Targeted regulations won’t fix structural overcapacity
Capital Economics » China Economics
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1w ago
With the EU and US both apparently moving closer to imposing new trade restrictions on EVs and possibly on other "new energy" products from China, China's state media this week made a concerted effort ..read more
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Overcapacity will keep inflation near zero
Capital Economics » China Economics
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1w ago
Most analysts expect China’s inflation rate to rebound to around 2% by 2026. In contrast, we think that persistent imbalances between supply and demand will keep it close to zero for the foreseeable ..read more
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Will China devalue the renminbi?
Capital Economics » China Economics
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1w ago
Chinese policymakers won’t risk reliving the turmoil of 2015 by engineering a sudden devaluation of the renminbi. They may allow the currency to weaken gradually over the coming years to help industry ..read more
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China Chart Pack (Apr. 24)
Capital Economics » China Economics
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3w ago
China’s economy grew at a healthy pace in the first quarter of 2024. Our China Activity Proxy suggests this was on the back of strong external demand. While fiscal support should continue to keep the ..read more
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CAP: Cyclical recovery still underway
Capital Economics » China Economics
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3w ago
Our China Activity Proxy (CAP) suggests the economy saw a healthy expansion in March, driven by the continued strength of industry. While we think that fiscal support will keep fuelling the economy in ..read more
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PBOC bond trading, LGFV pullback
Capital Economics » China Economics
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3w ago
The PBOC has clarified that its plans to start trading government bonds are aimed at managing interest rate risk, not conducting QE. This reinforces our sense that large-scale monetary easing remains ..read more
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Service sector picking up, overcapacity worsening
Capital Economics » China Economics
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1M ago
The GDP breakdown suggests that the acceleration in growth last quarter was driven by the service sector, although the parts most dependent on consumer spending fared less well. And despite the recent ..read more
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China Chart Pack (Mar. 24)
Capital Economics » China Economics
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1M ago
China’s economy continued to recover in the first months of the new year. And we think fiscal support will keep supporting growth in the near-term. That said, the property sector remains a drag on the ..read more
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Policy support for car sales won’t ease trade tensions
Capital Economics » China Economics
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1M ago
The PBOC’s scrapping of the regulatory minimum down payment for car loans may help boost vehicle demand in the short run. But it won’t be enough to prevent a further increase in car exports, so ..read more
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Prop from stimulus to be short-lived
Capital Economics » China Economics
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1M ago
China’s economy has fared better recently and policy support is likely to remain a near-term prop to growth. But we remain less sanguine about the medium-term outlook ..read more
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