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Cuts to benchmark interest rates could end up doing more harm than good to China’s economy. Policymakers worried about elevated financing costs in the corporate sector would do better to focus on improving access to credit for smaller, more productive …
4th August 2014
A hard landing in China’s economy is one of the biggest risks clouding the outlook for the rest of Emerging Asia. A slump in Chinese demand would hurt economies with close trade links to China, with commodity exporters likely to be especially hard-hit. A …
15th April 2014
A growing number of economists are challenging the view that China invests too much and consumes too little by arguing that the official data grossly understate consumption and overstate investment. There is a degree of truth to these claims. But the …
2nd April 2014
China’s cash crunch has shone a spotlight on its interbank market, which investors without a close interest in China’s banking and financial sector previously paid little attention to. In this month’s China Watch , we give a brief primer on the interbank …
27th June 2013
With the People’s Bank determined to limit renminbi appreciation but reluctant to add to its foreign currency reserves, China’s commercial banks have taken on the role of the economy’s foreign exchange buyers of last resort. This cannot last. … Why are …
4th February 2013
China’s once-in-a-decade leadership transition reaches a climax in November when a new generation takes control of the Party. In this China Watch , we ask who the key figures of the new leadership are likely to be and give some rough thoughts on what the …
31st October 2012
China’s economic prospects depend in large part on what happens to its property market. In this Focus, we answer the key questions on affordability, empty housing and over-investment that will determine the sector’s health and its likely impact on growth …
6th September 2012
Questions are again being asked about whether we can trust China’s economic data. Our attempts to track the speed of the economy using our China Activity Proxy do not support suggestions of widespread manipulation. But they do suggest that growth was …
29th June 2012
China’s investment-driven economic model is not showing signs of strain at present but growth is unlikely to be as smooth as most expect over the next few years. We have pencilled in a well-below-consensus forecast for 2013. … Is investment-driven growth …
3rd August 2011
Most of emerging Asia should continue to grow rapidly for at least another decade, and much longer if the right policy choices are made. The key exception is China where, despite a bright long-run outlook, structural reform is needed sooner rather than …
5th July 2011
China’s trade surplus looks much smaller from within the country than it does from abroad. China’s customs data put the goods surplus last year at 3% of GDP. China’s trading partners reported a collective deficit with China three times as large. Who is …
17th June 2011
Today’s tensions between China and the US have many echoes of those between Japan and the US in the 1980s including, most clearly, over the exchange rate. The lesson for China is not, as some have suggested, that China should withstand US pressure on its …
8th November 2010
The government has announced a series of moves over the last month designed to push the renminbi along the road to becoming an international currency. But major obstacles stand in the way, not least the government’s reluctance to allow unfettered …
6th September 2010
China no longer has a surplus of underemployed workers in the countryside willing to move elsewhere for rock bottom wages, but it does still have a large and inefficient agricultural workforce. Their continued migration into manufacturing and services …
29th June 2010
A little-noticed report published last week by the People’s Bank of China (PBC) gives arguably the best estimate yet of how much China’s economy slowed at the end of last year and how rapidly it has since accelerated. … A new angle on Chinese …
7th August 2009
Thirty years after the launch of reform in China, the experience of Japan and the Asian tigers underlines the need for China to shift its economic model if it is to sustain rapid growth over the medium term. … Is China running out of steam after 30 years …
24th November 2008
China’s announcement of a huge fiscal stimulus package is an attempt to shock and awe Chinese firms and households to keep spending. If it succeeds, the government will end up spending much less than the headline figures suggest. … China’s fiscal package …
10th November 2008