China Economy

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Caixin PMI adds to China rebound

Via Caixin: China’s manufacturing sector finished the opening quarter of 2019 on a positive note, with operating conditions improving for the first time since last November. Firms signalled slightly quicker rises in output and overall new work, while employment increased for the first time in over five years. Firmer demand conditions led to a softer

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China PMI rebounds

Yesterday China released its March PMI and the news was pop: The internals were better for domestic demand while external remains weak: The non-manufacturing PMI also firmed up: Driven, as always, by building: In terms of industries, the service industry business activity index was 53.6% , a slight increase of 0.1 percentage points from the previous month , and the service

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China house prices slow some more

Over the weekend Chinese house prices were out for February and showed ongoing slowing with month on month prices up 0.5% versus 10.4% year on year: Clearly year on year is about to peak as well. Breadth of gains is also deteriorating slowly with 50/20 split on prices rises and falls/stable across cities: First tier cities

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Daily iron ore price update (yawn)

Iron ore prices for…smack, smack, smack…snooooooooooore… Going nowhere. Nothing happening. At least we get Chinese data today. While there is a bit of excitement about an infrastructure rebound about the place the more important place to look will be this: If realty starts catch down to sales then Vale will not matter. If not, it

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China reform agenda for 2019

Via Westpac comes a nice wrap of the Chinese base case: Overview China’s 2019 National People’s Congress has come at a pivotal time for the nation as authorities continue their pursuit of quality growth amid considerable global economic and financial instability. Because of both factors, China’s growth target of 6.0%–6.5% for 2019 is lower and wider

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Chinese credit surge goes bust

Hello growth problem. Chinese new yuan growth for February was out overnight and the credit surge of January landed on the credit bust of February with total social financing up a lousy 703bn yuan: Shadow banking shrank: The three month moving average is still up 17% year on year: The rolling annual fell away: As

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Chinese lowflation continues

China released its February inflation figures yesterday and the struggle goes on. The CPI fell to just 1.5% though it ripped 1% in the month: But a look under the bonnet shows it will be temporary, driven entirely by a short term fruit and veg price spike: Industrial inflation was even weaker at 0.1% though

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Chinese trade slumps

Via Capital Economics: • The February trade data are downbeat, even accounting for seasonal distortions. Tariffs are weighing on shipments to the US. But broader weakness in global demand means that, even if Trump and Xi finalise a trade deal soon, the outlook for exports remains gloomy. • Export growth dropped back from +9.1% y/y

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China’s new bubble takes shape

Via FTAlphaville comes deja vu all over again: Up nearly 25 per cent year-to-date, China’s equity market, as measured by the Shanghai Composite, stands out as the star performer of 2019, far outpacing the S&P 500 and MSCI World Index, which have each gained just 11 per cent this year. The double-digit gains come after

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China controls capital outflow

For now, via Capital Economics: • The People’s Bank (PBOC) does not appear to have intervened substantially in FX markets in February, suggesting that the renminbi is not facing much downward pressure at present. However, with the economy likely to slow further in coming months and interest rates set to fall, the currency will probably

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Caixin China services PMI sinks Australian dollar

The Caixin China services PMI just missed big: Summary – Services and Composite PMI data The Caixin China Composite PMI™ data (which covers both manufacturing and services) indicated a softer rise in Chinese business activity during February. At 50.7, down from 50.9 at the start of 2019, the Composite Output Index pointed to a marginal expansion

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China cuts growth target

As expected, from Xinhua: China has set its GDP growth target at 6-6.5 percent for 2019, according to a government work report available to news media Tuesday morning ahead of the annual legislative session. Cut from “around 6.5%” previously. Given growth is currently at 6.4% that is sensible enough: That said, the last quarterly reading

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Chinese house prices slow

From China Stats Bureau today comes Chinese house prices up 0.6% in January and 10% over the year: Top tier cities have picked up recently: The advance decline ratio remains quite strong: And the raw data: Still strong enough for gains in starts but they are going the other way for now:

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Australia’s “stable” yuan problem

Via FTAlphaville: March 1 may no longer be a “magical date” for President Trump, but the deadline after which tariffs on $200bn worth of Chinese imports are set to more than double is fast approaching. Now in their ninth round of negotiations, the US and China remain at odds on a number of issues, despite making some

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Where will the next Chinese bubble be?

