Trade

January new loans lower than expected

New loans extended by Chinese banks in January totalled Rmb 738.1bn, down from Rmb 1,026bn in January last year and undershooting market expectations that new loans would come in at above Rmb 1tn for the month. We think the lower than expected loan growth is largely due to the Chinese New Year holiday, which fell in January this year but in February in 2011, damping commercial activity for around a week at the end of the month. In our view, the slower loan growth may point to weakening investment activity and slightly slowing growth but does not signify a sharp slowdown.

China's imports and exports fell in January

China's import and export growth rate slowed sharply in January indicating weaker domestic and global demand. According to the statistics released by General Administration of Customs on Friday, China's seasonally adjusted export growth rate slowed to 10.3% on a year-on-year basis in January compared to 14.2% in December.

Keeping the energy flowing

Acupressure is the art of restoring energy flows by massaging pressure points in the body. Beijing’s current economic policy appears similar. The pressure points it is focused on include the property sector, the banking system and local government debts, and in all three of these key areas recent signs are showing a clear intent to ensure that energy keeps flowing.

China bans airlines from paying EU charges

The Chinese government this week banned its airlines from paying charges on carbon emissions imposed by European Union. China’s State Council (cabinet) and the Civil Aviation Administration of China (CAAC) prohibited all domestic carriers from joining the EU carbon emission trading scheme and from charging passengers extra based on it. How entrenched is Beijing’s position?

Redrawing the trade map

Trade with the emerging world starts 2012 in more robust shape than that with the west. Such trends are fundamentally altering China’s trade map.

China’s inflation suggests more liquidity easing

Inflation figures released today extend Beijing's license to ease liquidity policy further in coming weeks (CC Jan 12 Macro View) and further relieves manufacturers from the big margin squeeze that characterised 2011 (CC Jan 12 Consumer China).

Stimulus required

Though a repeat of the muscular Rmb4.0tn stimulus package seen in 2009-2010 is now hardly possible, the need for Beijing to inject extra vigour into consumer spending, exports and even fixed asset investments is slowly becoming clearer.

China trade figures underline need for consumer stimulus

Trade figures announced today underline the need in China for policies to stimulate consumer demand and spur exports. Growth in imports for domestic consumption halved to 13.5% in December YoY from November while imports for processing trade – mostly components destined for re-export – grew by 6.2% YoY, down from November’s 11% YoY rate. By contrast, import volumes of resources, including metal ores and oil, held up strongly during December.

Labour wages start to ease

Some migrant worker wages are starting to ease, raising profound implications for the economy.

Liquidity easing underway

Economy still slows, but outlook improves somewhat.

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09 Feb 2012

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