Filtered by Subscriptions: China Economics Use setting China Economics
President Trump’s latest flurry of tariffs implies that the US effective tariff rate will rise to about 17%, from 2.3% last year. That is a little higher than we assumed and so presents modest downside risks to our forecast for global GDP growth and a …
1st August 2025
Domestic weakness weighing on growth This report was first published on Thursday 31 st July, covering the official PMIs. We added commentary on the Caixin manufacturing PMI on Friday 1st August. The PMIs suggest that China’s economy lost some momentum in …
31st July 2025
The readout from today’s Politburo meeting strikes a less dovish tone compared with the previous meeting on economic affairs back in April and stops short of committing to any additional monetary or fiscal support. It did leave the door open to more …
30th July 2025
We spent last week in Beijing and Shanghai visiting clients. The mood in China was not as downbeat as a year ago and our sense is that many companies and residents have adapted to the new normal of slower growth. President Trump was widely perceived as …
29th July 2025
While China’s June trade data showed a pick-up in exports of rare earth elements (REEs), shipments remain well below pre-Liberation Day levels. A further warming of relations with the US could lead to more approvals being granted in the near-term, but …
23rd July 2025
US tariffs appear to have given renewed impetus to Chinese producers’ efforts to export to emerging markets, resulting in a widening trade surplus with the EM world in the first half of the year. But this is going to face growing headwinds, given the …
22nd July 2025
This week’s Central Urban Work Conference didn’t deliver the revival of the shantytown redevelopment scheme that helped stabilise China’s housing market a decade ago and that some had been hoping for. Policymakers appear to have concluded that any …
18th July 2025
This page has been updated with additional analysis since first publication. Growth is weaker than official figures suggest Official GDP data came in a touch weaker in Q2. But the figures still overstate the strength of growth by around 1.5%-pts. And t …
15th July 2025
Auto exporters in China have adapted to the EU’s tariffs on EVs by lowering export prices and focusing on vehicles that are not subject to tariffs. Even if trade restrictions were to remain in place, the extent of China’s cost advantage means that …
10th July 2025
Note: This report was first published on 8th July, when the scheme had yet to be confirmed. But the details match what was ultimately announced by the authorities on 28th July. The Chinese authorities are seemingly on the cusp of roll ing out nationwide …
8th July 2025
Vietnam has had one of the weakest hands to play in its trade negotiations with the US. If it is confirmed that it has agreed to a 20% tariff, this isn’t a template that other countries will feel they have to follow. Instead, the key lesson for other …
2nd July 2025
PBOC turns less dovish despite deflation concerns One might have thought that fading concern about the exchange rate and growing concern about deflation would provide the perfect moment for the PBOC to step up monetary easing. But the Bank’s latest …
China is moving toward ending its decades-old system of “presales” for newly-built residential property. This would reduce risks for homebuyers. But hopes that the change would provide a material boost to home prices are likely to prove misplaced. …
1st July 2025
Momentum rebounds, but headwinds persist This report was first published on Monday 30th June, covering the official PMIs. We added commentary on the Caixin manufacturing PMI on Tuesday 1st July and Caixin services and composite PMIs on Thursday 3 rd …
30th June 2025
The overnight strikes by Israel on Iran mark a major escalation in the conflict in the region and, with the oil market tighter than it was a few months ago, the risks to oil prices look more balanced than we’d previously thought (rather than skewed to the …
13th June 2025
A deal with China is done, according to President Trump, but its scope seems to be limited to easing some recent non-tariff restrictions, including China’s rare earth export controls. The wider trade and economic issues that were supposed to be the focus …
11th June 2025
Domestic weakness weighing on growth This report was first published on Monday 2 nd June, covering the official PMIs . We added commentary on the Caixin manufacturing PMI on Tuesday 3 rd June and Caixin services and composite PMIs on Thursday 5 th June. …
2nd June 2025
Update: On 31st July, the Trump Administration announced that transshipped goods will be subject to a 40% tariff instead of the regular reciprocal rates and that this will stack on top of any other tariffs applicable to the true country of origin. In …
29th May 2025
In this Update, we answer several key questions about how the US Court of International Trade (CIT) tariff ruling might affect the US and other economies. The outlook may now rest on the decision of the Republican-stacked Supreme Court. The upside risks …
While sales volumes have picked up since the start of last year, we expect residential property prices in Hong Kong to continue to fall until Fed cuts resume. Even then, given the structural headwinds facing the economy, property prices are likely to …
14th May 2025
The recent climbdown has left the effective US tariff rate on the rest of the world at around 15% as opposed to the 27% which was threatened at the height of this year’s trade war. While this is still the highest since the 1930s, it is unlikely to cause a …
13th May 2025
Global Trade Stress Monitor …
The US and China have each suspended for 90 days all but 10% of their Liberation Day tariffs and cancelled other retaliatory tariffs. This is a substantial de-escalation. However, the US still has much higher tariffs on China than on other countries and …
12th May 2025
Factories are slashing prices of consumer goods Core inflation has recovered somewhat in recent months, even as headline inflation has slipped back into negative territory. But the outlook for underlying inflation is still deteriorating, with the producer …
11th May 2025
Chinese policymakers will probably find ways to keep the published unemployment rate close to their “around 5.5%” target for this year. But this may mask broader weakness in the labour market as a downturn in exports reduces new hiring, increases …
7th May 2025
