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China+ Publications

Below is a list of our China+ Publications for the last 6 months. If you are looking for reports older than 6 months please email info@pantheonmacro.com, or contact your account rep

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12 May 2022 Food is Driving Up Chinese Inflation, but the Core Rate is Falling

Chinese CPI inflation jumped in April, due to soaring food prices, but that will not worry the PBoC.

Zero-Covid has pushed up food prices, even as it depresses core inflation.

The PBoC has joined fiscal policymakers in making announcements with no new information.

Craig BothamChina+

9 May 2022 Above Target At Last, but the BoJ Still Won't be Satisfied

Japan’s Tokyo CPI broke through its 2% target, as widely expected, but policy won’t change.

Inflation driven by base effects, and food prices, is seen as unsustainable by the BoJ.

Imported inflation will be viewed in a similar light, so no change in the policy rate is on the horizon.

Craig BothamChina+

29 Apr 2022 The BoJ Fiddles While the Yen Burns, the MoF Readies the Hose

The BoJ shrugged off currency fears, keeping rates on hold and even leaning into YCC.

Acting as a sign of determination to keep rates capped, markets duly reacted by dumping the yen.

Japan’s Ministry of Finance reacted swiftly, and irritably; intervention now looms on the horizon.

Craig BothamChina+

25 Apr 2022 The BoJ will Remain Indifferent as Inflation Approaches Its Target

Japanese inflation is still rising, and is all but guaranteed to break through its target in April...

...But the BoJ has already indicated it has no intention of changing tack; rates won't rise this year.

Policymakers are flirting with the idea of currency intervention, but Kuroda won't take the lead.

Craig BothamChina+

22 Apr 2022 The PBoC Buckles Up for the Renminbi's Wild Ride

China's currency is finally succumbing to pressure from multiple fronts, and has further to fall.

The renminbi poses a key constraint to PBoC policy, which Beijing will ultimately override.

April export data from Korea show that China's bat- tle with Covid will weigh heavily on global trade.

Craig BothamChina+

19 Apr 2022 Caught on the Horns of a Dilemma, with Chinese Characteristics

China's economy beat expectations in Q1, but is still falling short of the 2022 growth target.

The GDP data probably overstate economic growth, but either way things will get worse in Q2.

The battle with Covid is proving extremely costly; it will necessitate more stimulus, and soon.

Craig BothamChina+

12 Apr 2022 Plenty of Scope, and Need, for Further Easing in China

China's inflation outlook remains very different to most major economies, despite the energy shock.

The PBoC is able to ease further, with inflation far from its target, but is proving reluctant.

Private sector demand for credit still looks soft, and the PBoC’s power is limited, absent fiscal action.

Craig BothamChina+

8 Apr 2022 China's FX Reserves Data Herald An Inflection Point for the Renminbi

China's FX reserves fell again in March, amidst reports of large portfolio outflows, thanks to Putin.

One by one, the key supports for the renminbi are being chipped away, and Q2 will be turbulent...

...but H2 will see a downward trend consolidate, as multiple headwinds force the RMB to submit.

Craig BothamChina+

6 Apr 2022 PMIs Show Domestic and External Demand are Diverging for Japan

Japan's services PMI rebounded in March, adding to evidence of a domestic recovery in late Q1.

Unfortunately, 2022 has had a slow start, and GDP probably fell in Q1, quarter-on-quarter.

Inflation still isn't behaving as the BoJ would like, but the sands are shifting on the yen.

Craig BothamChina+

4 Apr 2022 Whether China Sneezes, or Locks Down, Asia Catches a Cold

  • China's lockdowns and other restrictions weighed on regional activity in March, particularly exports.
  • Factory closures in China have tightened some bottlenecks, but others may have loosened.
  • The war in Ukraine has added to cost pressures, and worse is to come on both fronts.

Craig BothamChina+

28 Mar 2022 More of the Wrong Sort of Inflation for the BoJ, as the Yen Plummets

  • Energy and food push inflation higher, and Japan is set to beat its target next month...
  • ...but the BoJ won't be moved, as demand-pull inflation remains as elusive as ever.
  • Yen weakness is the biggest challenge to the BoJ's position, and likely will force a shift by H2.

Craig BothamChina+

22 Mar 2022 Korean Exports Falter as Demand and Supply Issues Bite

  • Preliminary trade data from Korea point to a loss of momentum for global trade in March.
  • War and Covid have tightened some bottlenecks, but demand is also under pressure from oil prices.
  • The PBoC again opted not to ramp up monetary easing, despite recent messaging from Beijing.

Craig BothamChina+

21 Mar 2022 The BoJ Splits from the Pack, as Energy Costs Climb

  • Japan is not entirely immune to global inflation shocks; CPI is rising as energy costs surge.
  • The BoJ, however, has the luxury of choosing the sort of inflation it wants, and will not be hiking.
  • Don't get too excited by rumours of a turnaround in Chinese policy; nothing much has changed.

Craig BothamChina+

CHINA+ DATA WRAP 16.03.2022: Japan's exports stabilise, but China's housing market keeps dropping

Holiday distortions unwind for Japan’s exporters

No break for China’s housing market

Craig BothamChina+

14 Mar 2022 Chinese Stimulus Underwhelms as Risk Appetite Remains Muted

  • Monetary easing is yet to result in more credit reaching the private sector, as lending slows.
  • The state sector is still the driving force behind credit expansion, amidst elevated risk aversion.
  • We expect the policy response to strengthen now the NPC is over, but remember, stability is the goal.

Craig BothamChina+

10 Mar 2022 Chinese Inflation Approaches a Nadir, but It's Complicated

  • Energy and food are set to drive Chinese inflation dynamics, but base effects will play a big part.
  • Global commodity prices are surging, but the link to domestic consumer prices is modest.
  • The PBoC will stay dovish, and may ease more ag- gressively, due to—not in spite of—the cost shock.

Craig BothamChina+

7 Mar 2022 The War in Ukraine Brings More Pain for Chinese Industry

  • Soaring energy prices will hit Chinese corporates harder than households, and Beijing will have to act. 
  • The PBoC will not be turning hawkish, despite the shock to inflation, instead boosting SME support. 
  • China's battle to support manufacturers is likely to renew tensions over its industrial policy this year. 

Craig BothamChina+

3 Mar 2022 Another Unwelcome Supply Side Shock for Global Trade

  • Regional PMIs show cost pressures were already rising on the eve of Russia's invasion of Ukraine.
  • The behaviour of oil and other commodity prices signals further increases to come.
  • We expect these cost increases to be passed on to consumers, amidst strong external demand.

Craig BothamChina+

28 Feb 2022 Japanese Inflation is Creeping Higher, but the Target is Still Distant

  • Tokyo CPI inflation reached its highest level since December 2019 in February, and will climb further.
  • The target is still unlikely to be breached, however, and this is not the type of inflation the BoJ wants.
  • The BoK remains hawkish, despite holding rates, and the hiking cycle has further to run.

Craig BothamChina+

24 Feb 2022 Ukraine, Energy Prices a Bigger Worry than Awkwardness for China

  • Russia's invasion of Ukraine puts China in a tricky position diplomatically, but it won't mind too much...
  • ...What matters more to China is the impact on energy prices, at a time of softening growth.
  • Announcements signal more support from the centre, but bang-for-buck will be lower than usual.

Craig BothamChina+

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