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Tight credit undermining real estate investment

The continued weakening in real estate investment, despite a rebound in home sales, is largely due to tight credit rather than supply-demand factors. Sustained limited credit could curtail the current housing recovery and prevent it from filtering through into the wider economy.

21 May 2015

Policy shifts ease local debt risks

Recent moves to provide short-term support for existing local government financing – in contrast to previous attempt push through rapid reform of local financing models – should reduce the default risks posed by the estimated Rmb3.3tn in local government debt due to mature this year.

21 May 2015

Beijing’s pragmatism

The relaxation of restrictions on local government financing demonstrates that Beijing is taking an increasingly pragmatic approach to balancing growth and reform.

21 May 2015

Selected financial charts

A selection of key financial data over the past fortnight

21 May 2015

Credit weakness makes further easing likely

Credit growth declined in April, with the sum of total social financing (TSF) – the widest official measure of financing in the economy – and our estimate of underground lending falling to Rmb1,387bn in April, down 5% MoM and 21% YoY, respectively. The fact that formal loan growth remained weak despite recent easing moves suggests further policy loosening is likely.

13 May 2015

Shanghai-Hong Kong Connect investors favour dual-listed stocks

The recent surge in trading via the Shanghai-Hong Kong Stock Connect scheme has primarily been focused on eligible large-cap, dual-listed stocks on both bourses.

12 May 2015

QE with Chinese characteristics?

Domestic analysts and economists assess reports that China may launch liquidity injections similar in nature to the quantitative easing schemes implemented in Western economies.

07 May 2015

Domestic views on the A-share bull market

Mainland investors have been assessing the latest frenzied developments on Chinese stock markets.

23 April 2015

Assessing the latest RRR cut

Mainland economists assess the implications of the central bank’s latest RRR cut.

23 April 2015

Chinese banks in a period of transition

The weakening economy and a series of structural financial reforms have resulted in rising bad debt and slowing profit growth for Chinese banks, a trend likely to continue this year. However, growing support from regulators should enable a smoother long-term transformation of their role within the Chinese economy.

23 April 2015

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