Research

This is where you can find our analytical notes and in-depth research that keep you up to date on all things China macro. You can also use the search feature to look for certain topics.

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Third Plenum Featured

DeepDive: Implications of the Third Plenum

Research and development as well as technology and the new economy dominated the Third Plenum resolution released over the weekend, in line with previous policy communication. Supply chain resilience and national strategic projects also featured prominently compared to previous readouts, while consumption once again took a back seat. We also

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Employment

QuickScan: The Silence Around Employment

Policy communication on employment support and social security has been notably quiet since the second half of last year, and our quantitative text-based indicators signal that greater fiscal spending on this front seems unlikely. Our latest QuickScan has more. State Council policy communication on jobs support and social security has

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Data Dump

DeepDive: Data Dump June 2024

In this Data Dump, we delve into China’s latest macro-economic data, with a special focus on the consumer and the housing market. While home sales jumped in the second half of June, we think this should be taken with a pinch of salt for now, as much of the

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Pboc Featured

DeepDive: Changes in the Monetary Policy Toolbox

Last week, the governor of the PBoC hinted at a number of potential changes to the central bank's monetary policy toolbox, including government bond trading, a greater focus on price-based monetary instruments, and changes to the definition of narrow and broad money supply. Our latest DeepDive has more.

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RMB

QuickScan: The Direction of the Renminbi

In this QuickScan, we discuss why we think China is unlikely to substantially weaken its currency further. While there have been significant devaluations in the past, we believe the current environment is different from 2015/16 and 2018/19, when China resorted to weakening the RMB to boost exports and

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Data Dump

DeepDive: Data Dump May 2024

In this Data Dump, we delve into China’s latest macroeconomic data, including deposit flows, borrowing demand, and recent inflows into wealth management products. Early last year, we argued that consumers were unlikely to go on a spending spree in 2023 and suggested that the sharp rise in deposits in

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Trade

QuickScan: Exports Up, Trade Relations Down

Exports have provided a helping hand to the Chinese economy amid sluggish domestic demand this year, in line with our assumption going into the year (see QuickScan: Can the External Macro Environment Prove to Be a Boon?). Shipments will likely remain robust in the coming months, with recent signs of

Pboc Featured

DeepDive: The Latest from the PBoC

In our DeepDive, we analyse the PBoC’s latest macroeconomic outlook. Our text-based macro indicators continue to point to an improving outlook, reinforcing our cautiously optimistic view that we adopted in early February. Our DeepDive has the latest readings of our indicators and key messages from the PBoC’s policy

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Politburo

DeepDive: Politburo Update April 2024

The Politburo adopted a notably more supportive tone in its meeting earlier this week and offered unusually specific directives on measures to further prop up the economy. Our Politburo update delves into the potential implications for fiscal and monetary policy, as well as the property market and foreign trade sector.

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Chartbook

Chartbook Q1 2024

Our text-based macro indicators have been pointing to an improving macro backdrop in China since February this year, which tends to be positive for equities while signalling headwinds for bonds. Also see DeepDive: Nascent Signs of an Improving Outlook in the PBoC’s Messaging and QuickScan: Watching the Long End

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Data Dump

DeepDive: Data Dump April 2024

In this Data Dump, we argue that corporate borrowing is not as weak as portrayed by the consensus view if the high base from the last two years is taken into consideration. There are also some mixed signs that consumer sentiment may be improving gradually, although retail sales underwhelmed in

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Macro

QuickScan: Watching the Long End of the Curve

Last week, the PBoC drew attention to long-term bond yields in its monetary policy committee meeting. We think this policy communication, combined with recent macro data and our text-based indicators, suggests that headwinds to the recent bond bull market may be building. Last week, the monetary policy committee of the

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Data Dump Featured

DeepDive: Data Dump March 2024

China's manufacturing activity data for March were robust, partially due to the effects of the Lunar New Year, while also reflecting a more favourable external environment and policymakers’ continued focus on supply-side stimulus. Growth in new household deposits has slowed year-to-date, which could point to some improvement in