Cross posted from Investing in Chinese Stocks. With the January surge in liquidity looming in the distance, the Chinese real estate market is hitting an important turning point. iFeng: 2019年楼市或加速分化 楼市成交整体走低 According to the statistics of the Krui Real Estate Research Center, during the Spring Festival, the data of more than 40 key monitoring cities showed that

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Chinese trade booms!

Via Capital Economics: Shipments beat expectations but seasonal distortions muddy the water • The January trade data were much stronger than anticipated but seasonal volatility caused by annual shifts in the timing of Chinese New Year make it difficult to get a good grip on underlying trends at this time of year. Even if the

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Chinese capital outflow eases

Via Capital Economics: • The People’s Bank (PBOC) appears to have intervened little in FX markets last month, suggesting that the renminbi is not facing much downward pressure at present. However, with the economy likely to slow and interest rates likely to fall further over coming months, pressure is likely to return later this year.

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Desperado China orders another stocks bubble

Didn’t there used to some urban myth about the marvelous Chinese technocrat? Via Bloomie: Days after replacing an overly cautious securities regulator, Beijing has mounted a multi-pronged effort to revive the market’s buzz: It set out the framework for a new tech-stocks exchange, cleared the way for more margin loans, made it easier for securities

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China has not yet dodged a 2019 hard landing

Via Zero Hedge reporting on Credit Suisse: With the latest China economic data once again underwhelming overnight, it is safe to say that in a world where consensus overwhelmingly expect a global recession to arrive some time in 2020, China – which continues its aggressive shadow deleveraging campaign – remains the biggest potential catalyst for

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China readying rate cuts?

Hello Shanghai Accord! With the Fed in neutral, Barclays says China is next to cut, via Bloomie: “Existing measures are not sufficient to lower the financing costs of the real economy, in a down-cycle with rising credit risk and falling producer-price inflation,” the analysts led by Jian Chang wrote in a note. “Hence, lowering the

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China Caixin PMI down down

Via Caixin: Latest survey data signalled subdued overall operating conditions in the Chinese manufacturing sector at the start of 2019. Production and total new work were both slightly down at the start of the year, despite a renewed increase in export orders. Relatively muted demand conditions underpinned the first fall in purchasing activity for 20

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Chinese steel demand booming or breaking?

Yesterday we saw a strong rebound in the China steel PMI via MySteel: China’s Purchasing Managers’ Index (PMI) for the steel industry returned to the expansion zone, scoring 51.5 after a strong month-on-month growth of 5.9 basis points or a recovery for the second month after struggling in the contraction range over November-December 2018, amid

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Yuan fix goes long and strong into US trade talks

by Chris Becker Big moves by the PBOC today after the release of the Chinese PMIs which remained in contraction. The official fix was strengthened to 6.7025 from 6.7343 with offshore Yuan trading catching up quicksmart: This has been part of a greater move, orchestrated since the beginnings of the US/China trade talks to give

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China PMI remains in contraction

China’s January PMI is out and remains in contraction: In January 2019 , the China Manufacturing Purchasing Managers Index ( PMI ) was 49.5% , up 0.1 percentage points from the previous month . In terms of enterprise scale, the PMI of large enterprises was 51.3% , up 1.2 percentage points from the previous month and continued to be above the critical point; the PMI of small and medium-sized enterprises was 47.2% and 47.3% , respectively, down 1.2 and 1.3 percentage points from the previous month . Below the critical