China

China Activity Monitor

China Activity Monitor

Service sector recovery remains lacklustre

Our China Activity Proxy (CAP) shows that growth ticked up last month as energy shortages eased and the service sector continued to recover from virus disruptions over the summer. But the rebound remains lacklustre, with output still well below June’s peak. And while the outlook for home sales and exports has brightened in recent weeks, cooling construction activity still looks set to weigh on growth next year.

24 November 2021

China Activity Monitor

Services recovering but outlook still gloomy

Our China Activity Proxy (CAP) shows that output rebounded last month as the disruption to the service sector from virus outbreaks eased. But this wasn’t enough to prevent a sharp contraction last quarter. And even if services activity holds up better moving forward, the headwinds facing construction and industry mean that growth will be lacklustre over the coming year.

25 October 2021

China Activity Monitor

Delta blow to give way to property downturn

Our China Activity Proxy (CAP) suggests that economic output dropped back sharply in August. The big hit to services activity from efforts to contain the Delta variant should mostly reverse this month. But the downturn in the property sector has further to run.

27 September 2021
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China Activity Monitor

Delta speed bump not the only drag

Our China Activity Proxy (CAP) suggests that output dropped back further in July. This shouldn’t be dismissed as a temporary setback due to the recent virus outbreak. The main drag last month came from industry and construction, where the key headwinds are tight credit conditions and supply bottlenecks.

China Activity Monitor

Downhill from here?

Our China Activity Proxy (CAP) suggests that growth accelerated in q/q terms last quarter but that output edged down in June on the back of softer industrial and construction activity. We think China’s COVID-19 rebound has reached its limits and that output will drop back further during the rest of this year.

China Activity Monitor

Still strong but probably close to a cyclical peak

Our China Activity Proxy (CAP) suggests that output remained strong in May but didn’t rise much further,  with slowing credit growth weighing on construction and China’s pandemic-induced export boom showing signs of peaking. We think output will, at best, tread water during the second half of this year.

China Activity Monitor

Surprising on the upside

Our China Activity Proxy (CAP) suggests that output rose further above its pre-virus trend last month thanks to the recent rebound in services and continued strength in industry and construction. We still think that activity will level off over the rest of the year as the export boom unwinds and a tighter policy stance weighs on investment. But with demand extremely strong, the risks to our annual growth forecast lie to the upside.

China Activity Monitor

A stronger end to a weaker quarter

Our China Activity Proxy (CAP) suggests that growth picked up last month as virus containment efforts were lifted. But this wasn’t enough to prevent a marked slowdown in q/q growth last quarter. With the export boom running out of road and the prop from stimulus in the rear-view mirror, we think China’s economic rebound will continue to level off in the coming quarters.

26 April 2021
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