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Factory-gate inflation hits a new record 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 …
14th October 2021
Credit growth at its slowest in 15 years 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 …
13th October 2021
Strong exports ease power rationing concerns September exports beat even our above-consensus expectations. Coupled with separate data showing that electricity consumption held up well last month, this suggests that the hit from power rationing has largely …
Industry softer ahead of power shortages The manufacturing PMIs diverged this month. But the big picture is that industry was coming off the boil even prior to the latest power shortages. On a more upbeat note, the official surveys point to a sharp …
30th September 2021
Delta wave hit bigger than expected The hit to service activity from last month’s virus outbreak was even larger than we, and other forecasters, had anticipated. The rest of the economy held up better, although the headwinds facing the property sector …
15th September 2021
Credit growth at its slowest in 32 months Credit growth dropped in August to its slowest pace since December 2018. With the PBOC now shifting gears to a slightly more supportive stance, credit growth may level off in the coming quarters. But the usual …
10th September 2021
Factory-gate inflation hits a 13-year high Producer price inflation reached its highest since August 2008 last month due to the rally in global commodity prices. But the breakdown suggests that upward pressure on the factory-gate prices of consumer goods …
9th September 2021
Current strength unlikely to last Exports and imports were much stronger than anticipated last month thanks to buoyant demand, even as the data point to some lingering supply shortages. We continue to think shipments will soften in the coming quarters …
7th September 2021
Industry falters amid hits to both supply and demand The Caixin manufacturing index dropped to an 18-month low in August, adding to signs from the official PMI released yesterday that industry is coming off the boil. The surveys point to worsening supply …
1st September 2021
Delta wave hit services hard The latest surveys suggest that China’s economy contracted last month as virus disruptions weighed heavily on services activity. Industry also continued to come off the boil as supply chain bottlenecks worsened and demand …
31st August 2021
Not just about Delta wave disruptions There was a broad-based slowdown in all the key indicators last month. This partly reflects disruptions to consumer activity due to the recent virus flare-up and flooding in central China. But investment spending and …
16th August 2021
The slowdown in credit growth resumes After stabilising in June, broad credit growth resumed its downward trajectory in July and is now at its slowest since February last year. We expect the slowdown and resulting headwind to the economy to continue in …
11th August 2021
Underlying price pressures swamped by pork price slump Rising factory gate prices for electronics products signal that supply chains are still tight but, with both semiconductor imports to China and China’s exports of electronics rising over the past …
9th August 2021
Economy struggling to gain further ground The latest surveys suggest that the pace of growth slowed more than expected last month. Supply bottlenecks remain a constraint. But the PMIs suggest demand is cooling too, taking the heat out of price gains and …
2nd August 2021
Recovery took a leg down in Q2 due to export decline Hong Kong’s economy contracted last quarter as exports moderated after an exceptional Q1. The path of output is likely to remain subdued until Hong Kong’s borders reopen. After soaring 5.4% q/q in Q1, …
30th July 2021
Better than Q1 but growth still subdued China’s GDP growth dropped back in y/y terms last quarter as the base for comparison became less flattering. In q/q terms, output rose at a slightly faster pace than in Q1, when a flare-up in virus cases weighed on …
15th July 2021
Current strength is not sustainable Headline trade growth was stronger than expected last month, partly thanks to an increased supply of semiconductors. But exports remained below their recent peak and we still think shipments will soften in the coming …
13th July 2021
Credit growth flattens Credit growth levelled off in June having previously decelerated to the pre-pandemic pace. We suspect this is a pause rather than an end to the slowdown – today’s RRR cut notwithstanding. Either way, the deceleration over the first …
9th July 2021
Price pressures start to ease After reaching a 12-year high in May, producer price inflation dropped back in June as the rally in global commodity prices faltered. Consumer price inflation declined too, on the back of a sharp drop in pork prices. We think …
More evidence of a slowdown The Caixin manufacturing index published today dropped back last month and adds to signs from the official PMI released yesterday that momentum in industry is waning. The surveys point to a levelling off in demand and easing of …
1st July 2021
Growth slowing, price pressures easing The latest surveys suggest that growth softened this month. A slower improvement in services activity was mostly to blame. But supply shortages also continued to hold back output in the manufacturing sector. On a …
30th June 2021
Consumption a bright spot as momentum elsewhere falters Headline growth on all the key indicators dropped back last month. But after adjusting for base effects the picture was more mixed, with investment slowing, industrial output growth holding steady …
16th June 2021
Credit growth takes another leg down Broad credit growth continued to slide in May and is now at its slowest since February last year. Evidence of policy tightening weighing on borrowing is clearest in bank loan growth which, apart from during last year’s …
10th June 2021
Factory-gate inflation hits twelve-year high Producer price inflation continued to surge and reached its highest level since September 2008 last month, on the back of a further rise in global commodity prices. That said, there are some signs in the data …
9th June 2021
Downhill from here? Headline trade growth remained elevated last month. But trade volumes dropped back in levels terms and, while supply constraints are partly to blame, there are signs that demand may have peaked too. Export growth dropped back from …
7th June 2021
