China

World economy 16th February 2022

China Continued To Deleverage Towards The End Of 2021 Thanks To The Corporate Sector But With An Increase In Government Debt

Alicia García Herrero (Natixis) | China’s debt-to-GDP ratio continued to decrease in Q4 2021 to 264.3% from 266.5% in Q3. Notwithstanding the deleverage path in 2021, the debt is still much higher than the pre-pandemic one (247.5% in Q4 2019). Chinese corporates contributed the most to the deleveraging process, as their debt to GDP ratio further dropped to 155.1% in Q4 2021 from 158.3% in Q3 2021. Because of the…

An exterior view of China Evergrande Centre in Hong Kong

World economy 8th February 2022

China’s Regulatory Crackdown: What To Expect?

Alicia García Herrero (Natixis) | Chinese policy makers have been engaged in a massive regulatory crackdown for over a year. A number of sectors have been affected, starting with the tech sector, followed by the education sector. At the same time the real estate sector has also been severely affected by a specific regulatory crackdown (the three red lines) and a more general antitrust push has also taken place. In…

World economy 30th January 2022

China’s Real Estate Sector: Size Does Matter

Luís Pinheiro de Matos (CaixaBank Research) | China’s real estate sector is often described as «the most important sector in the world» because of the importance it has amassed in recent decades in the Asian giant’s growth model. We analyse how significant a role it plays in the Chinese economy and the risks of the Evergrande effect.

World economy 19th January 2022

Q4 GDP Enough To Set China’s 2021 Growth Above The 8% Benchmark But With Challenges Ahead For 2022

Alicia García Herrero (Natixis) | Chinese economy has rebounded by 8.1% in 2021 after slumping to 2.2% in 2020. While the Q4 year-on-year growth rate was lowered to only 4%, the current growth momentum was still positive as the QoQ growth rate (seasonally adjusted) have accelerated to 1.6% in Q4 from 0.7% in Q3. However, there are signs that the Chinese economy is facing increasing challenges, raising questions on whether…

World economy 9th January 2022

The ‘China Shock’ Of Trade In The 2000s Reverberates In US Politics And Economics

Amitrajeet A. Batabyal ( The Conversation) In December 1978, the Chinese leader Deng Xiaoping introduced economic reforms that dramatically altered China’s economy by strengthening trade and cultural ties with the West. Beginning in the 1990s, these reforms set China on a trajectory to become what it is today: a nation with a dynamic and substantially market-driven economy that is also the world’s second-largest. U.S. residents have enjoyed lower-priced goods exported…

World economy 12th December 2021

China’s Long-Term Problems Are Forcing It To Rethink The Whole Economy

Kent Matthews ( The Conversation) | Growth in China was in fact declining well before the pandemic struck: from a peak of 15% in the second quarter of 2007 to 6% in the first three months of 2019. The nation’s growth strategy rests on four pillars. Three are frequently talked about – infrastructure, exports and consumers – while the fourth is only whispered in official circles – and that is the property sector.

World economy 7th December 2021

China Is At The Start Of An Easing Cycle

Alicia García Herrero (Natixis) | The PBoC cut the Required Reserve Ratio (RRR) by 0.5 percentage points yesterday, amid the economic slowdown. This should not surprise us, as China is in the midst of a cyclical slowdown. However, the move has happened when China’s PPI and CPI have just edged up to 13.5% and 1.5% from 10.7% and 0.7% respectively in November. The message to the market is clear: avoiding…

World economy 23rd October 2021

Infrastructure: The Key To The China Challenge

Peter Rodgers | While providing a credible US-led alternative to the Belt and Road Initiative is desirable, the US must commit adequate financial and leadership resources to the effort. This is a good first step, but Washington must be careful not to create a new paranoia by demonizing economic and geopolitical rivals such as China and Japan to the point where it distorts priorities and leads to increased military spending rather than public investments in education, infrastructure and basic research, all of which are critical to America’s future prosperity and security.

World economy 13th October 2021

China’s September Trade Surplus Rises To $66.6 Billion

Link Securities | China’s General Administration of Customs reported early this morning that the September trade surplus rose to $66.67 billion, up from a consensus expected reading for a $45 billion surplus, and up from a figure of $53.3 billion in August. Dollar exports rose by 28.1% y-o-y, against a consensus reading of 21.5%, and compared with a 25.6% increase in August. Meanwhile, imports rose 17.6 per cent year-on-year, compared…

World economy 21st September 2021

Evergrande Is Not Lehman

Intermoney | A slightly higher opening (Eurostoxx futures +0.3%) after yesterday’s 2% falls in the main American and European indices, with the Ibex registering a better relative performance, buoyed by the tourism and defensive sectors. This environment of greater risk aversion and fears about economic growth also translated into additional moderation of IRRs. In the case of Europe, this was also supported by the statements from Villeroy, the governor of…

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