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Macro

QuickScan: External Macro Factors Still Positive

In early January, we wrote that we were seeing early signs that the external macro environment could deliver some much-needed support to China’s economy and industrial firms this year (see QuickScan: Can the External Macro Environment Prove to Be a Boon?). We believe this thesis is still intact despite

Macro Featured

DeepDive: Signals from the Two Sessions

China’s  government work report on Tuesday signalled robust support for the new economy going forward, aligning with the messaging coming out of the Central Economic Work Conference late last year. Policy stimulus signals, while still supportive, remained moderate overall, consistent with our expectations going into the two sessions. Policymakers

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Data Dump

QuickScan: Data Dump February 2024

China’s macro data were mixed in January, but showed some signs of improvement. New household deposits came in lower than in previous years and household loans were robust. While narrow money supply (M1) spiked, this is not uncommon around the lunar new year, and it remains to be seen

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Pboc Featured

DeepDive: Nascent Signs of an Improving Outlook in the PBoC’s Messaging

In our latest DeepDive, we analyse the PBoC’s Q4 monetary policy report and macroeconomic outlook. Our text-based macro and growth support indicators have begun to show early signs of improvement in the macro outlook, which makes us more cautiously optimistic from a cyclical perspective than we were last year.

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Monetary policy Featured

DeepDive: Some Thoughts on the Stimulus Debate

Our text-based data continue to show that policy will remain accommodative, though likely to a lesser extent than in previous years due to a more cautious tone by policymakers. Stimulus policies continue to focus more on the supply side rather than the demand side, albeit in a more subtle or

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Data Dump Featured

DeepDive: Data Dump January 2024

China’s macro data remained uninspiring in December. Households maintained pessimistic expectations regarding job prospects and wages, while loan demand continued to be low amid persistently high deposit levels. While corporate loan growth was robust year to date, narrow money supply growth (M1) remained lacklustre. The market appears to be

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Trade

QuickScan: More Trade Tensions

Trade tensions have been ratcheting up again, as shown by our proprietary text-based China trade tension indicator. While still early days, this, along with recent increases in geostrategic risk, will likely introduce further uncertainty and may dampen business sentiment. These developments should therefore be watched closely. Nevertheless, we continue to

Macro

QuickScan: Can the External Macro Environment Prove to Be a Boon?

As we enter the new year, China’s domestic conditions continue to appear lacklustre. However, there are early indications of positivity in the external macro environment. Should these signals come to fruition, they could offer some much-needed support to the economy and industrials in the year ahead. The USD has

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Data Dump Featured

DeepDive: Data Dump December 2023

China’s macro data continued to underwhelm in November. While corporate loans have remained fairly robust year-to-date, monetary policy transmission appears to have had less of an impact. Household loans continued to point to consumer caution and total retail sales came in weaker than expected. Household deposit balances are still

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CEWC

QuickScan: CEWC Doubles Down on New Economy

This week, the Central Economic Work Conference continued to double down on the new economy, while largely reiterating last week’s Politburo stance on fiscal and monetary policy. Our text-based quantitative analysis filters out the prominent topics of the meeting and examines their implications. The Central Economic Work Conference (CEWC)

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Politburo

QuickScan: Politburo Update December 2023

Last Friday, the Politburo gathered for its final economic session this year. We compare the messages of the meeting to previous ones to identify potential policy shifts. Overall, the meeting surprised somewhat to the downside. Our latest QuickScan has more. The Politburo fine-tuned its language on monetary policy to focus

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Pboc Featured

DeepDive: Key Messages from the PBoC’s Monetary Policy Outlook

In our latest DeepDive, we analyse the PBoC’s Q3 monetary policy report and outlook for the macroeconomy going forward. While the central bank continues to be optimistic, our quantitative text-based indicators continue to show a more mixed picture.