Chinese policymakers have announced a raft of new monetary easing measures. These will help to shore up growth at the margin. But any boost to credit demand will be modest and today’s moves are no substitute for an expansion in fiscal support. China’s …
This report was first published on Wednesday 30 th April, covering the official PMIs and Caixin manufacturing PMI. We added commentary on the Caixin services and composite PMIs on Tuesday 6 th May. Impact of tariffs starting to show up in survey data The …
30th April 2025
Retail sales in China are more than ten times larger than the country’s exports to the US. As such, domestic goods consumption would only need to rise by a few percent over the next couple of years to fully offset the hit from US tariffs. But this would …
22nd April 2025
President Trump’s trade war has created material downside risks for the global economy. Our forecasts assume that tariffs on most countries outside China will stay at 10% and retaliation by other governments will be moderate. In this scenario, global GDP …
10th April 2025
Unless they are rolled back, the latest US tariff hikes mean that China’s shipments to the US will more than halve over the coming years, even assuming the renminbi weakens to 8.00/$. This will reduce China’s GDP by somewhere between 1.0-1.5% depending on …
9th April 2025
China has responded to US tariffs with an additional 34% tariff on all US goods, the most sweeping it has ever imposed. Some US companies have also been added to China’s unreliable entities list and export controls have been expanded. This is an …
4th April 2025
We hosted two online Drop-In sessions on 3 rd April to discuss the fallout from President Trump’s Liberation Day tariff announcement. (See a recording here .) This Update contains answers to some of the questions that we received and links to several more …
3rd April 2025
We’d already assumed substantial US tariffs on China in our forecasts. But the latest hikes take them even higher than we had anticipated. The economic hit to China will range between 0.5-1.0% of GDP depending on what happens to the exchange rate. China …
Whilst buying gold may reduce central banks’ overall exposure to the dollar, we don’t think that the surge in central bank gold demand reflects a severe loss of confidence in the greenback. Instead, the perception of gold itself as a safe haven is …
31st March 2025
The US would have to exert a lot of pressure to coerce most major countries into putting large tariffs on goods from China . Curtailing trade with China would have an economic cost and even countries that have closer economic ties with the US would still …
In this Update, we answer several key questions about how the announced 25% tariffs on US imports of autos and parts might affect the global economy and the US itself. Mexico, Slovakia and Korea are most exposed with up to 1.6% of GDP at risk. But the …
27th March 2025
Deflation has reared its head again in China, underscoring the problem of persistent supply and demand imbalances. The limited extra support for consumption outlined at the National People’s Congress and in the new “Special Action Plan” for consumption …
18th March 2025
China’s government has launched a new “Special Action Plan” to support consumption. Talk of prioritising consumption is encouraging on paper. But the leadership has been talking about this since a Politburo meeting in July. The latest plan doesn’t include …
17th March 2025
The events of the past two weeks have called into question whether the US is severing ties not just with adversaries such as China but also allies, including Canada, Mexico and the European Union. This would radically alter the shape of the fractured …
4th March 2025
With US tariffs now escalating, the key question is whether the People’s Bank (PBOC) will allow the exchange rate to adjust in response. We think it ultimately will, just as it did during the first trade war. But if we’re wrong and the PBOC attempts to …
28th February 2025
President Trump’s attempts to reset relations with Russia have led some to suggest that he may be attempting to break apart the Sino-Russian alliance as Nixon did in the early 1970s (although in Nixon’s case, by reaching out to China). But while this may …
27th February 2025
Policy support is helping developers secure financing and should boost their sales this year. This will allow them to intensify work on existing projects. But it won’t prevent homebuilding activity from declining further over the coming years as the …
Note: This report was first published on 25th February following the Trump Administration's imposition of 20% fentanyl tariffs on China. As of 29th July, US tariffs on Chinese goods are now at 40%. President Trump has signalled that he is open to the …
25th February 2025
China is among a minority of countries that apply lower tariff rates on the US than vice versa, so it is not as obviously exposed to reciprocal tariffs as many others. But President Trump’s latest announcement underscores just how serious he is about …
14th February 2025
China added five critical minerals to its export control list last week but stopped short of banning their sale. The move was intended as a warning to the Trump administration and to increase China’s leverage during future negotiations. If the US …
12th February 2025
The end of the de minimis tariff exemption for US imports of low-value goods from China will be a major blow to Chinese e-commerce giants like Temu and Shein. They’re likely to lose market share to foreign competitors like Amazon. But unless tariffs …
11th February 2025
Rise in inflation likely temporary Headline CPI inflation rose to a five-month high last month, driven by the lagged effect of stronger demand last quarter on the back of government efforts to boost consumption. But with the boost from stimulus likely to …
10th February 2025
The additional 10% tariff that Donald Trump has applied on Chinese goods will have a relatively modest impact on China’s economy, especially if the PBOC allows the renminbi to adjust. But this is likely just the first round in a protracted trade war with …
3rd February 2025
DeepSeek’s success in developing AI models that rival those of US tech-giants has rattled US markets. While this does suggest that catching up to the technological frontier in AI may be easier than many expected, it is not a sign that China is overtaking …
30th January 2025
The raft of export restrictions introduced earlier this month are the latest escalation in China’s shift to a more assertive export control regime. The use of such non-tariff measures is likely to intensify over the coming years, if as we anticipate, …
27th January 2025
