China Economy

3

Chinese property keeps on slowing

Via Caijing: Continued real estate regulation, the market to bring the impact of the overlay is still fermented. National Bureau of Statistics released on November 14 data show that in the first 10 months of this year, the national real estate development investment, sales, funds in place indicators such as the growth rate continued to

1

Chinese growth continues steady slowdown

It’s the slow slowing for China. October data came in pretty much on expectations with industrial production at 6.2%, fixed asset investment 7.3% and retail sales 10%: Real estate sales growth continues to fall at a good clip year to date: They are now falling year on year at  -6.4%. Floor space under construction is

1

Chinese credit keeps on slowing

Chinese October credit is out and the slowdown continues. New yuan loans came in at 1.04tr yuan with banks making up 663.2bn of that: The shadow banking share remains around one third: October is usually a slower month and was up 16% year on year but the three month moving average for same is down

2

ECB does the big China bust

Via the ECB comes a new report into what Chinese rebalancing means for Europe and the global economy: Although vulnerabilities have grown, China retains policy space to cushion against potential adverse shocks. China has high national savings, large foreign exchange reserves and a current account surplus, which help to shield it against an external funding crisis.

0

Chinese inflation begins to spread

Chinese inflation for October and out and has begun the spread. The CPI came in at 1.9% and PPI at 6.9%: Producer inflation has begun to spread from raw materials into the manufacturing production chain with chemicals. rubbers, papers and textiles warming up: The consumer is till OK but take pork out and there’s some

3

Chinese trade data comes back to earth

Chinese trade data for October is out and began to come back to earth with exports 6.9% year on year and imports 17.2%. The trade surplus rose to $38.2bn: More interesting was the iron ore imports data which crashed to 79.49mt, the lowest this year: Dalian rallied on the data after doing the same the

4

Chinese interest rates keep ripping higher

The short end of the Chinese bond curve is the latest to break higher: The 5/10 year curve remains inverted as well. All rates are now approaching highs associated with economic tops. Needless to say, this time is no different: Via, Bloomberg, China Corporate Bond Investors’ Luck May Be About to Run Out: “It’s very likely

9

Welcome to China’s amazing NOBOR

Via Clyde Russell: In theory, the touted billions to be spent on ports, roads, railways, power plants and so on will serve as an ongoing stimulus for commodities such as iron ore, coal, copper, crude oil and a host of minor metals with industrial applications. If there was a flood of projects being financed and

1

China Caixin PMI yawns

Caixin PMI for October : October survey data signalled a further marginal improvement in manufacturing operating conditions across China. While new orders rose at a slightly quicker pace, production increased at the softest rate for four months. At the same time, companies continued to shed staff amid reports of company-downsizing policies and efforts to raise

1

Chinese PMIs hit Winter shut downs

China’s October PMIs are out and slowing, as expected. The headline manufacturing PMI was 51.6 vs 52 expected. All internals eased as well: The services PMI likewise eased to 54.3: Construction is slowing though still strong: Construction business activity index was 58.5% , down 2.6 percentage points from the previous month , is still in a higher economic range, the construction

7

China’s Congress ends, interest rates rocket, Pettis warns

If you needed a more elegant demonstration that everybody was waiting for the Chinese National Congress before seeing China slow then you need look no further than the bond market yesterday, via Reuters: Top policymakers at China’sCommunist Party Congress last week said that efforts to contain excessive risk-taking in the financial system will continue next

3

Chinese house prices slow some more

Chinese house prices are out and slowed some more in September, up just 0.2% month on month and 6.3% year on year: In terms of cities, everything is now slowing with top tiers set to go negative year on year, second not far behind and lower tiers rolling: The number of cities with flat or

3

Chinese capital controls here to stay

Via Goldman: Our usual preferred gauge of underlying flows suggests a total net FX outflow of US$7bn in Sep (US$2.4bn from net FX demand onshore plus US$4.9bn in FX outflow routed through the CNH market). According to the SAFE dataset on “onshore FX settlement”, net CNY demand by non-banks onshore in Sep was -US$2.4bn (vs. +US$3.1bn in Aug).

