Please see below selected recent intelligence about China. This is a synthesis of major recent developments at corporates, business schools, thinktanks, media, commentators, and other key influencers.
Q3 (July-August-September) 2016
- The former chief economist of the International Monetary Fund warned that a slowdown in China is the greatest threat to the global economy, claiming that a "hard landing" for one of the main engines of global growth could not be ruled out.
- However, China’s industrial profits jumped the most in three years. They rose 19.5% from a year ago to 534.8 billion yuan ($80.2 billion), according to the National Bureau of Statistics. The data suggests further stabilisation in manufacturing and a greater ability of companies to pay off debts.
- Indeed, China’s economy grew by 6.7% in the second quarter, the same as in the previous three months and a healthier pace than many had expected given the country’s stock market crash and depreciation of the yuan. Investment in infrastructure has surged and personal consumption has been strong.
- Although there is some suggestion that Chinese private sector is losing confidence in economic prospects, China’s producer price index was its least bad in four years. Government data tracking the cost of manufactured goods out the factory gate showed prices declined just 0.8% through the month of August, indicating that the flagging economy might be stabilizing. Consumer price inflation climbed 1.3%, slightly below July’s increase.
- Yet China’s July economic data provided more evidence of a slowdown. Investment grew at its slowest pace in more than 16 years in the January-July period. Retail sales in July increased 10.2%, versus a forecast 10.5% and down from 10.6% in June. Industrial output for the month rose 6% from a year earlier, slowing from 6.2% in June and missing the forecast of 6.1%.
- China’s “One Belt, One Road” project aims to make central Asia more connected to the world, yet even before the initiative was formally announced China had helped to redraw the energy map of the region. However, China is not the only investor in central Asian connectivity. Multilateral financial institutions, such as the Asian Development Bank, the European Bank for Reconstruction and Development and the World Bank have long been investing in the region’s infrastructure. The Kazakh government has its own $9bn stimulus plan, directing money from its sovereign wealth fund to infrastructure investment. Other countries, including Turkey, the US, and the EU have also made improving Eurasian connectivity a part of their foreign policy.
- China wants a role at the global economic governance table, commensurate with its size and trajectory. Existing bodies have been slow to reform. In a new paper, the Royal Institute for International Relations, argued that “In areas where the overhaul of existing bodies proves difficult, China has begun to back the creation of parallel nstitutions tailored to the needs of emerging powers.”
- There is widespread agreement on two facts about the Chinese economy, claimed Project Syndicate. First, the slowdown has ended and growth is picking up. Second, not all is well financially. But there is no agreement on what happens next. The good news is that domestic demand continues to grow. Car sales were up nearly 10% in March over the same month in 2015. And retail spending grew at an annual clip of 10% in the first quarter. The most dramatic increase, though, is in investment. Real estate investment is growing again, following its collapse in 2015. Industrial investment, especially by state-owned enterprises, has been rallying strongly. The bad news is that credit booms rarely end well: China’s strong credit flow is financing investment in steel and property, sectors already burdened by massive excess capacity. The companies doing the borrowing, in other words, are precisely those least capable of repaying.
- China's debt-to-GDP ratio has soared from 150% to nearly 260% over a decade, the kind of surge that is usually followed by a financial bust or an abrupt slowdown. China will not be an exception to that rule, warned The Economist.. Problem loans have doubled in two years and, officially, are already 5.5% of banks’ total lending. The reality is grimmer. Roughly two-fifths of new debt is swallowed by interest on existing loans. China requires more and more credit to generate less and less growth: it now takes nearly four yuan of new borrowing to generate one yuan of additional GDP, up from just over one yuan of credit before the financial crisis. With the government’s connivance, debt levels can probably keep climbing for a while, perhaps even for a few more years. But not for ever.
- Record-breaking growth in China’s overseas mergers and acquisitions is set to continue, with currency falls or economic slowdown unlikely to have a major effect. PwC China said that China saw 115 outbound M&A deals in the first quarter of 2016, worth $82.6 billion, around double the figure for the same period a year earlier. More than half the deals were done by private companies, a major growth sector — though state-owned companies still accounted for more than two-thirds of the total value.
