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Credit growth continues to slow as bond defaults weigh The slowdown in broad credit growth gathered momentum in December. We think credit growth will drop back further in the coming months as the PBOC continues to focus on reining in financial risks now …
13th January 2021
Consumer price deflation reverses as food prices rise Headline inflation returned to positive territory last month as the drag from pork prices eased. Broader price pressures also edged up on the back of stronger demand. With underlying inflation likely …
11th January 2021
Industrial rebound peaking The latest manufacturing surveys suggest that factory activity remained strong in December but that the pace of expansion has started to ease. The official non-manufacturing PMI suggests that growth elsewhere also softened, with …
4th January 2021
Activity goes from strength to strength China’s economy continued to accelerate across all fronts in November. We expect output to remain above-trend in the coming quarters, even as tailwinds from stimulus and exports start to ease. Industrial production …
15th December 2020
Credit growth starts to slow as bond defaults weigh After accelerating in recent months, broad credit growth slowed slightly in November. We think this marks the start of a slowdown in credit growth as the PBOC turns its attention to tackling financial …
9th December 2020
Slip into deflation no cause for alarm Consumer prices fell year-on-year for the first time since 2009 last month. But this was almost entirely driven by a rebound in pork supply and isn’t evidence of faltering demand. To the contrary, broader price …
Exports at record high while imports remain resilient Exports jumped last month largely due to a surge in consumer goods exports as renewed COVID-19 flare-ups kept consumption in many of China’s trading partners skewed towards goods rather than services. …
7th December 2020
Industry goes from strength to strength The Caixin manufacturing PMI hit a decade high in November. The official survey released yesterday also rose, to its highest in three years. While the rebound in industry will eventually lose steam, policy stimulus …
1st December 2020
Rebound continues to strengthen The latest official PMI surveys show that the pace of economic growth picked up in November on the back of a broad-based improvement in both services and manufacturing. The official manufacturing PMI rose from 51.4 in …
30th November 2020
Consumption and services back to normal The latest data suggest that the broad-based acceleration of China’s economy continued in October. Policy stimulus continued to boost investment and industrial output while growth in real retail sales and services …
16th November 2020
Acceleration in credit growth continues Broad credit growth hit is highest level in nearly three years as faster growth in direct financing and shadow credit more than offset slower bank lending. We think this acceleration will continue until the turn of …
11th November 2020
Food price drop drags inflation to eleven-year low Headline consumer price inflation fell sharply in October, to its lowest since 2009. But this was almost entirely due to falling food prices – core inflation and factory gate inflation held steady last …
10th November 2020
Exports and imports remain near record highs Exports continued to do well last month thanks to a shift in consumption, from services toward goods, in many of China’s trading partners. Meanwhile, inbound shipments held up better than the decline in …
9th November 2020
Rebound continues to broaden The Caixin manufacturing PMI points to an acceleration in manufacturing activity in October. Admittedly, the official survey released on Saturday pointed to a marginal slowdown. But taken together, they suggest that momentum …
2nd November 2020
Fiscal and external tailwinds kickstart recovery Hong Kong’s economy expanded for the first time in over a year last quarter, thanks to fiscal stimulus and stronger foreign demand. Output is still well below its previous peak due to the double blow from …
30th October 2020
Services & consumption getting back on track China’s economy continued its rapid rebound last quarter, with the recovery broadening out and becoming less reliant on investment-led stimulus. What’s more, the monthly data show that growth was still …
19th October 2020
Food aside, prices continue to recover from COVID-19 downturn Headline consumer price inflation, weighed down by easing food price inflation, continued its decline last month. But core consumer prices rose again for the second straight month and factory …
15th October 2020
Credit growth has yet to peak this cycle Broad credit growth hit is highest level in nearly three years. We think this acceleration should continue until early next year. Chinese banks extended RMB 1,900bn in net new local currency loans in September, up …
14th October 2020
Imports surge, exports remain resilient Exports continued to do well, most likely thanks to the recent strength of retail sales among China’s major trading partners. And a jump in imports suggests that domestic investment spending remains robust. Imports …
13th October 2020
Rebound still going strong The latest PMIs show that economic activity continued to accelerate in September on the back of a broad-based improvement in both services and manufacturing. The Caixin manufacturing PMI edged down fractionally, from 53.1 in …
30th September 2020
Recovery continues as consumption rebounds Economic growth in China accelerated further in August as sentiment improved among consumers and private firms. Retail sales surpassed 2019 levels for the first time since the COVID-19 outbreak, while investment …
15th September 2020
Acceleration in credit growth continues Broad credit growth hit its highest level in two and a half years as growth in direct financing and shadow credit picked up amid steady bank lending. We think that this acceleration has further to run. Chinese …
11th September 2020
Core inflation bottoming out Headline consumer price inflation slipped last month on the back of easing food price inflation. But core consumer prices rose for the first time since the COVID-19 outbreak and the ongoing recovery in economic activity …
9th September 2020
Base effects flatter exports, imports stronger than meets the eye The pick-up in headline export growth last month reflects base effects and masks a slowdown in levels terms. Meanwhile, imports are doing just as well as exports once price effects are …
7th September 2020
Manufacturing activity continues to strengthen The Caixin manufacturing PMI points to faster growth in manufacturing activity in August. Admittedly, the official survey released yesterday had pointed to a marginal slowdown. But taken together, they …
