Past the worst but recovery to underwhelm

After the deepest downturn since the Cultural Revolution in Q1, China’s economy will return to growth this quarter. But with labour market strains holding back domestic demand and external headwinds intensifying, output is still set to contract this year and remain below the pre-virus path well into 2021.
Mark Williams Chief Asia Economist
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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

China Data Response

China Caixin Manufacturing PMI (Nov.)

The Caixin manufacturing index published today slipped under 50 last month on the back of softer domestic demand. This contrasts with the official survey released yesterday. Taken together, the surveys still suggest that industrial output rebounded in November as power shortages abated. And they also point to easing factory-gate price pressures. Drop-In: Why is Asia sitting out the global inflation surge? 09:00 GMT/17:00 HKT, Thursday 2nd December https://event.on24.com/wcc/r/3546145/A9D34EF592141BEFCAC819ADB40359D5?partnerref=report

1 December 2021

China Data Response

China Official PMIs (Nov.)

The official PMIs suggest that industrial activity rebounded this month thanks to easing disruptions from power shortages while a renewed virus flare-up held back the recovery in services. And while we know little about its transmissibility and severity, the new Omicron variant could hold back a further economic recovery. On a more positive note, the surveys point to easing price pressures.

30 November 2021

More from Mark Williams

China Economics Weekly

PBOC’s turn to target currency manipulators

After regulators last week pledged to root speculators out from the domestic commodity market, this week it was the turn of the People’s Bank to tackle manipulation in the currency market, which it abhors. We suspect though that, as with commodity prices, it will be fundamental forces rather than these campaigns that cause the renminbi to weaken over coming months.

28 May 2021

China Economics Focus

The implications for China and the world of eCNY

In this Focus we detail what is known about how China’s central bank digital currency (CBDC) will operate, when it will launch, what the People’s Bank is trying to achieve, and whether it will succeed. One conclusion is that the launch of eCNY will do nothing to relax the constraints that have prevented the renminbi being widely adopted in international trade or as a reserve currency. Indeed, we argue that the People’s Bank will have to compel eCNY’s use for it even to take off within China.

27 May 2021

Emerging Asia Economics Update

Taiwan: capacity constraints and global chip supply

Taiwan’s economy is being buffeted by several apparently unconnected shocks – a drought, power outages and an outbreak of COVID-19. But they are all linked to severe capacity shortages resulting from the extraordinary strength of global electronics demand. With export orders still sky-high, domestic capacity constraints and global chip shortages will persist.

21 May 2021
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