- China's outbound investment is expected to continue to grow at over 10% and maintain this momentum for the next five years with the continuous promotion of the "Go Global" policy and the gradual implementation of the national strategies of the Belt and Road initiative as well as "Made in China 2025," according to EY's Global China Overseas Investment Network Leader
- China is facing the difficult task of managing a soft economic landing, after decades of spectacular expansion. Naysayers abound, but never mind them, said McKinsey. China has an advantage that other countries in today’s troubled global economy lack: a clear path forward. If China carries out a sustained, comprehensive effort to raise productivity, it can address its growth challenges, reduce the risks of financial crisis, and complete its transition to a consumption-driven, high-income economy with a large and affluent middle class. If it does, its annual GDP could be an estimated $5 trillion larger by 2030 than it is likely to be if policymakers continue to pursue investment-led growth.
- There was better economic news in China’s latest trade figures. Exports from the country grew by 18.7% in March compared with a year earlier, the biggest increase for 13 months. Imports fell by 1.7% - less than expected - prompting hopes that manufacturing is recovering. However, the results looked good only in comparison with bleak 2015 figures.
- China adopted its 13th Five Year Plan last month, outlining its goals, principles and targets for its development through to 2020. The Plan sets an annual GDP growth target of 6.5% over the next 5 years and reflects a move towards domestic consumption, innovation and entrepreneurship in seeking to achieve a more balanced and sustainable economic development. Innovation is not a new theme in China’s 5 year plans, but it has taken on greater significance in this one. “Innovation-driven development” is repeatedly referred to as a new driver for China’s economic growth.The size and increasing global influence of China’s economy means the Plan has significant implications for businesses in China, and around the world.
- China will invest more in the country's high-tech research and development, as well as infrastructure development, including railway, fixed assets, water conservancy projects, according to China Daily. Total investment is estimated to exceed 6 trillion yuan ($926.6 billion) in 2016, half of which will be special funds targeting projects such as transportation, environment protection, urban planning, and tourism.
- Meanwhile, China firms expected to invest $20 billion to $30 billion in the US. in 2016 but increased scrutiny could hurt deal flows. Experts say the pace is already slowing as politicians and regulators look harder to Chinese investment.
- Emerging markets such as China pose a growing risk to advanced economies with events in developing economies increasingly responsible for price movements in financial markets in richer countries, the IMF warned. Moreover, markets were only just beginning to feel what was likely to be the growing impact of China in the years to come as its financial links with the rest of the global economy increase, IMF economists said.
- China’s official Purchasing Managers' Index rose to 50.2 in March, up from February's 49 but still only marginally above the 50-point mark separating growth from contraction. The expansion was the first time in nine months adding to hopes that downward pressure on the world's second-largest economy is easing.
- Chinese industrial profits grew by 4.8% to 780.7 billion yuan ($US119.8 billion) in January and February compared with the same period a year earlier, marking the first annual increase recorded in seven months. Although it is the fastest annual acceleration seen since mid-2014, an analyst noted that the headline may have been flattered by a weak performance seen over the same period in 2015.
- Recent headlines about China’s slowing growth and its efforts to contain stock market bubbles and devalue its currency seem to be cause for concern. Yet this only tells part of the story. The Chinese economy is undergoing a profound shift as it matures from export-led growth to higher-value activities and domestic consumption and services. The challenge is that China is no longer one vast emerging market, as it has been viewed in the past. Demand for products and services, along with growth itself, varies greatly across sectors, populations, and geographic regions. Find out more in PwC's GMC blog about the implications of this shift for companies and three guiding principles for winning in China's changing economy.
- Chinese lawmakers approved the country's economic and social development blueprint for the 2016-2020 period, which sets targeted average annual economic growth at above 6.5% in the next five years. China has set 2020 as the target year to realise the "centenary goal" of building a moderately prosperous society in all respects, pledging efforts to double GDP and per capita personal income from the 2010 level before the Communist Party of China's 100th anniversary of founding in 2021.
- According to Eurasia Group, with all the attention to the conflicts in the Middle East, the political crises in Europe, and the unfolding circus of the US Presidential elections, it’s easy to forget that by far the biggest structural change in the global system is the rise of China - nothing else comes close. A more influential China that doesn’t share American values or priorities, either with strong signs of succeeding or failing, is what Eurasia sees as the world’s top risk for 2021.
