Update Alerts

Liquidity withdrawals continue

The People's Bank of China, the central bank, withdrew a further Rmb 84bn through open market operations this week, following a withdrawal of Rmb 81bn last week.

  • 30 July 2010

First tier city transaction volumes rise to highest level in three months

Real estate transaction volumes in first tier cities rose to their highest level in almost three months during the week ending July 28. Meanwhile, iron ore prices increased for the second consecutive week following a declining trend that has persisted for almost three months. Steel prices, however, were mixed - rebar's recent price rebound moderated, while hot and cold rolled coil prices continued to rise.

  • 29 July 2010

Central bank reverses trend of net injections as liquidity pressures ease

The People's Bank of China, the central bank, withdrew Rmb 81bn through open market operations this week, reversing the trend of net liquidity injections that has persisted for eight consecutive weeks. The move confirms our prediction (CC July 9 Update Alert) that the sharp liquidity shortage in the financial system would ease following the Agricultural Bank of China's IPO and the conclusion of the first half reporting period.

  • 23 July 2010

Scattered signs of potential loosening boost iron and steel prices

Iron ore and steel prices rose this week, breaking a declining trend which has persisted for almost three months. Sentiment was bolstered by scattered signs that tightening policies may ease to prevent a sharp downturn within the real estate market.

  • 22 July 2010

Liquidity injection shows dwindling inflation concerns

The People's Bank of China (PBoC), the central bank, injected Rmb 49bn through open market operations in the past week, down from Rmb 105bn injected in the previous week, bringing total injections during the last eight weeks to Rmb 937bn.

  • 16 July 2010

Real estate activity steady, steel prices continue slide

Real estate transaction volumes continued to fluctuate around current levels for the week ending July 14. The aggregate average daily transaction volume in first tier cities rose 18.6% to 75,491 sq m per day, while the value for 17 second tier cities rose a modest 7% to 239,135 sq m per day.

  • 15 July 2010

June economic data shows further slowing

China's economic growth slowed in the second quarter to 10.3%, down from 11.9% in Q1, according to data released by the National Bureau of Statistics today. Barring any major policy changes within the next three months, we expect GDP growth to continue moderating into the second half (CC July 15 Scenarios).

  • 15 July 2010

Injections continue, liquidity pressures easing

The People's Bank of China, central bank, injected a further Rmb 105bn through open market operations this week, according to data released Friday. Although this marks an increase from last week's Rmb 67bn, combined injections over the last two weeks are still down from mid-June levels suggesting that liquidity shortages are easing.

  • 09 July 2010

Uncertainty persists as new home transactions retreat

New home transaction volumes fell around 20% in 21 first and second tier cities during the week ending July 7, data from local land bureaus compiled by China Confidential shows. The drop off erased gains made last week (see CC July 1 Update Alert).

  • 08 July 2010

Liquidity injections into the banking system moderate

The People's Bank of China injected a further Rmb 67bn through open market operations this week, according to data released Friday. The injection was down from Rmb 211bn the previous week, as the need to address a liquidity shortage in the banking system eases entering July when the first half reporting period comes to pass.

  • 02 July 2010

Manufacturing growth slowdown confirms cooling phase

The moderation in Chinese manufacturing, according to figures released Thursday, reaffirms our call (CC April 22 and CC June 17 Editor's View) that the economy is in a cooling phase. Though we expect the slowdown to continue for much of the rest of the year, we do not envisage this turning into a precipitous slump.

  • 01 July 2010

New home sales volumes rebound slightly

New home transaction volumes rebounded slightly during the week ending June 30, data from local land bureaus compiled by China Confidential shows. Prices were mixed; though remain depressed from their peaks this year.

  • 01 July 2010

Central bank continues to boost liquidity to help banks

The People's Bank of China (PBoC), central bank, injected Rmb 211bn through open market operations this week, according to data released on Friday.

  • 25 June 2010

Shenzhen transacted home prices plummet

New home transaction prices in Shenzhen were down sharply during the two weeks ending June 23, while an average of prices across seven cities remained roughly flat during the period, local land bureau data compiled by China Confidential shows.

  • 24 June 2010

Renminbi policy shift politically motivated, no significant appreciation

China will introduce a more flexible exchange rate policy following a currency basket mechanism, but will not allow a 'large-scale' appreciation of the renminbi, it said in an statement at the weekend.

  • 21 June 2010

China's central bank injects liquidity to help banks

The People's Bank of China (PBoC), central bank, injected Rmb 166bn through open market operations this week, according to data released on Friday, to ease a shortage of liquidity in the banking system.

  • 11 June 2010

China data shows economy still in cooling trend

Official data released on Friday confirms cooling as the dominant trend in the Chinese economy, despite the rise of consumer price inflation above the government's 3% red line in May.

  • 11 June 2010

Prices of new homes sold down sharply

New home transaction prices during the week ending June 9 were down significantly from the peaks they hit between February and April this year, local land bureau data compiled by China Confidential shows. Transaction volumes during the week also fell sharply in first tier cities, compared to the same week last month, while transaction volumes in second tier cities remained stable over the period.

  • 10 June 2010

May CPI to exceed 3%

China's consumer price index for May is expected to rise 3.1% from a year earlier, according to a Reuters report today, citing three unnamed people who heard government officials state the figure at an investor conference. The inflation figure, should it be confirmed by the statistics bureau tomorrow, supports our call (CC June 03 Big Call) that May CPI will exceed 3% driven chiefly, in our opinion, by rising food price inflation, which accounts for over 30% of the index. We foresee food CPI to jump to around 6.5%-7.5% in May, up from 5.9% in April.

  • 09 June 2010

Small rebound in new home sales

New home transaction volumes in first tier cities and some second tier cities staged a small rebound in the week ending June 2, though prices were mixed, data from local land reserve bureaus shows. Uncertainty continues to prevail in the market as buyers and sellers attempt to wait out the period of lacklustre sentiment. We believe that this may persist for some time unless new policies are released.

  • 03 June 2010

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