A string of ambitious commercial developments in county cities and towns across China is transforming consumer behavior at the intersection of city and countryside
Protected at home, China’s construction companies will have to modernise to realise global ambitions.
China's excavator sales dropped 46% YoY in March, compared to a drop of 33% YoY in the combined January-February period. We think the sluggish excavator sales add to indications of sub-par fixed-asset investment (FAI) growth (CC Feb 23 2012 Big Call ) caused by slowdowns or cancellations of projects by fiscally squeezed local governments and property developers after a welter of project launches in 2009/2010. However, with social housing construction expected to pick up gradually in 2012 (CC Apr 5 2012, Big Call), excavator sales should start to rebound somewhat in the coming months.
Financial malaise is slowing fixed-asset investment growth, adding pressure on Beijing for some sort of bailout.
Prices for cement, steel, and glass are all set to decline in 1H12 due to weak demand from a softening real estate sector as government credit restrictions persist.
The once-firm bond between state banks and state-owned transport infrastructure builders is fraying, throwing a key motivator of economic growth into doubt.
Land sales are so central to local government finances that their current slowdown suggests an easing in fixed-asset investment.
Our survey shows local government officials are acting strongly to implement Beijing's crackdown on excess industrial capacity but several factors are likely to erode the force of the policy several months from now.
Real estate transaction volumes have been slowing over the last month and we expect steel and iron ore prices to soften further in coming weeks, though we do not envisage a precipitous slump.
Real estate transactions from 21 cities weakened for the fourth consecutive week since further real estate tightening policies were released by the central government on April 17. The ripples have clearly begun to impact the steel industry, significantly dampening expectations of continued price hikes for construction steel and pausing the price recovery that has seen rebar prices grow by over 15% since the start of the year.
Renminbi Compass reflects key changes in the renminbi-denominated investment environment.
Providing research coverage on asset classes as diverse as chengtou bonds, dim sum bonds, real estate, trust products, underground banking, art and antiques, as well as its traditional equity fund research.
Renminbi Compass provides orientation for investors navigating the expanding universe of renminbi asset classes.