- With China's economic miracle under threat from a slowing economy and a dwindling labour force, the Financial Times investigated how the world's most populous country has reached a critical new chapter in its history.
- KPMG’s new report, 'China Outlook 2016', looked at the implications of China's transition from an investment-intensive, export-led model of growth, to one driven by consumption and innovation. Its impact on inward foreign direction investment (FDI) and outward direct investment (ODI) is also examined.
- Asking itself, how worrying are China’s debts, The Economist concluded that they are certainly enormous. At the end of 2015 the country’s total debt reached about 240% of GDP. Private debt, at 200% of GDP, is only slightly lower than it was in Japan at the onset of its lost decades, in 1991, and well above the level in America on the eve of the financial crisis of 2007-08. Sooner or later China will have to reduce this pile of debt. History suggests that the process of deleveraging will be painful, and not just for the Chinese.
- The Economist also warned that .
- Financial reporting in China was back in the spotlight, with one strategist claiming Chinese businesses were using "accounting trickery" to mask underlying credit problems. China looks like it's heading towards a credit bust, Chris Watling, CEO and chief market strategist at Longview Economics told CNBC, explaining that cash borrowed by mainland firms is primarily being used to service debts.
- Indeed, personal debt levels are creeping uncomfortably high for consumers across Asia - and Chinese millennials are being particularly squeezed. In China, a typical person aged in the mid-20s to mid-30s and living independently, has a debt of $21,650, excluding mortgage, which equates to 14.3 times the average monthly income – the highest ratio in the region, according to new research from Manulife Asset Management. For those aged 35 or over, this rises to 18.5 times according to the Financial Times. The average across Asia is 7.1 times.
- Perhaps unsurprising then that Moody’s warned it may downgrade China’s sovereign rating, a sign of increasing investor concern over the country’s rising debt and dwindling foreign exchange reserves. The US rating agency revised its outlook on China from stable to negative, the first major step on the country by a rating agency since Fitch downgraded its rating three years ago, the first cut since 1999.
- China aims to lay off 5-6 million state workers over the next two to three years as part of efforts to curb industrial overcapacity and pollution, sources told Reuters, in Beijing's boldest retrenchment programme in almost two decades. China's leadership, obsessed with maintaining stability and making sure redundancies do not lead to unrest, will spend nearly 150 billion yuan (US$23 billion) to cover lay-offs in just the coal and steel sectors in the next two-three years.
- China’s central bank has stepped up action to bolster its cooling economy by loosening the rules on banks’ cash reserves in the hope that they will offer cheaper loans. By cutting the reserve requirement ratio - the amount of cash that banks must hold as reserves – the People’s Bank of China has in effect injected $100bn (£72bn) of long-term cash into the economy, experts said.
- Provincial economies in China that once thrived on the exploitation of their rich natural resources are currently experiencing a protracted slowdown, earned the EIU. A weakening in domestic commodity demand and a subsequent slump in prices have crimped economic activity and exposed structural weaknesses. These provinces will continue to face headwinds in the coming years unless they can implement reforms to diversify their economies - read more.
- Further significant recent developments: Premier Li Keqiang has said that China will continue its financial reform and will not seek to boost its economy through currency depreciation; China has further loosened controls over investment of Qualified Foreign Institutional Investors (QFII) to further the opening of the domestic capital market; ghost cities which are dotting the Chinese landscape are an eerie reminder of country’s failed ambitions
- China’s foreign-exchange reserves fell again in January 2016 as the central bank tapped its pile of dollars to prop up the yuan. The reserves dropped by $100 billion to the lowest level in nearly four years. However, China's foreign exchange reserves are huge. Even after the latest drop, they stand at US$3.2trn, meaning that China could stand another few years of such drops before running out.
- China is rapidly losing the confidence of global lenders and capital outflows risk turning virulent if the current policy paralysis continues, the world’s top banking body has warned. “There is a perception that the renminbi could weaken drastically,” said a managing-director of the Institute of International Finance in Washington.
