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China’s “sorpasso”

Our long-run forecasts suggest that China will still be the second largest economy, measured at market exchange rates, in 2050. The most likely scenario is that slowing productivity growth and a shrinking workforce prevent China ever passing the US. But there’s a possibility too that China overtakes around 2030 before dropping behind again as the demographic headwinds to its growth mount.
Mark Williams Chief Asia Economist
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China Chart Book

Domestic weakness frees up ports for exports

The Omicron virus wave in China appears to have eased global shipping bottlenecks rather than worsened them as many had feared. Firms were able to re-route shipments through other ports to avoid disruption in Shanghai. And weaker goods demand domestically freed up port capacity that could be used for export shipments. In the past three months, container throughput for foreign trade has risen at its fastest pace in over a year. There has probably been some movement of vessels from domestic to foreign routes too. Together, the increase in export-directed capacity helps explain why freight rates out of China have fallen sharply. Asia Drop-In (30th June, 09:00 BST/16:00 SGT): Are Asia’s central banks behind the curve? Can the Bank of Japan and People’s Bank of China continue to go against the grain? Find out in our special session on what global monetary tightening looks like in Asia. Register now.  

28 June 2022

China Activity Monitor

CAP: Output to stagnate in 2022 despite latest bounce

Our China Activity Proxy suggests that around half of the drop in output during the recent virus wave reversed in May. This recovery looks to have continued in June. But a lot of damage has already been done and we now doubt that China’s economy will grow at all this year. Asia Drop-In (30th June, 09:00 BST/16:00 SGT): Are Asia’s central banks behind the curve? Can the Bank of Japan and People’s Bank of China continue to go against the grain? Find out in our special session on what global monetary tightening looks like in Asia. Register now.  

22 June 2022

China Economics Weekly

GDP target unattainable, shipping disruption

China’s statistics office is adept at massaging GDP data. But with many of the indicators that feed into GDP showing year-on-year contractions in April and May, even it won’t be able to deliver published growth at the rate the government wants this year. Meanwhile, the latest port throughput data suggest that Shanghai’s lockdown had a much smaller impact on shipping than commonly supposed.

17 June 2022

More from Mark Williams

China Economics Weekly

Changing views on China, export demand peaking

While China’s Communist Party was celebrating its achievements at its official centenary this week, a global survey revealed a sharp decline in popular enthusiasm for economic engagement with China in developed economies. That suggests that if governments in the West push for decoupling, they’ll find the public is receptive.

2 July 2021

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.

17 June 2021

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.

10 June 2021
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