits to the real economy appropriately A pledge to expand the relending quota for


More on China versus OMICRON

Nordea first: According to the official numbers, China’s GDP increased 4.8% y/y in Q1 but the short-term economic outlook is severely hurt by Omicron and the political risks are making their way back to the center of discussion. The first four months of 2022 have been full of important turnarounds in China and much has