- However, the UK Treasury's commercial secretary Jim O'Neill expressed his optimism about China's economic growth despite the world's second largest economy slowed to a 25-year low of 6.9 percent in 2015. China is definitely still on track in terms of its real GDP growth, said O'Neill, who is known for the creation of BRICs acronym. China's 6.9 percent growth is the equivalent to India growing by nearly 35 percent or the United Kingdom growing by nearly 22 percent. So 6.9 percent is the envy of any developed country, he said in an interview.
- Global financial markets made a very nervous start to the year, in large part driven by worries about the underlying strength of the Chinese economy, found Oxford Economics. However, China’s still underdeveloped stock market is typically not driven by economic fundamentals. Moreover, recent data do not indicate a significant weakening. Officially reported GDP growth eased to 6.8% in Q4, while OE's alternative, bottom-up, estimate of GDP showed growth of 6.1% in Q4 (6.3% on average in 2015); both measures point to only a relatively gradual slowdown.
- Over the past few months, China has increasingly made headlines in global news, creating a constant stream of articles, background reports and opinion pieces on the state of the economy and the currency. In the midst of all these developments, it may have been challenging to keep an eye on China’s long-term goals, ambitions and initiatives; most notably, the significant efforts China’s leadership is putting into its ‘Going Global’ strategy, of which the ‘Belt and Road’ (B&R) initiative is an integral part. B&R is likely to shape both China’s national economic development strategy and international activities for the years to come and expected to feature prominently in China’s next five-year plan, which will be released this year. This initiative is not only restricted to China, but involves close to 65 countries, covering more than half the world’s population. While B&R is still at an initial stage, PwC's Growth Markets Centre’s (GMC) research and interviews provide preliminary insights into the initiative and the possible implications in China and abroad. Here is the GMC's latest report on this initiative: https://www.pwc.com/gx/en/issues/high-growth-markets/publications/china-new-silk-route.html
- Strategy& analysis found that China’s markets are largely disconnected from the real economy and are a poor leading indicator. Their total market value represents only about 40% of GDP, and individual retail investors account for as much as 90 percent of daily transactions. In addition, traded stocks are heavily skewed toward the manufacturing and construction sectors, and Chinese firms rely far more on the banking system to raise capital. Nevertheless, all is obviously not well in China. GDP growth has slowed significantly, debt levels are still increasing, and capital efficiency is unacceptably low. At the same time, overcapacity has reached dangerous levels in sectors such as steel, glass, and cement. And although it continues to exercise strong systemic control over the economy, Beijing is rapidly depleting its cash reserves as it tries to prevent the yuan from devaluing too quickly. As a result, most mainstream economists believe that China urgently needs to “rebalance” by implementing structural reforms and moving to a more market-based economy.
- Forecast economic growth in 2016 is premised on continued monetary and fiscal policy support from the authorities, claimed the EIU. The budget deficit is forecast to widen to the equivalent of 3.2% of GDP in 2016, from an estimated 2.8% in 2015. Meanwhile, the People’s Bank of China (the central bank) is expected to retain its currently accommodative monetary policy stance until the second half of 2017. We do not forecast further cuts to benchmark interest rates, which are already at record lows, but additional loosening of the reserve requirement ratio and ongoing liquidity injections by the PBC are likely.
- The Financial Times warned that while Chinese policymakers have a stellar reputation for the quality of economic management but the same was true of the Japanese three decades ago. For the Japanese, the difficulty of shifting from their high-savings, high-investment, “catch-up” economic model proved very large. Indeed, this has still not been completed. While the Chinese economy has far more room to grow than Japan a quarter of a century ago, its disequilibria are even bigger. Moreover, contrary to conventional wisdom, the transition to a new pattern of growth has not really begun.
- Total debt in China is close to 300% of GDP and continues to rise rapidly as the government looks to promote steady growth. How the government chooses to deal with this level of debt will have enormous implications for the future of the Chinese economy - but unfortunately the big problem for China, argued The Economist, is that its government is not built to cope with such economic strain.
- The Where Is the Chinese Economy Heading? session in Davos asked: with a new Five-Year Plan being presented in 2016, how can the world’s second-largest economy shift gears without stalling its growth engine?
