China Official PMIs (Aug.)

The latest surveys suggest that China’s economy contracted last month as virus disruptions weighed heavily on services activity. Industry also continued to come off the boil as supply chain bottlenecks worsened and demand softened.
Julian Evans-Pritchard Senior China Economist
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China Data Response

China Trade (Nov.)

Exports and imports beat expectations last month thanks to stronger demand and easing semiconductor shortages. In the near-term, the emergence of the Omicron variant is likely to support demand for China’s exports. But its impact further ahead is still uncertain. Meanwhile, we doubt the latest uptick in imports is the start of a sustained rebound given that property construction looks set to weaken further.

7 December 2021

China Economics Update

RRR cut today, rate cuts tomorrow?

The People’s Bank (PBOC) has just announced a cut to the required reserve ratio (RRR) for most banks, shortly after Premier Li and the Politburo each separately hinted at an increase in policy support. There is already evidence of fiscal easing, and we expect policy rate cuts from the PBOC before long. That said, there still appears to be little appetite at the central bank for a sharp rebound in credit growth, and we’re seeing an opening of the fiscal taps, not a flood. This easing will cushion but not stop growth from slowing. Drop-In: China trade and the commodities demand outlook 08:00 GMT/16:00 HKT, Tuesday 7th December  

6 December 2021

China Economics Weekly

Year-end policy bash to strike a more dovish tone

The upcoming Central Economic Work Conference in Beijing is likely to signal that policy is turning more supportive. But loosening will be measured, and growth over coming quarters will still slow.

3 December 2021

More from Julian Evans-Pritchard

China Economics Weekly

Property comedown, vaccine setback

The macro backdrop behind Evergrande’s latest profit warning is a rapidly cooling property market. Home sales have fallen below 2019 levels in recent weeks, with the prop to demand from excess household savings built up earlier in the pandemic fading. Meanwhile, China’s reluctance to embrace foreign vaccines that would aid its fight against COVID-19 was on show this week.

27 August 2021

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.

24 August 2021

China Economics Weekly

Growth jitters, tech woes, Huarong lifeline

There was plenty for China watchers to digest during the past week. Weak data for July added to growth fears, with virus disruptions and tighter credit conditions meaning that worse is still to come. Meanwhile, a flurry of regulatory action and signs of a mounting campaign to reduce inequality further clouded the outlook for China’s big tech firms, and productivity growth more generally. On a more positive note, officials made some headway in defusing financial risks.

20 August 2021
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