China Economy


China won’t stimulate this time

Via Vertical Group:  Despite Mounting Signs of a Slowdown in China’s Economy, We Do Not Believe Big Gov. Stimulus Will Rescue Investors this Time. China’s total social financing (“TSF”), the broadest measure of new credit, was lower than necessary in Nov. That is, despite beating Cons. ests., and rising 105% from Oct, total credit


Chinese house prices ease

Chinese new home prices out on the weekend and the bifurcated market continues. Monthly values were up 0.9% and  yearly by 9.6%: Here’s the raw data: First tier cities are becalmed but below that it is all still gogo: 63 out of 70 cities are rising: Which has set up an unusual divergence between house


Resistance is futile: Chinese workers assimilated by The Borg

Via SCMP: Workers outfitted in uniforms staff lines producing sophisticated equipment for telecommunication and other industrial sectors. But there’s one big difference – the workers wear caps to monitor their brainwaves, data that management then uses to adjust the pace of production and redesign workflows, according to the company. The company said it could increase


Chinese credit keeps on sinking

Chinese new yuan loans for November were out last night and keep on keeping on, down. Bank loans came in at 1.25tr yuan and total social financing at 1.53tr yuan: This was down -5% year on year and 3MMA remains negative: Shadow banks remain a shadow of their former selves: M2 was stable at 8%:


Why isn’t Chinese stimulus working?

Via Goldman: …two challenges brought us here. Internally, policymakers’ efforts to constrain the growth of shadow banking and reduce financial risks worked almost too well. Financial regulations introduced in 2017 and early 2018 led to a meaningful contraction in shadow banking, which slowed overall credit growth and tightened credit conditions, particularly for private companies. And externally,


Chinese trade and inflation data deteriorate

China release trade and inflation data over the weekend and both showed it is slowing sharply. For trade, exports were 5.4% year on year and imports 3.0%, both large misses to expectations. The trade deficit is still large at $44.7bn: Inflation was also concerning. The CPI decelerated sharply: Aided by petrol: And the PPI slumped


Caixin China PMI not encrouaging

Via Capital Economics: • The latest survey data suggest that conditions in industry remained broadly stable last month. But we still think that growth will slow during the next few quarters, even though the immediate threat of additional US tariffs has receded. • The Caixin manufacturing PMI edged up from 50.1 to 50.2 in November.


China PMIs weaken further

From China’s NBS: In November 2018 , the China Manufacturing Purchasing Managers Index ( PMI ) was 50.0% , a slight drop of 0.2 percentage points from the previous month , at a critical point. In terms of enterprise scale, the PMI of large enterprises is 50.6% , which is 1.0 percentage points lower than that of the previous month and above the critical point; the medium-sized enterprise PMI is 49.1% , up 1.4 percentage points from the previous month , and the small enterprise PMI is 49.2% , compared


How long can China build empty apartments?

Theoretically forever given it owns its own banks: The real problem is, it can’t keeping doing it and keep lifting living standards. There are already 50-60m empty apartments, enough to house all future urbanisation: All of that wasted capital has a cost. It destroys productivity and income growth stalls. We are already there: So, the real question


Chinese credit sags anew

For a stimulating economy, Chinese credit isn’t exactly lighting us up. October new yuan loans were out overnight at 729bn yuan social aggregate financing and only 697bn yuan in bank loans: October is always slow but -30% year on year is slower than it ought to be: The shadow banking share fell away again: As


A new China shock brews for Australia

The Council of Foreign Relations has some bad news for Australia: Over the past two years, as our left-hand figure above shows, foreign portfolio investors have piled prodigiously into Chinese assets, helping to support the RMB. But history suggests this trend is about to reverse. While inflows have been rising, Chinese stocks have been tumbling—they are


50 million apartments sit empty in China

It’s the model of efficiency! Via Bloomie: Chinese President Xi Jinping’s mantra that homes should be for living in is falling on deaf ears, with tens of millions of apartments and houses standing empty across the country. Soon-to-be-published research will show roughly 22 percent of China’s urban housing stock is unoccupied, according to Professor Gan


Chinese inflation eases

From Capital Economics: Policymakers to look through temporarily elevated inflation • Headline consumer price inflation remained elevated in October. But with core inflation subdued and producer price inflation easing, we doubt policymakers will be too concerned. • Consumer price inflation remained unchanged last month from September, at 2.5% y/y (the Bloomberg median was 2.5%, our


Chinese trade still solid

Via Capital Economics: Little sign of tariff impact as exports growth remains resilient • Chinese export growth picked up slightly last month, with no sign yet that US tariffs have had a major negative impact. Import growth also picked up, driven largely by growth in underlying volumes. • Export growth picked up a touch in


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


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


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


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.) — 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


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,


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


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


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


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


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