- China's economy grew by 6.9% in 2015, compared with 7.3% a year earlier, marking its slowest growth in a quarter of a century. China's growth, seen as a driver of the global economy, is a major concern for investors around the world. Beijing had set an official growth target of "about 7%" for the world's second-largest economy. Chinese Premier Li Keqiang has said weaker growth would be acceptable as long as enough new jobs were created. But some observers say its growth is actually much weaker than official data suggests, though Beijing denies numbers are being inflated. Analysts said any growth below 6.8% would likely fuel calls for further economic stimulus. Economic growth in the final quarter of 2015 edged down to 6.8%, according to the country's national bureau of statistics.
- China set up a new cabinet office to co-ordinate financial and economic policy, for the Financial Times a tacit admission that its ad hoc and disjointed policymaking is failing. China’s market regulator and central bank have come under intense criticism for their fumbled handling of this year’s meltdown on the stock market that reverberated around the globe. Government agencies further incensed investors globally by sending conflicting signals over management of the renminbi.
- In 'The Simple Truth About China’s Market', Bloomberg argued that it is not just clumsy trading rules that have made the country's stocks so risky. Those rules have taken much of the blame for China’s latest market chaos. The China Securities Regulatory Commission said they had a “magnet effect” - as shares fell, people may have rushed to get sell orders in while they still could, pulling prices down to the trigger point even faster. The focus on poorly designed trading curbs may, however, distract from a less exotic source of risk: speculation. The median stock on mainland exchanges still trades at about 57 times earnings - at least twice as expensive as any other major market.
- China started 2016 with two mini stock market crashes and a 0.5% currency devaluation. So for Business Insider it came as no surprise that Charlene Chu, an analyst known the world over for making sense of China's complex shadow-banking system, has a grim outlook for the year. Her reports are considered one of Wall Street's most valuable commodities. The latest is ominously titled "Something's Gotta Give." From Chu's perspective, the something that must give in 2016 is going to have to be the Chinese yuan.
- The Economist noted that some Chinese reformers believe that China has wasted natural resources, damaged its environment, piled up excess capacity and missed opportunities to fix its economic model.
- A new analysis by McKinsey outlined the growth prospects in China in 2016 and the major challenges the country will face.
- Trading on China's stock markets was suspended after the market dramatically plunged and triggered a new system meant to limit volatility. The benchmark Shanghai Composite index fell 6.9% while the blue-chip CSI 300 Index dropped 7%. The technology-heavy Shenzhen Composite was the worst performer and fell by more than 8%. Trading had been halted earlier in the day for 15 minutes after the stock market fell by 5%. But shares continued to fall, leading regulators to end trading early.
- The Chinese authorities then battled to prop up the country’s stock markets after a surprise cash injection from the central bank failed to calm jitters among investors. The unexpected 130 billion yuan ($19.94 billion) injection by the central bank was the largest such move to encourage more borrowing since September 2015. However, newly minted circuit breakers, introduced and first tripped on Monday, kicked in again on Thursday after the CSI 300 fell 7 per cent. Trading was halted for 15 minutes after the index lost 5 per cent, but as stocks continued to fall the full-day closure was triggered.
- The Financial Times explained that China is not helped by the make-up of its markets, where up to 90% of trading is carried out by retail investors. That partly explains the extreme swings in prices.
- In 2016 China will once again be hugely important in determining the path of the world economy and the direction of capital flows. But this time the story will not be about a slowing economy. As recent industrial production numbers indicate, measures to stimulate the economy are having an impact. Investment is picking up in response to stronger infrastructure investment, especially from local governments, reflecting the easing of financing constraints on them. State-owned enterprises have also been investing more heavily.
- Equities across the globe were undermined by losses in mainland China after a near 3 per cent drop on the Shanghai exchange triggered fresh commodity losses. As many markets reopened following the Christmas weekend break, China’s Shanghai Composite fell 2.6 per cent after weak industrial profit data for November dashed hopes of an end-of-year rally. The data, released on Sunday, showed profits earned by Chinese industrial companies fell 1.4 per cent last month - a sixth-consecutive month of year-on-year declines.
- China’s activity data was stronger than expected in November, with factory output growth picking up to a five-month high, signalling that a flurry of stimulus measures from Beijing may have put a floor under a fragile economy. Still, analysts believe more policy steps are needed to weather nagging headwinds from a cooling property market, risks from high domestic debt levels, and weak global demand as financial markets brace for interest rate rises by the US Federal Reserve.
