Our China Activity Proxy (CAP) suggests that seasonally-adjusted, q/q growth in China’s economy has peaked, but growth is expected to remain strong for some time.

China’s loan-fuelled stimulus has returned the economy to rapid growth. The key challenge now is sustaining the rebound without inflating asset price bubbles.

There was no let-up last month in the lending growth that is fuelling China’s stimulus. For now, the Chinese recovery is benefitting the rest of the world through stronger imports. But as commodity...

China’s foreign exchange purchases, and hot inflows into its economy, have steadied. But they are likely to rise in the months ahead, adding to the threat of asset price bubbles next year.