China Economy


China crash lands on impossible trinity

As expected, Chinese data is holding up OK on the usual CCP data massaging, but under the bonnet, the economy has crash-landed. Growth for the March quarter came in at 1.3% and YoY at 4.8%. Both were far ahead of expectations: The March activity data tells the truth. Industrial output was 5% YoY, fixed asset


Chinese economy “obliterated” by COVID, property crash

The Chinese economic hard landing is swiftly turning outright crash as OMICRON lockdowns and the property bust wreak havoc: The outcome is described nicely by Pantheon Economics: Zero-Covid Weighs on Trade, and Obliterates Domestic Demand China’s trade surplus rose unexpectedly in March, but the good news stops there. The boost came from a collapse of


Russian energy flows to China

The Parallelogram of Putin appears to be working just fine. A week or so ago, Blooime reported that energy had begun to flow again from Russia: Russian coal and oil paid for in yuan is about to start flowing into China as the two countries try to maintain their energy trade in the face of growing


China surrenders to OMICRON Frankenstein

Mwahaha. OMICRON is beating the Communist Party of China: China hasn’t budged in its opposition to living with the virus even in the midst of the country’s worst outbreak, but its leaders are now pursuing an easier containment strategy in the uphill battle to tame the hyper-infectious coronavirus. Omicron’s extensive spread means returning to zero


China credit pops as economy drops

Chinese credit had a better month in March. Goldman: Bottom line: March total social financing, RMB loans and M2 growth accelerated materially and were all well above market expectations on the back of policy support. Composition of RMB loans suggests broad acceleration of loan growth across sectors (with the only exception being household short-term loans,


Chinese property meltdown turns nuclear

Chinese property developers had a great week: A Bloomberg stock gauge of the country’s developers rose 1.6% Friday, putting its advance since mid-March at 42% — more than seven times that posted by the benchmark CSI 300 Index. Chinese offshore junk bonds, dominated by builders, also remain on pace to rise for a third week


Chinese economy lands hard upon Xi Jinping

The Chinese economic hard landing continues apace with economic activity hit across the spectrum. Credit Agricole: Q1GDP growth may edge up but with a notable sequential slowdown We expect Q1 GDP growth to be4.3% YoY, slightly higher than 4.0% in Q421, but in %QoQ saar terms, it could decline to 2.4% from 6.6% previously. Moreover,


China versus OMICRON

Some success and failure for the CCP battle against OMICRON today. Cases are still surging but the geographic spread has been constrained: Mobility may be bottoming out: But lockdowns are at their worst since Wuhan: And property sales remain catastrophic: As the scramble to stimulate rolls on: Quzhou in East China’s Zhejiang province has become


OMICRON infects China’s economy

One way or another, China made COVID and that Frankenstein monster has now returned for its maker. The latest numbers are mixed for the OMICRON outbreak: The numbers look more like they’re going exponential than coming down: China added more than 13,000 new Covid-19 infections with state media reporting a case infected with a new


PBOC panics as China plunges towards recession

China is plunging towards whatever is its version of recession and I see no reason why it will be short. Yesterday’s PMIs were awful. Goldman: 1. The China NBS purchasing managers’ indexes (PMIs) survey suggested manufacturing activity growth moderated in March, likely due to 1) supply chain issues caused by Covid-related restrictions and 2) the


Chinese hard landing arrives

The downgrades have begun. TS Lombard: The battle between property and Covid headwinds vs government stimulus will define China macro in 2022. So far, Beijing has failed to land a punch, as Covid and real estate worsen. An unusual statement from Liu He shows signs of panic and promises large-scale stimulus, but this will not


China pushes on a string as property goes bust

There’s no stopping the property adjustment: China’s major property developers saw market sell-offs on Tuesday after several firms said they may not be able to publish their annual earnings results for 2021 as required by the end of March. Sunac China, the country’s third-largest property developer, saw its shares tumble by as much as 20%


