Category Archives: China
Yesterday I did a blog post asking which central banker will spike the punch bowl this week? This morning around 7am east coast N America we got the answer: the PBoC -so far. In a surprise move the PBoC lowered reserve requirement ratio for banks a full 1% (that’s a fair bit). Loads of yummy risk-seeking liquidity came /will come into global markets. Unfortunately […] Read the rest of this entry
Last night around 2:20am N America time saw the PBoC (the National Team) intervene to prop up global asset markets again. Your free markets at work.
It seems a sub-50 read on the September manufacturing PMI is not going to happen, but you have to like the chances for October, November and December.
A flash estimate (preliminary) of China’s manufacturing PMI will be posted tonight. There is apparently growing fear we see a reading less than 50 for September. Here is where we are now…. There does seem to be a supportable trend, and it’s not “your friend”. Given the July reading was such a large stretch above trend, I don’t think anyone should be surprised to […] Read the rest of this entry
The China manufacturing PMI data for October just came out. Guess what? The trend is still not your friend. It’s OK if China’s manufacturing sector stagnates or even very slowly contracts because the economy needs to gradually shift from being heavily reliant on exporting manufactured goods to increasingly driven by domestic consumption. But that transition has to be slow and smooth. No easy feat. […] Read the rest of this entry
Having posted an estimate for U.S. GDP yesterday, all eyes have since been on China’s July manufacturing data. The Chinese government claims the manufacturing sector grew modestly in July, but the HSBC data suggests it actually continued to fall. The trend over the past 3.5 years continues — according to HSBC. Since the HSBC data is focussed on privately owned businesses, and the Chinese […] Read the rest of this entry
In last week’s China update blog posting, I had a chart showing the Purchasing Manager’s Index (PMI) with April’s reading estimated at 51.0. The April PMI was just announced. I was optimistic. Who knew? A 50.5 showed up. This means the manufacturing sector (in China) is likely still growing, but not by much. And that trend line is really not your friend.
Q1 GDP came in at +7.7%. Enviable indeed, but lower than the 8.0% anticipated, and lower than the Q4 7.9% rate. Continued slowing the in the Chinese economy will be felt in commodity exporter countries: Australia, New Zealand, Brazil, and Canada. Manufacturing continues to obey the same shallow declining trend line. April’s PMI data will be out next week (and in next week’s newsletter). Wednesday […] Read the rest of this entry
You cannot discuss China’s economy without having a discussion (or debate) about whether China will make a gradual and controlled transition towards a more consumption-driven economy (the “soft landing”) or not. The jury is still out. The most recent data continues to obey the linear regression of a gradual slowdown in manufacturing. If China manages to adhere to this line, the soft landing […] Read the rest of this entry
(Important) Housekeeping comments: 1. We’re approaching the date when we will combine 2 weekly email letters into 1. The new letter will contain a very brief summary and website link to facilitate login and access to the entire letter (economic news and data, analysis, the greedometers, and details on the specific investments we plan to buy / sell.) 2. An interactive greedometer gauge […] Read the rest of this entry