Country Insights

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Interpreting China’s economic results for 2021
CHINA FINANCIAL - Report 21 Jan 2022
Special points to highlight in this issue: * China’s reported GDP growth for 2021 of 8.1 percent was better than expected, mainly because of a very poor fourth quarter that came in nonetheless well above expectations. * There are enough questions about the data, however, that we w...

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Politics will drive economic performance in 2022
CHINA FINANCIAL - Report 07 Jan 2022
Special points to highlight in this issue: * The 20th National Congress of the Chinese Communist Party is scheduled for October or November of this year. This makes 2022 an especially important year politically for the Beijing leadership, making it unlikely that they will tolerate a poor econ...

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Today’s data release was better than expected, but not good
CHINA FINANCIAL - Report 15 Nov 2021 1 response
Special points to highlight in this issue: * Today’s data release was better than most analysts expected, but mainly because expectations for the month were very low. Growth in China continues to slow. * While consumption growth outpaced production growth in October, as it has for the pas...

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Slower third-quarter growth tells us about next year
CHINA FINANCIAL - Report 25 Oct 2021
Special points to highlight in this issue: * Chinese third quarter growth came in well below market expectations, but these expectations had always been unrealistically high. The latest data show just how important it is to understand the various components of Chinese growth and the inverse re...

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Why does Evergrande matter?
CHINA FINANCIAL - Report 30 Sep 2021 2 responses
Special points to highlight in this issue: * The Evergrande crisis is not the cause of anything. It is simply one of the most recent of a series of debt-related crises beginning with that of Baoshang Bank in May 2019. These include, most notably, Huarong, HNA, and soon enough by all accounts,...

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“Common prosperity” recognizes that the underlying problem is the distribution of income
CHINA FINANCIAL - Report 26 Aug 2021 3 responses
Special points to highlight in this issue: * “Common prosperity” is Beijing’s new buzz phrase. It is already being applied to so many policy announcements that it is hard to grasp its meaning and to differentiate it from previous buzz phrases like “rebalancing” and “dual circulation”. * I...

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Beijing is worried about debt, but more worried about slowing growth
CHINA FINANCIAL - Report 26 Jul 2021 1 response
• GDP growth in the second quarter continues to slow, but not by as much as many analysts seemed to think. • While I continue to expect China’s reported GDP growth for the year to be between 6 percent and 8 percent, I am starting to believe that it will be much closer to 8 percent than to 6 pe...

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Debt and growth are slowly stabilizing
CHINA FINANCIAL - Report 29 Jun 2021
• Analysts are increasingly worried that credit growth and economic activity are slowing at an unexpectedly rapid pace in China. I think however that this is mostly a consequence of their overly optimistic expectations for 2021, based on their misunderstanding of the way Beijing constructs and ac...

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Consumption is still weak and bond markets still confused
CHINA FINANCIAL - Report 17 May 2021
Special points to highlight in this issue: * While there is no question that China has an ugly demographic evolution ahead of it, much of the response by analysts and the press to last Tuesday’s census release has been overly apocalyptic. What matters far more than the simple demographic chan...

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The Two Sessions
CHINA FINANCIAL - Report 09 Mar 2021
Special points to highlight in this issue: • On Friday Li Keqiang announced that the GDP growth target for 2021 would be “above 6 percent”. This is well below consensus expectations for 2021 which, in my opinion, have always been too high. During the meeting Li Keqiang and other officials also ...

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Provincial data
CHINA FINANCIAL - Report 18 Feb 2021
Special points to highlight in this issue: • Although Beijing will probably not announce a GDP growth target during the Two Sessions this March, nearly every province in China has already done so, with an implied national growth rate for the year of 6.8 percent. • A recent BIS research report s...

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To boost 2020’s GDP, Beijing sharply increased all the things it has been trying to rein in
CHINA FINANCIAL - Report 18 Jan 2021
Special points to highlight in this issue: • Contrary to the triumphalist reading of the press, China’s 2020 GDP growth data were very problematic. While we all focus on the headline growth number, it is important to recognize that the Chinese economy in almost every important structural way has...

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Demand-side reform and long-term GDP growth
CHINA FINANCIAL - Report 17 Dec 2020 3 responses
Special points to highlight in this issue: * In its meeting last Friday the Politburo coined a new term, "demand-side reform", as something it would implement along with the “supply-side reforms” it has long promised. This is probably going to be a very important policy innovation that finall...

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How to think about China’s GDP growth in 2021
CHINA FINANCIAL - Report 20 Nov 2020
Special points to highlight in this issue: • Analysts are beginning to project a very strong recovery for Chinese growth next year based on their models for consumption growth. These were the same models that predicted earlier this year that 2020 GDP growth rates would be close to zero or substa...

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Why was Ant Financial cancelled?
CHINA FINANCIAL - Report 04 Nov 2020
Special points to highlight in this issue: • Thursday’s expected IPO of Ant Financial, dual-listed in Shanghai and Hong Kong, was suspended last night. It was an extremely visible transaction that would have been the largest IPO in history. • While there is a lot of speculation that the dec...