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Asia

What's Really Ailing China?
The conventional wisdom is that China’s economy is overly indebted and too reliant on residential construction and exports as drivers of growth. While there is much truth to these claims, they ignore the underlying problem ailing China: excess savings. …
Daily Insights
China-Related Assets: Not Yet Priced For A Further Slowdown In China
The above chart illustrates the BCA Market-Based China Growth Indicator, which is made up of 17 series grouped into four asset class subcomponents: currencies, commodities, equities, and rates/fixed-income. The purpose of the indicator is to act as a broad…
Daily Insights
Emerging Divergence In Stimulus Profiles Of The US And China
The fiscal impulse philosophies of the two largest economies of the world are set to pull in opposite directions in 2023. After the massive fiscal stimulus of 2020, the US had been cutting back on its deficit. But US fiscal policy is no longer restrictive.…
Daily Insights
China’s Foreign Policy Fire and Ice
On Monday, Asia Pacific equity markets closed in the red due to the news that China’s largest real estate developer, Country Garden, is suspending the trading of some of its bonds. This recent episode is a continuation of Chinese economic woes, which our…
Daily Insights
Chinese Credit Growth Disappoints In July
Chinese credit and money data fell significantly below expectations in July. The CNY 0.53 trillion increase in aggregate social financing marks a significant slowdown from CNY 4.22 trillion in June and came in significantly below expectations of CNY 1.10…
Daily Insights
China: Implications Of US Tech Ban
On Wednesday, President Joe Biden announced that a new ban on some US investment into China’s quantum computing, advanced chips and artificial intelligence sectors will come into force next year. This latest escalation is consistent with our Geopolitical…
Daily Insights
Chinese Consumer And Producer Prices Are Deflating
China’s CPI and PPI inflation release for July indicates that deflationary pressures dominate the domestic economy. After remaining unchanged in June, consumer prices fell by 0.3% y/y. Meanwhile, the 4.4% y/y drop in producer prices fell below expectations of…
Daily Insights
China’s Engine Is Failing, And The World Economy Is Losing Altitude

China has generated 41 percent of the world’s economic growth through the past ten years, al-most double the 22 percent contribution from the US. Now that the Chinese growth engine is failing, we explain why it is arithmetically impossible for world growth to maintain the altitude of the past few decades. And we discuss an important investment implication.

Counterpoint by Dhaval Joshi
Has The RMB Depreciation Run Its Course?

Although the RMB has cheapened, macro conditions are not yet favorable for the Chinese currency. We expect the RMB to decline by at least another 5% in the next six months. A weak currency and subdued economic growth lead us to maintain a cautious stance on Chinese equities.

China Investment Strategy by Arthur Budaghyan
Not Immaculate (GeoRisk Update)

The global economy will not enjoy an “immaculate disinflation” but will suffer a very maculate one due to China’s growth slowdown and restrictive monetary policy in the developed world. Investors should stay overweight low-beta assets.

Geopolitical Strategy by Matt Gertken

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