- Meanwhile, foreign direct investment (FDI) into the Chinese mainland rose 1.9 percent year on year to 64.9 billion yuan ($10.4 billion) in November, the Ministry of Commerce said. The growth slowed from a 4.2 percent rise in October. or the first 11 months, FDI, which excludes investment in the financial sector, stood at 704.3 billion yuan, up 7.9 percent from the same period last year.
- Activity in China's services sector expanded at a slower pace in November as new orders weakened. The Caixin/Markit Purchasing Managers' Index fell to 51.2 in November from a three-month high in October of 52.0. A reading above 50 points signifies growth on a monthly basis, while one below that points to a contraction.New business rose at a slower pace of 51.1 - down from 52.9 in October - showing weaker domestic and external demand while employment in services rose only marginally, with the smallest increase in three months.
- China's foreign trade dropped 4.5%year on year to 2.16 trillion yuan (337 billion U.S. dollars) in November, the ninth-consecutive monthly decline. China’s foreign-exchange hoard meanwhile fell in November to its lowest level in more than two years, reigniting concerns about Beijing’s ability to stem the outflow of capital from the world’s second-largest economy.
- A report by Standard & Poor’s warned that creditworthiness at China’s big state firms has worsened in recent years. The ratio of gross debt to earnings has increased to more than five on average.
- The latest snapshot of manufacturing activity by the Chinese Federation for Logistics and Purchasing showed activity slipping for the fourth month in a row, falling further below the 50 no-change mark to 49.6 in November from 49.8 the previous month. Economists at ANZ Bank said the data could prompt yet another rate cut from China's policymakers.
- In a sign of growing confidence that China's stock markets are stabilising, the country's securities regulator lifted an order that required brokerages each day to buy more shares than they sell for any proprietary trading. But China's crackdown on financial markets in the wake of a stock slump in the summer continued as anti-corruption investigators opened probes into two of China's largest brokerages and censured four insurance executives.
- Mainland China’s overseas direct investment increased by 16.3% in the first 10 months of 2015 from a year earlier to $92.5 billion, the Ministry of Commerce said, underscoring the country’s growing international economic clout.
- Capital flowed into China last month for the first time since an unexpected currency devaluation in August shook investor confidence in the economy, easing fears over financial stability following an unprecedented bout of outflows.
- China's Next Opportunity - Sustainable Economic Transition is a report by Paulson Institute on sustainable growth in China, with a focus on the City Cluster of Beijing-Tianjin-Hebei as a case study.
- Another poor month for Chinese trade sparked debate about whether the government will have to do more to stimulate the economy. Exports fell by 6.9%, in dollar terms, in October from the same month last year and imports were down by 18.8%. The figures for both measures were much worse than analysts had forecast. Industrial production also grew by less than had been expected.
- Nevertheless the Communist Party and the national government set a 6.5%target for annual economic growth from 2016 to 2020. The announcement was an apparent attempt to temper expectations that China's slowing economy will rebound to anything near the double-digit growth of recent decades.
- New data out this week sheds some more light on the dynamics of the pressures facing China's industrial sector. Industrial profits are down 1.7% on last year, according to the most recent data - EIU, 29th October 2015
- How big a risk does the slowing Chinese economy pose? - PwC, 28th October 2015
- In the third quarter the Chinese economy grew by just 6.9% year-on-year according to official data, and probably by a percentage point or two less in reality. Yet bank loans increased by 15.4% in the third quarter compared with the same period in 2014. Having released a torrent of credit to buoy the economy during the financial crisis, China - The Economist, 24th October 2015
- China’s investment into Africa appears to be another casualty of the slowdown in the world’s second-largest economy. Chinese cross-border investment in greenfield projects and in expansion of existing projects in Africa fell by 84% in the first half of this year compared with a year earlier, from $3.54bn to $568m - Financial Times, 21st October 2015
- As China weakens, recession stalks North Asia - Reuters, 21st October 2015
- China's commodity companies are drowning in a sea of debt" - Business Insider, 21st October 2015
- China’s statistics bureau said on Monday that gross domestic product rose 6.9 per cent in the third quarter in inflation-adjusted terms, down from 7 per cent in the first two quarters and 7.3 per cent for full-year 2014. It was the slowest quarterly growth rate since the first quarter of 2009 but higher than expectations of 6.7 per cent in a Bloomberg poll - Financial Times, 20th October 2015
- China’s exports fell by 3.7% in September, in dollar terms, compared with the same month last year and imports were down by 21%, raising more concerns about the country’s slowing economy. However, China’s imports of some commodities, such as copper, have increased by volume on some measures, adding to the uncertainty about how fast the economy is actually growing - The Economist, 17th October 2015
- PwC's own Economics team launched its monthly Global Economy Watch for October. This month, our economists focused on China’s slowing economy as policymakers manage the rapid cooling of its debt-fuelled property market, and analyse how this poses a major challenge for some economies.
