China Economics Update Transhipments and weaker RMB are blunting US tariffs China’s share of global exports has increased over the past year, despite US tariffs. Renminbi depreciation and the transhipments of goods to the US via neighbouring countries can take much of the... 29th August 2019 · 3 mins read
China Economics Update US tariffs strengthen the case for easing, weaker RMB With President Trump adding yet more US tariffs to the pipeline, the impact on China’s economy is starting to add up. With the drag on GDP growth set to rise to nearly one percentage point before long... 26th August 2019 · 3 mins read
China Economics Update China focuses its fire in retaliation The tariffs announced today by China’s government are a departure from previous rounds of retaliation: they focus almost entirely on further raising tariffs on products that have already been targeted... 23rd August 2019 · 3 mins read
China Economics Update Loan Prime Rate (Aug.) The newly revamped Loan Prime Rate (LPR), intended to replace the traditional benchmark lending rate as the reference point against which banks price loans, was launched today. The one-year LPR was... 20th August 2019 · 2 mins read
China Economics Update Interest rate reform with a side of policy easing A long-awaited shake-up of how China’s banks price loans should in time give policymakers much finer control of bank lending rates and could open the door to a quasi-rate cut as soon as tomorrow. But... 19th August 2019 · 4 mins read
China Economics Update Protests to push Hong Kong into a recession Disruptions from the ongoing protests look set to pull down Hong Kong’s GDP growth to its lowest since the global financial crisis this quarter and there is a growing risk of an even worse outcome if... 14th August 2019 · 4 mins read
China Economics Update FX manipulator label to further strain bilateral relations The US decision to label China a currency manipulator is on shaky economic grounds since, if anything, the renminbi would be even weaker than it is now without policy support. But the move is another... 6th August 2019 · 3 mins read
China Economics Update PBOC weaponizes the renminbi The PBOC has allowed the renminbi to fall to its weakest level in a decade in response to trade tensions. It appears to have decided that, given the increasingly dim prospects of a trade deal with the... 5th August 2019 · 3 mins read
China Economics Update The trade war is about to hit China’s surplus The trade war between the US and China has made barely any difference to the scale of their bilateral trade imbalance, which was President Trump’s original concern. But China is reaching the limits of... 2nd August 2019 · 4 mins read
China Economics Update PBOC rate cuts appear imminent The People’s Bank has pushed down overnight interbank rates to multi-year lows. This is partly a response to market jitters following the Baoshang Bank takeover and may partially reverse in the coming... 25th June 2019 · 2 mins read
China Economics Update What do the protests mean for Hong Kong’s economy? The immediate economic impact of the protests in Hong Kong will be very small. But continued erosion of Hong Kong’s autonomy, which is threatened by the proposed extradition law, would undermine a key... 12th June 2019 · 1 min read
China Economics Update Preparing for a long trade war A deal to end the US-China trade dispute appears further away than ever. We now expect all US goods imports from China to be subject to a 25% tariff by early next year. China is likely to respond with... 6th June 2019 · 1 min read
Global Markets Update PBOC still wary of CNY weakness despite tariff threat The 2% fall in the renminbi since the US-China trade war flared up again reflects market pressure more than a deliberate policy choice – Chinese policymakers have actually been trying to slow its... 16th May 2019 · 1 min read
China Economics Update Three reasons for China’s modest retaliation We think the small scale of China’s planned tariff hikes reflects three factors – a desire not to escalate tensions, the limited scope for further tariffs and China’s ability to use other tools to... 14th May 2019 · 1 min read
China Economics Update Four implications of the re-escalation in trade tensions President Trump has threatened an imminent expansion of tariffs against China. We expect this to result in stronger headwinds to growth, more policy easing, a weaker renminbi and a stock market rout. 6th May 2019 · 1 min read
China Economics Update Targeted RRR cut to shore up lending growth Bank lending to small firms should receive a sizeable boost from the planned reduction in the required reserve ratio for many rural banks, pushing up overall bank loan growth in the process. While... 6th May 2019 · 1 min read
