CHINA+ DATA WRAP 15 AUGUST 2022: A sharper loss of momentum than expected for China

Manufacturing struggles despite subsidies 

An even bigger miss for retail sales 

Real estate still a killer for FAI 

Monetary easing won’t do anything 

A modest rebound for Japan in Q2 

Craig BothamChina+

18 July 2022 A False Dawn in June Data, as China's Economy Shrinks in Q2

Official data came closer to the truth than expected, showing a very weak Q2 for Chinese GDP.

June activity data showed a stronger bounce than anticipated, but this seems unsustainable.

Stimulus remains unequal to the task of reviving growth, and the target now looks doomed.

Craig BothamChina+

CHINA+ DATA WRAP 15 JULY 2022: Official GDP - somewhat surprisingly - confirms a terrible Q2 for China

More of a slowdown for GDP than expected

A strong month for manufacturing, but momentum is fading

Subsidies pulled forward retail sales growth

Property continues to weigh on fixed asset investment

The reopening bounce for real estate proved underwhelming

Craig BothamChina+

16 June 2022 China's Reopening Rebound Gets Going, but Watch New Cases

Reopening has proceeded faster than we expected in China, prompting a larger immediate rebound.

Industrial production in particular has benefitted from a return to normal, and an export backlog.

Subsidies helped to prop up retail sales, but likely reallocated, rather than boosted, consumption.

Craig BothamChina+

CHINA+ DATA WRAP 15 JUNE 2022: Chinese activity beat expectations in May

Clearing the export backlog boosted industrial production

Flickers of stimulus in FAI data

Chinese consumers prove more resilient than expected

Craig BothamChina+

13 June 2022 Price and Money Data Show Demand is Still Weak in China

Inflation data hint at weak domestic demand, but also point to disinflationary pressures from China.

Food prices are the main driver of CPI inflation, but the PBoC target will only briefly be breached.

Bank lending has turned a corner, but it doesn’t look like the private sector is benefitting.

Craig BothamChina+

17 May 2022 Recession Now Looks Unavoidable for China, thanks to Zero-Covid

We are lowering our Chinese GDP forecast, as the data for April were closer to reality than expected.

Prolonged zero-Covid restrictions risk permanent economic scarring, limiting any rebound.

China’s property sector is a separate—and over- looked—drag on activity, and set to persist.

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+

CHINA+ DATA WRAP 18 APR 2022: Slightly better than expected, but worse to come for China

A dilemma for policymakers

Factory closures weighed on industrial production

Infrastructure supported sagging FAI, but not for much longer

The biggest Covid casualty will continue to bleed out

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+

CHINA+ DATA WRAP 15.03.2022: Chinese data outstrips all expectations

A state-led recovery in investment...

…likely rippled through to the rest of the economy    

Is the data reliable?

Craig BothamChina+

8 Mar 2022 China's 2022 Work Report, Road Map or Wish-List

• Slower export growth provides a taster of the challenges facing China's economy in 2022.
• The Work Report—a government scorecard and road map—suggests a reliance on infrastructure...
• ...but convincing local governments and banks to do their part is going to be difficult, and risky.

Craig BothamChina+

21 Feb 2022 A Brief Lull, but Japanese Inflation will Soon Jump, Relatively Speaking

Craig BothamChina+

16 Feb 2022 Japan Returns to Growth, but the Bumpy Ride isn't Over

• Japanese GDP growth returned to positive territory in Q4, thanks to a rebound in consumption.
• Consumption will be under pressure in Q1, thanks to Omicron, but investment should recover.
• Chinese stimulus remains very modest, illustrated by a net withdrawal of liquidity this month.

Craig BothamChina+

1 Feb 2022 A Trifecta of Disruptions Hits Chinese Activity in January

• Chinese factory closures—thanks to Covid, holi- days, and pollution—led to soft manufacturing data.
• Covid alone is the prime suspect for weakness in services activity, and is not yet under control.
• Policy is yet to turn growth around, but we expect the floor to emerge by March.

Craig BothamChina+

27 Jan 2022 Chinese Property Sector Update, Keep a Cool Head on Easing

• China's property sector plummeted over the course of 2021, and nosedives are hard to escape.
• Policy easing looks modest compared to previous cycles, in line with government messaging.
• The impact of easing on growth will also be weaker than markets expect, based on past cycles.

Craig BothamChina+

25 Jan 2022 Omicron Takes its Toll on Japanese Activity, Despite a Boost to Exports

• Japanese manufacturing activity strengthened in January, likely on the back of external demand.
• Soaring Covid cases have hit Japan's services sec- tor; surging hospitalisations will worry China..
• Price pressures picked up again, though the Japanese consumer is unlikely to notice much.

Craig BothamChina+