1st September 2020
Economy accelerates as services activity rebounds The latest official PMI surveys showed that the pace of economic growth picked up in August as stronger services activity more than offset a slight loss of momentum in manufacturing and construction. The …
31st August 2020
Recovery slows at the start of Q3 The latest data suggest that China’s economy continued to recover in July, though less quickly than expected. But a slowdown in the recovery was always likely at some point as the initial boost from re-opening faded. And …
14th August 2020
Shadow banking revival nudges up credit growth Broad credit growth hit its highest rate in nearly two and a half years last month as a pick-up in direct financing and shadow credit offset slower issuance of bank loans. The acceleration has further to run. …
11th August 2020
Flooding pushes up food prices Consumer price rose last month following floods that disrupted agricultural production. Meanwhile, factory gate deflation continued to ease in July, reflecting the ongoing recovery in economic activity. Consumer price …
10th August 2020
Shipments point to a further recovery in domestic and foreign demand Imports edged up in level terms, consistent with the ongoing recovery in domestic activity. Meanwhile, exports jumped thanks to stronger foreign demand and the ongoing boost from …
7th August 2020
Stimulus pushes index to nine-year high The official PMIs released on Friday had already pointed to a robust recovery at the start of Q3. But the Caixin index published today is even more upbeat and suggests that the pace of expansion in industry was the …
3rd August 2020
Recovery still going strong at the start of Q3 The latest survey data suggest that last quarter’s rapid economic rebound has extended into the second half of the year thanks to recovering foreign demand and strong fiscal support. The official …
31st July 2020
Renewed virus outbreak to delay city’s recovery Hong Kong’s economy stabilised last quarter as fiscal stimulus and stronger demand in mainland China offset weaker consumption and investment. But with the city facing its worst COVID-19 outbreak yet, hopes …
29th July 2020
Strong end to Q2 pushes GDP above pre-virus levels After a sharp contraction in Q1, the economy bounced back strongly in Q2, with the level of GDP reaching a new high. What’s more, the monthly activity and spending figures show that growth was still …
16th July 2020
Surge in imports signals strong domestic recovery Inbound shipments jumped the most in m/m terms in years, adding to evidence that domestic demand was strong at the end of Q2. Exports also strengthened as slower shipments of products related to COVID-19 …
14th July 2020
Acceleration in credit growth has further to run Broad credit growth hit a two-year high in June and the recent uptick in interest rates is unlikely to prevent a further acceleration in the coming months. Chinese banks extended RMB1,810bn in net new local …
10th July 2020
Factory-gate deflation starts to ease Producer prices rose last month for the first time since the outbreak of COVID-19, adding to evidence that industrial demand had mostly recovered by the end of Q2. Core inflation fell to its weakest in a decade but …
9th July 2020
Highest reading in 2020 signals robust recovery The Caixin manufacturing PMI suggests that the pace of the recovery increased in June, echoing the official survey which was released yesterday. This supports our view that GDP growth likely turned positive …
1st July 2020
Activity ends Q2 on a strong note The latest survey data suggest that economic growth accelerated in June thanks to a faster recovery in manufacturing and services, alongside continued strength in construction activity. The recovery should remain robust …
30th June 2020
Economy no longer contracting year-on-year State-led infrastructure construction jumped last month and pushed up growth in fixed asset investment and industrial production. Meanwhile, growth in services activity turned positive and suggests that overall …
15th June 2020
Credit growth continues to accelerate A jump in government bond issuance helped push credit growth to a 21-month high in May. The acceleration in credit growth has further to run and will add fuel to the economic recovery. Chinese banks extended …
10th June 2020
Underlying inflation close to bottoming out Consumer price inflation slipped further last month due to falling food prices, while subdued demand continued to weigh on factory gate prices. But food prices aside, the recent decline in inflation could be …
Weak external demand catches up with exports Export growth turned negative last month as lockdowns abroad weighted on global demand. And the ongoing domestic recovery failed to keep import growth from slipping further. A global recovery and further ramp …
8th June 2020
Recovery remains steady but slow The PMIs show that the recovery in activity extended into last month and appears to have broadened out into parts of manufacturing that were previously struggling. But there are few signs of a marked pick-up in the overall …
1st June 2020
Recovery continues but remains highly uneven Industrial output and investment rose year-on-year in April for the first time since the COVID-19 outbreak. But retail sales and services activity continued to contract, held back by high unemployment. Growth …
15th May 2020
Factory-gate prices post steepest drop in over a decade Consumer and producer price inflation fell sharply last month, reflecting the continued weakness in demand. Price pressures are likely to ease further in the coming months, strengthening the case for …
12th May 2020
Credit growth hits a 22-month high Credit growth accelerated further last month, a trend that will probably continue given signals from the PBOC’s Q1 monetary report published over the weekend that more stimulus measures are in the pipeline. This will …
11th May 2020
Exports can’t defy the global downturn for long China’s exports were much stronger than anticipated in April but are likely to drop back sharply this month. In contrast, the recent resilience of imports faltered in April as inbound shipments began to play …
7th May 2020
Epidemiological success, economic pain Hong Kong’s economy contracted by the most on record last quarter as tourism collapsed, trade flows slowed sharply and social distancing weighed on domestic spending. The city’s GDP fell 5.3% q/q in …
4th May 2020
Recovery remains tepid as weak exports hold back manufacturing The latest survey data shows that renewed weakness in the manufacturing sector was offset by a pick-up in construction and services, leaving the overall pace of recovery broadly unchanged in …
30th April 2020