China

CHINA

Screen Shot 2018-10-22 at 11.32.21 PM

Screen Shot 2018-10-22 at 11.32.37 PM


Screen Shot 2018-11-13 at 12.01.49 PM.png

1. CHINA’S DRAG ON THE GLOBAL ECONOMY INTENSIFIES

The Caixin Composite PMI dropped a full -1.6pts in OCT to 50.5, which represents the lowest reading since the global deflationary lows of mid-2016.

China’s OCT Headline PPI data (↓ -30bps to 3.3% YoY; breaking down from a TRENDING perspective) further underscores the disinflationary impulse upon the global economy stemming from our #ChinaSlowing theme.

The CNY is down -9% vs. the USD over the trailing six months and will be down -8% YoY in 1H19E assuming no change to the current quarterly average exchange rate, which means the inflationary impulse to import prices stemming from a full implementation to 25% tariffs on the $541.6B in goods the U.S. projected to import from China in 2018E will be more than offset by annualized dollar strength during that interval.

Chinese policymakers are officially panicking with respect to the growth outlook (e.g. strict lending quotas for private firms), but we continue to believe they remain fairly constrained on the monetary policy front until we see a dovish pivot out of the Federal Reserve – likely a mid-to-late Q1 event.

 

 

ChinaDollarDebtExposureHedgeye_Structural_Economic_Headwinds_Within_the_Chinese_Economy_9-14-18

Beijing%20Is%2china0Going%20To%20Need%20A%20Bigger%20Boat%20To%20Rescue%20#OldChina.png

#ShortEM (introduced 1/4/18 under the title, “#UnderweightEM”):

  • Beijing Remains Handcuffed (10/18): With respect to Chinese monetary policy, we obviously track a deluge daily/weekly/monthly data – e.g. OMO, MTLF, RRR, BPR, 7DRR, SHIBOR, etc. – but for those of you who want to boil it all down to what it actually means for economic growth on the mainland, there’s one number you need to track on a monthly basis – i.e. the annual growth rate of bank loans.

ChinaBankLoansOutstandingYoYChinaCruiseShipvs.CanoeAnalysisChinaPolicyMonitor


China.png


Screen Shot 2018-11-09 at 7.33.26 PMChina Economic Watch CPI inflation stayed flat with softer PPI inflation in OctoberScreen Shot 2018-11-09 at 7.33.40 PMScreen Shot 2018-11-09 at 7.33.46 PM

 

 

 

 

Screen Shot 2018-10-29 at 11.02.53 AMChina Economic Watch- More stimulus to come

Screen Shot 2018-10-29 at 11.04.17 AMScreen Shot 2018-10-29 at 11.04.27 AMScreen Shot 2018-10-29 at 11.04.34 AMScreen Shot 2018-10-29 at 11.04.43 AM


Screen Shot 2018-11-08 at 8.35.20 AMChina Economic Watch Oct export growth improved on favorable calendar effects and front loadingScreen Shot 2018-11-08 at 8.35.57 AM.pngScreen Shot 2018-11-08 at 8.36.02 AM.png

Screen Shot 2018-10-24 at 10.38.06 PMScreen Shot 2018-10-24 at 11.09.34 PMScreen Shot 2018-10-24 at 11.09.43 PMScreen Shot 2018-10-24 at 11.09.50 PMScreen Shot 2018-10-24 at 11.09.55 PM


Screen Shot 2018-10-24 at 9.56.54 PMBofAML China Activity Coincident Tracker Growth momentum continued trending lower in SeptemberScreen Shot 2018-10-24 at 9.57.22 PMScreen Shot 2018-10-24 at 9.57.30 PMScreen Shot 2018-10-24 at 9.57.39 PM


Screen Shot 2018-10-24 at 10.04.07 PMChina Economic Watch- PBoC’s new initiatives to encourage credit extension to private businessScreen Shot 2018-10-24 at 10.04.43 PM


Screen Shot 2018-10-22 at 11.34.49 PM

China Unicom 3Q results- wireline broadband business continues to be impacted by China MobileScreen Shot 2018-10-22 at 11.36.36 PMScreen Shot 2018-10-22 at 11.36.48 PMScreen Shot 2018-10-22 at 11.37.01 PMScreen Shot 2018-10-22 at 11.37.14 PMScreen Shot 2018-10-22 at 11.37.22 PMScreen Shot 2018-10-22 at 11.38.14 PM

 


10/10/2018

Screen Shot 2018-10-19 at 2.30.53 PMScreen Shot 2018-10-19 at 2.31.04 PMScreen Shot 2018-10-19 at 2.31.11 PM

 

China Economic Watch GDP growth weakened in 3Q with mixed activity data in September