China Economy

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Chinese credit slows even faster

Uh oh. Chinese new yuan loans for September were out last night and the numbers are a little worrying. On the surface they appear to be rebounding with good bank loans of 1.38tr yuan and total social financing of 2.21tr yuan: But the PBOC included local government bonds in the TSF number for the first

2

What is the Chinese stock crash telling us?

The Shanghai Composite is in free fall: This is despite the China National Team going hell for leather on buying. I suspect it is foreign capital fleeing Cold War 2.0. But that’s not all it is because the industrial earnings outlook is also deteriorating: Following still tightening credit down as the falling yuan bites, via

0

Chinese inflation eases

From Capital Economics: • Policymakers are likely to look through the latest pick-up in consumer price inflation and focus instead on evidence of cooling economic momentum, including slower core inflation and weaker factory gate price pressures. • Consumer price inflation rose in September, from 2.3% y/y to 2.5% (both the Bloomberg median and our forecast

5

Another China indicator craters

This time hard data too, via Reuters: China’s car sales fell the most in nearly seven years in September, stoking concerns the world’s biggest auto market could contract for the first time in decades this year amid cooling economic growth and a biting trade war. Vehicle sales slumped by 11.6 percent to 2.39 million units

10

Chinese trade slows

Via Capital Economics: • Exports continued to defy US tariffs last month but imports softened in the face of cooling domestic demand. We expect both to weaken in the coming quarters as economic growth slows in China and among its major trading partners. • Export growth accelerated in September, from 9.8% y/y to 14.5% in

6

Cold War 2.0 craters alternative China PMI

Via Bloomie: The CKGSB Business Conditions Index, compiled by the Cheung Kong Graduate School of Business, dropped to the lowest level in its seven-year history in September as the U.S. and Chinese governments imposed new rounds of tariffs on each other’s exports, escalating the trade war. I don’t usually follow it but the survey appears to have

5

Chinese stimulus ramps up

Via Bloomberg: China’s central bank cut the amount of cash lenders must hold as reserves for the fourth time this year, as policy makers seek to shore up the economy amid a worsening trade war. The People’s Bank of China lowered the required reserve ratio for some lenders by 1 percentage point, effective from Oct.

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Chinese ‘sharp power’ crisis grows as US reveals global “hack”

Via Bloomie today: In 2015, Amazon.com Inc. began quietly evaluating a startup called Elemental Technologies, a potential acquisition to help with a major expansion of its streaming video service, known today as Amazon Prime Video. Based in Portland, Ore., Elemental made software for compressing massive video files and formatting them for different devices. Its technology

18

China outlaws bad economic news as economy slows

I’m pretty sure that Australia’s politico-housing complex (from the corrupt RBA to the Property Council) would agree wholeheartedly with this, via NYT: China has long made it clear that reporting on politics, civil society and sensitive historical events is forbidden. Increasingly, it wants to keep negative news about the economy under control, too. A government

2

China PMIs sink

Via Capital Economics: • The latest PMI readings suggest that growth slowed last month. The breakdown points toward weaker exports, though it’s too soon to know if this is due to US tariffs or simply the result of cooling global growth. Meanwhile, a jump in the construction PMI suggests that fiscal easing may be gaining

1

Trade war rams China PMI

Via China’s National Bureau: In September 2018 , the China Manufacturing Purchasing Managers Index ( PMI ) was 50.8% , down 0.5 percentage points from the previous month . It continued to operate in the boom zone, and the overall manufacturing industry continued to expand, and the growth rate slowed down. In terms of enterprise scale, the PMI of large enterprises is 52.1% , which is the same as last month, and

31

How China steals technology

Via the WSJ: DuPont Co. suspected its onetime partner in China was getting hold of its prized chemical technology, and spent more than a year fighting in arbitration trying to make it stop. Then, 20 investigators from China’s antitrust authority showed up. For four days this past December, they fanned out through DuPont’s Shanghai offices,

2

A hint about the future of Chinese leverage

Via FTAlphaville: This summer Evergrande, the Shenzen- $144bn real-estate goliath, invested $860m in Faraday Future, an electric car maker aiming to take Tesla’s crown. The investment may have been defensive. Evergrande is diversifying its asset base away from its holdings of real estate; the move may be a hint about the future of China’s hyper-leveraged real estate

