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Monetary Policy

A short-term recovery

Strengthening credit growth and economic activity in June may appear to suggest that China’s economy has bottomed out, but a closer analysis raises doubts about the sustainability of the recovery.

16 July 2014

China’s monetary policy shift

Recent targeted moves to boost base money supply suggest that China’s central bank is set on managing liquidity through direct measures aimed at specific sectors of the economy, rather than previously used market-wide injection tools such as rate cuts or RRR hikes

03 July 2014

Lessons from the liquidity squeeze

A year on from the severe liquidity squeeze in June 2013, bankers and market participants have been debating the lessons learned and examining why there wasn’t a repeat performance this year.

03 July 2014

A fragile recovery

Despite stronger PMI readings and some positive signs in our proprietary macro surveys in June, tight credit and ongoing private sector and real estate weakness continue to mitigate against an economic recovery.

03 July 2014

Stimulus through reform

Despite growing calls for an easing in credit conditions, we continue to believe that any ‘stimulus’ measures implemented by Beijing will fall within the parameters of broader reform efforts and are unlikely to provide an immediate boost to investment or growth.

22 May 2014

PBoC cuts rural bank RRR

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

24 April 2014

Desperately seeking stimulus

With few signs of genuine stimulus forthcoming, we continue to believe that a recovery in growth may still be some way off.

10 April 2014

Will inflation remain benign in 2014?

Chinese economists have been discussing the outlook for inflation and the likely implications for monetary policy in 2014.

16 January 2014

Tapering, Chinese-style

China is set to continue gently tightening liquidity during 2014 without allowing a money supply crunch to emerge. This is Beijing’s version of tapering. 

19 December 2013

China sees “reasonable” growth in 2014, targets government debt

China pledged at the end of a key conference in Beijing today to achieve “reasonable” economic growth in 2014 while pushing forward reforms to control local government debt and combat industrial overcapacity. We think that 7% is the most likely official target for GDP growth next year, a rate of expansion that could accommodate a forceful reform drive that may be directed particularly at industrial overcapacity and debt-ridden local governments.

13 December 2013

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