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China government may tolerate lower growth

The latest Chinese economic data for October indicate the moderate deceleration in growth already seen in Q3 is extending into Q4. Both exports and domestic demand have slowed, particularly in terms of fixed-asset investment. National fiscal spending has shown signs of slowing, and central government has cut off support for some regional infrastructure projects on […]

Latest Japan GDP data point to moderate deceleration

  Japanese GDP for Q3 came in at JPY545.8 trillion annualised, rising 1.4% q-o-q and 1.7% y-o-y in real terms. The data are broadly consistent with our view of a moderate deceleration of the Japanese economy in H2 after a strong Q2. The positive growth in Q3 marks the seventh consecutive quarter of economic expansion […]

China: Xi might stay beyond a second term

The Central Committee of the Chinese communist party convened for the first time on 25 October to elect the new Politburo and the Politburo Standing Committee (PSC). Unsurprisingly, Xi Jinping and Li Keqiang were both re-elected as members of the PSC, and Xi was reappointed general secretary of the Party. The other five seats went […]

President Xi reveals grand plans for China

This week, in a speech to the 19th Communist Party Congress, Xi Jinping, party general secretary and the president of China, outlined his vision for China through to 2050. Xi argued that China has embarked on a new stage of development. On the political front, he believed that China has become stronger and will move […]

Chinese growth forecast remains intact

Chinese GDP for Q3 2017 came in at Rmb21.2 trillion (USD3.2 trillion), growing by 6.8% y-o-y in real terms, slightly below the pace of expansion in the first half of the year (6.9%). Several points are worth highlighting. First, China’s economic transition is well underway. The tertiary sector, mainly services, continues to be the main […]

PBOC aims to stave off potential liquidity shock

The People’s Bank of China (PBoC) announced on 30 September that it would lower the required reserve ratio (RRR) for selected banks by 50-150 basis points (bps) from the beginning of next January. Specifically, banks eligible for a 50 bps cut to their RRR will include those that have at least 1.5% of their existing […]

Moderate deceleration underway in China

The latest data on China’s economic activity point to a slowdown in China’s growth momentum in the third quarter, after the positive surprise of the first half of the year. We expect growth to continue to moderate for the rest of 2017 and into 2018, but the pace of deceleration may be fairly modest. We […]

Chinese PMI point to continued expansion

China’s official manufacturing PMI in August came in at 51.7, rising slightly from July (51.4), and remaining firmly in expansionary territory. The Markit PMI extended its ascendance for the third consecutive month to reach 51.6 in August. Domestic demand seems to be holding up well. The production, new orders and imports sub-indices of the official […]

Income growth supports recovery of Japanese consumption

Following a strong rebound in Q2, the momentum behind consumer spending in Japan seems to have moderated somewhat in July. Retail sales in Japan grew by 1.9% y-o-y, down slightly from 2.2% in June and 2.5% in Q2. Despite the softer momentum, the recovery in Japan’s consumer sector, which started roughly in the second half […]

Japan’s economy delivers a positive surprise

The first estimate of Japan’s Q2 GDP showed growth of 1.0% quarter over quarter (q-o-q) in real terms, or 4.0% annualised, beating the consensus estimates (1.6% annualised) by a wide margin. We have therefore decided to revise up our 2017 GDP forecast for Japan to 1.9% from 1.3%. Unlike previous quarters, when the recovery was […]

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