Activity & Spending (Jul.)

The activity and spending data for July all came in below consensus expectations despite surprisingly strong external demand. This highlights the continued strong headwinds to domestic demand from slower credit growth.
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China Economics Weekly

Policy outlook, new forecasts, property tax

Ahead of the publication of our quarterly China Economics Outlook next week, we consider how Evergrande's woes, power cuts and supply shortages have shifted prospects for the economy. Our answer: surprisingly little, but perhaps only because only our expectations for 2022 were already fairly gloomy. There has been growing talk this week that the People’s Bank won’t lower policy rates in the coming months. We’re not convinced.

22 October 2021

China Economics Update

Pullback in easing expectations overdone

The Loan Prime Rate (LPR) remained on hold for the 18th straight month today. And investors have recently pared back their expectations for monetary easing. But given growing economic strains, especially in the property sector, we still think the PBOC will cut policy rates before long.

20 October 2021

China Data Response

China GDP (Q3), Activity & Spending (Sep.)

In q/q terms, official GDP growth slowed to a crawl last quarter. And our China Activity Proxy points to a sharp contraction. Although some of the recent weakness in services is now reversing, industry and construction appear on the cusp of a deeper downturn.

18 October 2021

More from Capital Economics Economist

China Economics Weekly

Inflation fears overdone, more policy tweaks

Chinese consumers appear to have become more worried about inflation recently. But these concerns may reflect a broader sense of unease among households in response to a weakening labour market rather than about inflation itself, which seems likely to remain fairly contained. Policymakers, for their part, still seem more concerned about slowing growth than about inflation risks and have continued to expand their efforts to lower financing costs and boost lending.

7 September 2018

Japan Economics Weekly

Abe delaying retirement, Q2 growth strong

Prime Minister Abe is set to remain in power for another three years following the LDP leadership elections. One of the few substantive reform proposals he has put forward is an increase in the retirement age beyond the current 65. While this would reduce pension spending, it is less certain whether it would increase employment among the elderly. And any change wouldn’t be implemented for a couple of more years.

7 September 2018

Australia & New Zealand Data Response

International Trade (Jul.)

It looks as though the contribution to real GDP growth in the third quarter from net exports will be similar to the 0.1 percentage point added in the second quarter. But the near-stagnation in imports in July provides some tentative evidence that domestic demand may have softened.

6 September 2018
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