- "China's new path to sustained growth" argued that there will be increasing demand from China for high-quality services and high-tech products, and China’s outbound investment will be more active. Indeed, especially in trade in services and two-way investment, the possibilities for strengthening cooperation between China and the U.S. are almost limitless - Bloomberg Views
- China capital outflows hit record in August on yuan weakness - Business Times
- Chinese authorities are facing a slowing economy and a slump in share prices that has alarmed global investors - Financial Times, 16th September 2015
- Growth in China's investment and factory output in August has come in below forecasts, in a further indication that the world's second-largest economy is losing steam - BBC, 13th September 2015
- Trade data suggested a big decline in China’s imports and exports in August. The central bank said that its foreign-exchange reserves dropped by a record $94 billion last month, due to interventions in currency markets - The Economist, 11th September 2015
- China leading world towards global economic recession, warns Citi - The Telegraph, 9th September 2015
- China’s Exports Down 6.1% In August, Imports Fall 14.3%, But Trade Surplus Sharply Up - International Business Times, 8th September 2015
- Rising labour cost in China is one reason why companies are looking elsewhere for manufacturing activities - EJ Insight
- Will the past week be remembered as the one that put an end to China’s rise? - Eurasia Group, 31st August 2015
- China's Slowdown - Financial Times, 26th August 2015
- Chinese stocks plunged more than 8% in panic selling, with flagship indexes smashing key support levels and posting their biggest one-day percentage losses since the height of the global financial crisis in 2007 - Reuters, 24th August 2015
- China’s stockmarkets remained turbulent, including a 6% plunge in the Shanghai Composite Index on August 18th - The Economist, 23rd August 2015
- Still plenty of concern about china's markets, as the shanghai composite index suffered another round of serious drops last week - Eurasia Group, 03 August 2015
- Corporate giants sound profits alarm over China slowdown - Financial Times, 30th July 2015
- Lagarde plays down China stock jitters - Financial Times, 28th July 2015
- China stocks take the lead in Asian markets recovery - CNBC, 29th July 2015
- China markets rout resumes with 8.5% Shanghai sell-off - Financial Times, 28th July 2015
- Beijing faces dilemma after China stock market rout - Financial Times, 28th July 2015
- Despite some subsequent correction, the Shanghai Composite and Shenzhen Composite both initially plunged about 30% from their highs due to concerns that Chinese stocks are in a bubble. As one tweeter put it, "China has lost 15 Greeces in market cap in three weeks".
- Indeed, the Chinese government intervened to try to stem the popping of a stockmarket bubble. While the impact on the real economy in the short term is likely to be slight, for the EIU there are two big reasons to be more pessimistic longer-term. The first is that the Chinese leadership firmly stamped their names on the intervention. It looks to be their first major misstep, and could be the precursor to some internal wrangling. The second is what the intervention says about the likelihood of medium-term economic reform: certainly it does not seem to reflect policymakers committed to giving markets a 'decisive' role, as promised in 2013 by the Chinese Communist Party government.
- In short, a number of respected commentators are now advising that, despite the understandable short-term focus on Greece, we should be paying at least as much attention to China, not least because there are other weak signals emerging in the wider Asia region - e.g. global manufacturing activity slowed and edged closer to stagnation in June, with Asia lying at the centre of global manufacturing weakness; factories there reported a fourth successive monthly deterioration in business conditions.