Policymaker silence, festival spending, the Ox & GDP

China Economics Weekly

Property downturn deepens, triggering easing

Supply-side disruptions mean there is an unusual amount of uncertainty about China’s recent economic performance. But one thing that’s clear is that the property sector downturn has gathered pace in recent weeks. Policymakers have responded by allowing banks to step up mortgage lending. Other easing measures are likely to follow, including rate cuts. But limits on developer financing are here to stay.

China Data Response

China Consumer & Producer Prices (Sep.)

Producer price inflation reached a new high last month due to the surge in global coal prices. There are few signs that this is feeding through to higher output prices of consumer goods, however. The overall inflation outlook remains benign, with PPI inflation likely to drop back around the turn of the year and CPI inflation set to remain muted for the foreseeable future.

China Data Response

China Bank Lending & Broad Credit (Sep.)

Broad credit growth continued to slide in September and is now at its slowest pace since December 2005. We think credit growth will level off in the coming quarters, as PBOC policy turns more supportive in response to strains in the property sector. But the usual lags mean that tight credit conditions will remain a headwind to economic activity for a while.

China Economics Weekly

Changing views on China, export demand peaking

Emerging Markets Economics Update

China is about to flood EMs with vaccines

By September, China could be in a position to export 340mn vaccines doses each month – more than most regions of the world have administered in total so far. China’s vaccines are less effective than others, but have been found to suppress outbreaks where they have been used if a high enough share of a population is vaccinated. Large-scale exports from China could therefore give a significant boost to the prospects of many EMs now struggling to vaccinate because of a lack of vaccine supply.

Emerging Asia Economics Update

Taiwan: severe capacity constraints but few inflation fears

Taiwan’s economy is struggling with severe capacity constraints but there are few signs in recent data that this is fuelling broad-based wage or price pressure. That’s a stark contrast with the US, and should provide some reassurance to central bankers not just in Taipei but also further afield that economic recoveries, even if strong, won’t necessarily trigger inflation.