19

Trump plans “administration wide broadside” on China

Via Axios: The Trump administration is planning to launch a major, “administration-wide,” broadside against China, according to two sources briefed on the sensitive internal discussions. These sources, who weren’t authorized to discuss the plans with the media, told me the effort is expected to launch in the next few weeks. The details: The broadside against China

19

Chinese rents soar as apartments to Mars stand empty

Via Zero Hedge: Beijing has been trying to calm its bubbly real estate market with policies that divert investor funds into China’s rental market. But the policy shift to increase the supply of rental housing has backfired, leaving most middle-class Chinese with a rapid increase in living expenses. The reason: the government’s latest centrally planned

4

China mulls trade war self-harm

The AFR is reporting that China is stumped by trade war or, more to the point, Trumped: “We did get a sense of deep concern about the trade tension with the United States and that we could be in a period of prolonged and protracted trade tensions, and there isn’t all that much that the

8

China unleashes its property monster

China released August property price data over the weekend and the news is boom! Prices rose 1.4% on the month and 7% year on year: Price rises are widespread: It’s now only a handful of top tier cities sitting it out. Those with the most draconian macroprudential measures: Lower tier cities are accelerating: As we saw in

5

Chinese credit eases off the bottom

The PBOC released new yuan loans for August last night the news was Total Social Financing came in at 1.52tr yuan with banks making up 1.123tr of that: Shadow banking made its first positive contribution for four months: Year on year growth was up 2.7% but the three month moving average remains well negative at

8

China is out of trade war responses

Via the WSJ: Chinese leaders are stepping up a charm offensive with U.S. multinationals and dropping earlier threats of retaliation as Beijing changes tack to keep the trade fight with Washington from scaring off foreign investors. Beijing is offering a reassuring message in its outreach to American companies. At a meeting last month, Liu He,

0

Chinese inflation eases

Via Capital Economics: Pork prices jump, shipments to US accelerate despite tariffs • Consumer price inflation picked up last month, as African swine flu led to a jump in pork prices. But with broad price pressures still relatively subdued, it’s still too soon to sound the alarm on inflation. Export growth slowed, though this appears

0

China’s trade surplus falls away

China released August trade numbers over the weekend and it’d good news and bad news for the economic war. Imports rose 20% and exports 9.8.% with the surplus narrowing to $27.9bn: The Chinese trade surplus is trending down though, alas, with the US it hit a new record high at $31.05bn. We might expect this

5

China forex reserves resume falls

Bad news for Aussie realty comes form Capital Economics: The People’s Bank is keeping its FX intervention off its balance sheet • The People’s Bank still appears reluctant to deploy its FX reserves in order to support the renminbi. We suspect that it is leaning on state-owned financial institutions to sell foreign assets in its

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Rise of the angry China

Via The Australian: China’s representative at the Pacific Island Forum in Nauru has stormed out of talks with forum nations after a dispute with host nation leader, President Baron Waqa. The Chinese “dialogue partner” left the closed doors meeting after what was described as a “terse exchange of words” with Mr Waqa. Nauru, which recognises

1

China still slowing…

Via Capital Economics: • The latest survey data suggest that China’s economy continued to come under pressure last month. We expect further weakness ahead despite the shift toward policy easing. • The Caixin manufacturing PMI declined from 50.8 in July to a 14-month low of 50.6 in August. This was weaker than anticipated (both the

1

Caixin China PMI hits 14-month low

The Caixin China General Manufacturing PMI has been released, which has edged down to a 14-month low: August survey data signalled a further improvement in Chinese manufacturing operating conditions. Output continued to expand, and at a quicker pace than in July. However, new orders rose at the slowest rate since May 2017, while export sales

1

China PMI steady

Via China’s NBS: In August , the manufacturing PMI was 51.3% , up 0.1 percentage points from the previous month and unchanged from the annual average. Since the beginning of this year, except for the Spring Festival, the index has been operating within the 51.0% – 52.0% boom period, and the overall manufacturing industry has