Industry remains strong but supply shortages worsening Unlike the official PMI survey released yesterday, the Caixin manufacturing index published today rose last month. The key takeaway is that while output edged up on the back of still strong demand, …
1st June 2021
Supply shortages continue to stoke price pressures The latest surveys suggest that stronger construction activity nudged up overall growth this month and that supply shortages are pushing up prices even as final demand for manufactured goods appears to be …
31st May 2021
A softer start to Q2 Year-on-year growth on all indicators dropped back last month. This partly reflects a less flattering base for comparison. But current momentum was also a bit softer, especially for retail sales. We think m/m growth will remain modest …
17th May 2021
Credit slowing faster than most anticipated Both bank lending and broad credit dropped off more sharply than most expected in April. Apart from during last year’s lockdown, loan growth hasn’t been this slow in nearly two decades. The net increases of both …
12th May 2021
Factory-gate inflation hits three-year high Producer price inflation was the strongest since October 2017 last month, as upstream price pressures remained significant due to supply constraints. This is feeding through to a rebound in consumer price …
11th May 2021
Trade values remain elevated but fail to gain further ground Headline trade growth picked up last month thanks to favourable base effects. But in seasonally-adjusted terms, exports continued to level off and the rebound in imports stalled. This partly …
7th May 2021
External tailwinds continue to boost recovery Hong Kong’s y/y GDP growth turned positive in Q1 for the first time since Q2 2019. Even after accounting for base effects, the economy expanded impressively thanks to the strength of exports. With the virus …
3rd May 2021
A weaker start to Q2 The latest surveys suggest that growth edged down this month. Supply-side disruptions appear mostly to blame for a slower rise in manufacturing output. But there are also signs of a demand-led slowdown in construction and services. …
30th April 2021
Flattering base effects mask sharp slowdown China’s GDP growth jumped to a record high in y/y terms last quarter. But this was entirely due to a weaker base for comparison from last year’s historic downturn. In q/q terms, growth dropped back sharply and, …
16th April 2021
Imports at record high, exports soften a touch Export and import growth remained elevated in y/y terms last month, even as base effects turned slightly less favourable. In level terms, exports dropped back slightly but imports continued to rise thanks to …
13th April 2021
Credit growth resumes its downward trajectory After an uptick in February, the slowdown in credit growth resumed in March. Hawkish signals in the government’s work report suggest that the deceleration will continue as policymakers focus on reining in …
12th April 2021
Factory gate prices jump by most in four years Consumer price deflation reversed last month due to a jump in fuel prices and an uptick in core inflation. But evidence of intensifying price pressures was clearest in producer price inflation, which was the …
9th April 2021
Unofficial survey paints a less upbeat picture After yesterday’s strong set of Official PMI data, the Caixin manufacturing index published today disappointed, falling to an eleven-month low. Taken together, the surveys are consistent with a slight pick-up …
1st April 2021
Growth bounce not sustainable The latest surveys suggest that after being hit by virus disruptions earlier in the year, activity bounced back strongly this month. But we suspect it won’t be long before growth is slowing again. The official manufacturing …
31st March 2021
Travel restrictions weigh on consumption, boost industry Economic growth surged in y/y terms in January and February. But the picture is more mixed after accounting for favourable base effects. Travel restrictions weighed on retail sales but boosted …
15th March 2021
A pause in the credit slowdown After four months of consecutive declines, broad credit growth accelerated in February. But we think the slowdown in lending will resume before long given the hawkish signals out of the National People’s Congress (NPC). This …
10th March 2021
Consumer price deflation unlikely to persist A drop in food inflation caused by shifts in the timing of the Lunar New Year meant that headline consumer price inflation remained in negative territory last month. That said, broader price pressures continued …
Exports benefit from overseas lockdowns and domestic travel restrictions Export and import growth surged in y/y terms in January and February. Even accounting for favourable base effects, shipments look strong. Exports continued to be buoyed by …
8th March 2021
Spring Festival restrictions failed to lift industry The latest manufacturing surveys suggest that factory activity didn’t receive the boost we had anticipated from travel restrictions over the Spring Festival. Nevertheless, we think activity will remain …
1st March 2021
Slip into deflation no cause for concern Headline consumer price inflation returned to negative territory last month, but this was largely due to a shift in the timing of the Lunar New Year. In fact, producer price inflation turned positive for the first …
10th February 2021
Credit growth continues to slow as policy turns less supportive Credit growth in China dropped back further last month due to a broad-based slowdown in both bank and non-bank lending. Credit is likely to continue decelerating as the PBOC focuses on …
9th February 2021
Industrial rebound shifts down a gear The latest surveys suggest that the pace of expansion in the manufacturing sector slowed in January. But that’s not too surprising given that output was already well above trend – capacity utilisation rates in …
1st February 2021
Recovery sputters due to renewed virus outbreak Hong Kong’s economy was treading water at the end of 2020 as the re-imposition of containment measures weighed on consumption. Unless authorities bring the ongoing outbreak under control soon, the recovery …
29th January 2021
Strong end to 2020 pushes Q4 GDP above pre-virus rates On the official figures, China’s economy expanded at the fastest pace in two years last quarter. The monthly data suggest that growth dropped back slightly heading into 2021 but it remains strong. We …
18th January 2021
Trade remains resilient amid lockdowns abroad Exports continued to do well last month, as renewed lockdowns abroad ensured the shift in consumption from services to goods persisted in many of China’s trading partners. Meanwhile, a pick-up in import growth …
14th January 2021