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Chinese home sales record further falls

23 Apr

Home sales continue to weaken amid signs of oversupply in smaller cities

Latest metrics point to controlled renminbi depreciation

22 Apr

The latest official and market data monitored by China Confidential suggests that the depreciation of the renminbi against the US dollar seen so far this year has had a tangible impact on fund flows and market movements across a range of metrics, but remains broadly under the central bank’s control, with little sign of uncontrolled capital flight or investor panic. Weakening economic fundamentals and continued external uncertainty will continue to pose challenges in the coming months, however.

Weak investment drags down 1Q14 GDP

16 Apr

Weak investment growth and tight credit conditions contributed to a slowdown in Chinese GDP growth to 7.4% YoY in 1Q14, down from 7.7% YoY in 4Q13, in line with our indications of an investment-led slowdown since the start of the year. Despite signs of short-term infrastructure support, we continue to expect tight credit conditions and property market weakness to weigh on growth rates in 2Q14, barring signs of genuine, large-scale stimulus, which we have yet to see.

Latest report

24 April 2014

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The Big Call

Special Report: Slowdown ahead for car sales

Our survey of 106 car dealerships in 22 cities nationwide points to a slowdown in sales volume growth in 2014, but a growing preference for larger cars among second-time buyers should continue to support robust industry revenue growth.

Consumer China

Special Report: Winners and losers in China’s shifting auto market

Despite slowing headline sales growth, manufacturers with exposure to fast-growing market segments, especially joint ventures manufacturing locally made foreign-brand vehicles, should continue to grow in the coming years.

Guangzhou Automobile – buoyed by Japanese brand recovery

The recovery in sales of Japanese-brand cars in China has buoyed Guangzhou Automobile Group, which derives over three-quarters of sales from joint ventures with Japanese manufacturers.

Geely – facing stiff headwinds

The domestic automaker faces a challenge to turn around sluggish sales at home and abroad due to intensifying competition and the short-term negative impact of a rebranding process.

BYD – electric ambitions tempered by sluggish sales

Despite government subsidies and an expanded line-up of hybrid and plug-in vehicles, lower demand for its traditional fuel vehicles is likely to drag down BYD’s overall sales growth this year.

Brilliance – benefiting from rising entry-level BMW demand

Strong sales of entry-level 3-series models and expanded production capacity should support double-digit sales growth for BMW’s Chinese joint-venture partner in 2014.

SAIC – margin pressure despite strong volume growth

China’s largest automaker looks set to exceed its 2014 sales volume target, but an unfavourable product mix may hold down revenue growth and squeeze margins.

Capital Intensive China

Worst yet to come for China’s construction sector

Falling property sales have not yet fed through into weaker construction activity, suggesting a gloomy outlook for 2Q14.

Best of Chinese Commentators

Hong Kong-Shanghai investment pilot announced

Mainland fund managers and analysts assess the significance of a recently announced pilot scheme permitting investors to trade eligible stocks on both the Hong Kong and Shanghai bourses.

PBoC cuts rural bank RRR

Economists mull the implications of the central bank’s reduction of the deposit reserve requirement ratio for rural banks.

Report archive

Outbound tourism: China’s hottest export

China Confidential’s second annual survey of 1,257 outbound Chinese tourists and 37 travel agencies shows that Chinese tourists are travelling abroad in greater numbers and more frequently than ever before. Based on our survey results and official data, we estimate that total Chinese outbound spending in 2014 is likely to hit Rmb3.1tn ($513bn), up from Rmb2.8tn in 2013 and Rmb2.2tn in 2012.

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VIDEO

China is reining in capital investments as the authorities show their determination to slow credit growth. Rafael Halpin, Director of Capital Intensive at China Confidential, explains to John Authers the scale and the implications of China's slowdown.

 

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