Official PMIs

The latest survey data suggest that economic growth accelerated in June thanks to a faster recovery in manufacturing and services, alongside continued strength in construction activity. The recovery should remain robust in the coming months as strong infrastructure spending offsets external weakness.
Julian Evans-Pritchard Senior China Economist
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China Activity Monitor

Starting 2022 on the back foot

Our China Activity Proxy (CAP) suggests that China’s economy was still struggling to regain momentum at the end of last year amid troubles in the property sector and recurrent COVID outbreaks which continue to depress service sector activity. We think these headwinds will continue to hold back activity during the first half of this year.

24 January 2022

China Economics Weekly

Some relief for property developers

This week’s cut to policy rates is one of a succession of recent moves designed to stabilize residential property sales. Developers have also been given a little more breathing room in terms of their access to financing. These steps may not feed into a recovery in project starts, given the poor structural outlook for property demand. But they improve the immediate outlook for many developers. Meanwhile, Tianjin’s Omicron outbreak appears to be under control and COVID cases nationally have dropped to a two-month low. That appears to be encouraging slightly more people to make the trip home for Lunar New Year than a year ago. We’ll be discussing our expectations for policy, zero-COVID and the economy on Thursday (08:00 GMT/16:00 HKT) in an online briefing timed to coincide with publication of our next Outlook report. Please register here to join us and let us know in advance of any questions you’d like us to address.  

21 January 2022

China Economics Update

Deposit rates may be next PBOC target

Today’s reductions to both the one-year and five-year Loan Prime Rates (LPR) continue the PBOC’s efforts to push down borrowing costs. We expect additional easing to follow in the coming months, including measures to push down deposit rates. But policymakers still appear reluctant to engineer a sharp pick-up in credit growth.

20 January 2022

More from Julian Evans-Pritchard

China Data Response

China Activity & Spending (May)

Headline growth on all the key indicators dropped back last month. But after adjusting for base effects the picture was more mixed, with investment slowing, industrial output growth holding steady and retail sales accelerating. While there is still scope for a further recovery in consumption, we think investment and exports are set to cool over the coming months.

16 June 2021

China Economics Weekly

US-China rivalry: industrial policy, vaccine diplomacy

The US Senate took a leaf out of China’s industrial policy playbook this week by passing USICA, a bill that earmarks $190bn in federal funding for strategic sectors and bears striking similarities with Beijing’s controversial Made in China 2025 plan. But despite some overlap, China’s industrial policies clearly remain far broader in scope and run a much greater risk of hindering rather than helping productivity growth. Another burgeoning area of US-China competition is vaccine diplomacy. Here China has the clear lead, at least in terms of the quantity of vaccine exports. And the ongoing surge in domestic production and vaccination rates means that China could soon flood the world with doses on a far larger scale than other countries, including the US.

11 June 2021

China Data Response

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.

10 June 2021
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