China Bank Lending & Broad Credit (May)

Broad credit growth continued to slide in May and is now at its slowest since February last year. Evidence of policy tightening weighing on borrowing is clearest in bank loan growth which, apart from during last year’s lockdown, is at its weakest in nearly two decades. This will become a headwind to the economy in the second half of the year.
Julian Evans-Pritchard Senior China Economist
Continue reading

More from China

China Data Response

China PMIs (Jul.)

The latest surveys suggest that the pace of growth slowed more than expected last month. Supply bottlenecks remain a constraint. But the PMIs suggest demand is cooling too, taking the heat out of price gains and weighing on activity in industry and construction. China slowdown webinar: Join us on Thursday, 5th August for a special webinar assessing the impact of China’s economic slowdown on the global recovery. Neil Shearing will lead a discussion with economists from across our economics and markets services to assess whether investors should brace for fresh volatility with China poised for a structural deceleration. Register here for sessions at 0900 BST/1600 HKT or 1100 ET/1600 BST.

2 August 2021

China Economics Weekly

Delta putting zero-COVID approach under strain

China’s ability to quash COVID flare-ups is being tested again:  the Delta variant outbreak that was identified in Nanjing last week has already spread further within China than any since the first that emerged from Wuhan. But the bigger challenge it poses is to China’s long-term strategy of keeping COVID infections as close to zero as possible.

30 July 2021

China Data Response

Hong Kong GDP (Q2 Preliminary)

Hong Kong’s economy contracted last quarter as exports moderated after an exceptional Q1. The path of output is likely to remain subdued until Hong Kong’s borders reopen.

30 July 2021

More from Julian Evans-Pritchard

Long Run Update

Employment already declining at pace

Revisions to the historic data following the recent census show that China’s population barely grew last year and that employment is already contracting faster than previously understood, having peaked in 2014 rather than 2017. The silver-lining, however, is that the new data suggest that productivity growth has slowed by less and that there is greater scope to counter demographic headwinds by boosting participation rates over the coming decades.

1 July 2021

China Data Response

China Caixin Manufacturing PMI (Jun.)

The Caixin manufacturing index published today dropped back last month and adds to signs from the official PMI released yesterday that momentum in industry is waning. The surveys point to a levelling off in demand and easing of price pressures, even as supply shortages continue to constrain output.

1 July 2021

China Chart Book

No, China isn’t exporting inflation

Some believe that China is adding to global inflationary pressure. The opposite is closer to the truth: the large increase in China’s trade surplus over the past year signals that supply from China has risen far more than demand. Global consumer goods prices are rising in spite of China, not because of it. Admittedly, China’s rapid, investment-intensive recovery has been an important factor in the rise in global commodity prices over the past year – this is the key reason why China’s producer price inflation hit a 12-year high last month. But China’s contribution to the surge in global demand for consumer durables has been relatively small – unlike in many major economies, retail spending on goods in China is not particularly strong. And while dollar prices of goods from China have risen over the past year, these price hikes have generally failed to keep up with the pace of renminbi appreciation. In renminbi terms, export prices have been falling unusually fast.

30 June 2021
↑ Back to top