5

China mulls its own “Minksy moment”

Via the FT: “When there are too many pro-cyclical factors in an economy, cyclical fluctuations will be amplified,” Zhou Xiaochuan, governor of the People’s Bank of China, said at a meeting on the sidelines of the Communist party gathering in Beijing. “If we are too optimistic when things go smoothly, tensions build up, which could lead

11

Chinese growth is hitting the skids

Chinese growth numbers are out for the September QTR and it was all bang on target with GDP at 6.8%: However, something much more interesting is happening under the bonnet. The September month partials were mixed but weak in the construction economy with industrial production at 6.6%, retail sales at 10.3% but fixed asset investment

8

Xi Jinping just warned Australia on growth (for now)

From Karen Moley today: You had to listen closely, but Chinese President Xi Jinping provided two important clues as to the economic policies he will pursue in his second five-year term in the course of his epic three-and-a-half hour opening address to the Communist Party congress. The first clue was provided by what he didn’t say. Xi made no mention

1

UBS rings bell on Chinese property boom

Not news to MB readers but some nice texture from UBS: Buying intention & activity rose further on price optimism Both home buying activity and intensions gained momentum. Our latest survey showed that one in six respondents had purchased a home in the past 6 months, a notable increase from the same period a year

29

Chinese power is approaching its zenith

Via The Guardian yesterday: Australia does not “fully know” how an increasingly assertive China will use its power, Penny Wong has warned in a speech pledging to safeguard Australia’s sovereignty while accepting China as a global player. The defence and security communities must be “on the lookout for threats” as government and business expand the trade relationship

4

Chinese credit still slowing

Chinese credit data for September was out on Saturday. Total Social Financing came in at 1.82tr yuan, banks made up 1.27tr yuan of that: Shadow banking accounted for 30%, consistent with the recent trend of slowing: Year on year growth in new yuan loans was a meager 5.8% but the three month moving average is

2

Chinese inflation remains crazy narrow

Chinese inflation is out and the CPI is still soft at 1.6% while the PPI is wildly overheated at 6.9%: The producer inflation pulse is slightly more broad than earlier in the stimulus boomlet but not much: It’s moved from steel and energy to metals and energy. Chinese activity is clearly not great outside of

6

What to expect from China post-Congress

Via Goldman: Interview with David Shambaugh David Shambaugh is Gaston Sigur Professor of Asian Studies, Political Science and International Affairs, and the founding director of the China Policy Program at the George Washington University. In addition to his work in academia, he has served on the staff of the US National Security Council East Asia

16

China’s shocking future for Australia

China is going to slow next year. We know it from the data already. But we’re also getting it from the politics, via PIMCO: After the radical anti-corruption purge of the last five years, the upcoming Party Congress is unlikely to be the typical midterm power reshuffle, as seen in 2007. The consensus is that

0

China reaffirms credit tightening

Via Reuters: The plan by China’s central bank to cut the amount of cash reserves that some banks must hold will not alter policymakers’ resolve to lower financial risk, the official China Daily reported an official saying on Monday. The People’s Bank of China said at the end of September that it would cut the

2

Caixin China services PMI goes splat

The Caixin China services PMi is out and splat: The Caixin China Composite PMI™ data (which covers both manufacturing and services) signalled a weaker expansion in total Chinese business activity at the end of the third quarter. Notably, the Composite Output Index fell from 52.4 in August to a three-month low of 51.4 in September.

18

China’s commercial property bid evaporates

Wish me luck as I wave you goodbye, via AFR: Chinese investors have paused all investments overseas until this year’s Chinese National Party Congress in November is over, a roadshow by Colliers International, the Commonwealth Bank of Australia and PwC has revealed. The trio, which toured China in September, said investors were reluctant to deploy

2

China signals that the yuan is gunna fall again

From Reuters: China’s central bank on Saturday cut the amount of cash that some banks must hold as reserves for the first time since February 2016 in a bid to encourage more lending to struggling smaller firms and energize its lacklustre private sector. The People’s Bank of China (PBOC) said on its website that it

3

China PMIs send mixed messages

China’s PMIs were all out on the weekend and sent very mixed messages. The official PMI boomed with everything at the fastest pace in five years: Aug-16 50.4 52.6 51.3 49.7 Sep-16 50.4 52.8 50.9 50.1 Oct-16 51.2 53.3 52.8 49.2 Nov-16 51.7 53.9 53.2 50.3 Dec-16 51.4 53.3 53.2 50.1 Jan-17 51.3 53.1 52.8