China bust to dump yuan

This is where the Fed tightening cycle lands hardest. Not in the US, in China as the post-pandemic goods export boom goes bust, exposing very weak domestic demand on the property adjustment and COVID. A falling CNY turns the entire EM complex toxic for markets,  Pantheon with the note. — The year ahead will be


China recession shock builds

It won’t surprise readers to know that the Chinese recession shock is building: China’s financial hub of Shanghai launched a two-stage lockdown of its 26 million residents on Monday, closing bridges and tunnels and restricting highway traffic in a scramble to contain surging COVID-19 cases. One-third of the Chinese economy is caught in the lockdowns,


OMICRON intensifies Chinese property crash

For a crash is what it is. OMICRON is eluding China with 35% of the economy now impacted. Goldman: Some areas are better than others. BofA: The good news is that Shenzhen and Dongguan opened up after 7 and 5 days of lockdowns, much sooner than we had expected (14 days). Also, there is no


Capital flees China, yuan in trouble

Albert Edwards of Society Generale with the note. Capital outflow from China is accelerating dramatically. If the tumbling JPY pushes more active devaluation then all bets are off. Amid Fed tightening and EM capital outflow pressuring capital accounts, a falling CNY adds pressure to EM trade accounts as well, and commodity prices, and the EM


Chinese property crashes into abyss

It’s becoming amusing, the usual dark way. Despite all the hopes and dreams of stimulus-addicted markets, Chinese property is crashing into a bottomless pit. The latest sales update is -58% year on year and clearly below 2020 when the entire economy was shut: Why has no stimulus worked to turn this around? Counterparty risk is


Evergrande returns to crash China property again

Evergrande is the bottomless pit of ponzi-finance: Lenders to a property services unit of China Evergrande Group have claimed more than $2bn of its cash, dealing a blow to international investors in the heavily indebted real estate developer who were hoping to recoup some of their losses through the subsidiary. The claim stands to hit


Pull up, terrain! Chinese hard landing dead ahead

It’s fixed! China’s cabinet pledged stronger monetary policy support for the economy while cautioning against flooding the market with liquidity, state broadcaster CCTV reported late Monday. In a State Council meeting chaired by Premier Li Keqiang, the cabinet called for adoption of monetary policy tools to sustain credit expansion at a stable pace. The authorities


Why a China hard landing is the biggest risk for 2022

While markets are suddenly all-in on the Xi Jinping “put” for stock prices, it pays to keep sharp eye on what’s happening in the actual economy. The converging three factors behind the increasingly bearish Chinese outlook are still getting worse, not better. The first is the property crash which shows no change other than getting


Chinese property crash keeps on keeping on

The crazed Chinese stock rebound of the past few days is typical not of recovery but bear markets. Moreover, although property equity has surged, junk dollar debt hasn’t moved at all: Here’s the buzz: Chinese property developers rallied for a second straight day on Thursday, with many homebuilders skyrocketing by more than 40%, after the


Why the yuan must fall

Credit Suisse with a note assessing CNY risks. I am more bearish than this. China’s “impossible trinity” is going to come under intense pressure.  — Although China’s technology clampdown and East-West tensions amid the war in Ukraine are driving sentiment in Chinese markets, we think the main shock to the growth outlook is the recent


China and COVID zero

A good primer from JPM. — Recent spike in new cases China is facing the most challenging moment since 2Q20. The number of COVID-19 cases spiked to thousands per day and expanded to multiple provinces. On March 12, 13 and 14, reported new cases hit 1938, 1437 and 3602, respectively, the highest since March 2020.


More on the Chinese economic rescue to nowhere

Pantheon has it right. In my view, China is going into a nasty recession in H2, 2022. — Japanese exports recovered in February, but this was mainly the unwinding of seasonal distortions. The underlying momentum seems to be stalling, and the outlook has dimmed, thanks to fresh Covid outbreaks in China and Russia’s war against