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China: growth looking good for first half before possible deceleration in second

The first batch of hard data on domestic activity for 2017 points to strong momentum in fixed-asset investment (FAI) and industrial production, while consumption has been on the weak side. In the first two months of 2017, FAI grew by 8.9% y-o-y, compared with 6.5% for December 2016 and 8.1% for 2016 as a whole. As […]

Upbeat Chinese PMI point to strong momentum

China’s official manufacturing purchasing managers’ index (PMI) in February came in at 51.6, compared with 51.3 in January, while the Caixin (Markit) manufacturing PMI rose by 0.7 from the previous month to 51.7. The official non-manufacturing PMI in February remained an elevated 54.2, only slightly below the reading of 54.6 in January. In summary, China’s February […]

U.S.-China: Trump’s new approach risks a dangerous confrontation

The relationship between the US and China is of vital importance for the world both from an economic and a geopolitical perspective. Competition between the two powers could be set to come to a head under Donald Trump’s presidency. First, the trade relationship with China is a central issue in the Trump administration’s apparent intention […]

Japan: an export-led recovery is underway

The first preliminary reading of Japan’s real GDP growth for Q4 2016 came in at 1% q-o-q annualised, roughly in line with the consensus forecast of 1.1% but below the 1.3% growth in Q3. The growth in Q4 almost all came from external demand (+1.0%), while the contribution from domestic demand was virtually 0%. Japanese […]

China: near-term prospects good, mid term less clear

Chinese GDP grew by 6.8% in Q4 2016 and by 6.7% in 2016 as a whole, in line with our forecast. The pick-up in fixed-asset investment in the second half was probably the key contributor to this solid performance. The likelihood of a sharp deceleration in fixed-asset investment in Q1 2017 has declined greatly. Growth […]

China maintains economic momentum

The latest data releases out of Beijing indicate steady momentum in the Chinese economy. Exports are showing signs of recovery and investment in manufacturing is helping to offset a recent drop in property investment. All in all, the latest data releases are consistent with our full-year GDP forecast of 6.7% in 2016. Looking ahead, we […]

Signs of life in Japanese inflation

The labour survey for October shows that wage growth remains sluggish in Japan, despite increasing signs of tightness in the labour market. Nonetheless, inflation in Japan may start to move higher on account of external factors such as the exchange rate and commodity prices. Japanese workers’ cash earnings rose by just 0.1% year-over-year in October. […]

Japan may see modest improvements in growth and inflation

At its latest policy meeting on November 1, the Bank of Japan (BoJ) elected to keep its “Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control” policy unchanged and did not announce any further easing measures. In addition, the BoJ revised the trajectory of its inflation projections downward to better reflect Japan’s economic reality. […]

PMI reports point to good second half for Chinese economy

China’s purchasing manager indices (PMIs) rose strongly in October. Both the official and the Caixin manufacturing PMIs came in at 51.2 , reaching their highest levels since August 2014. The official non-manufacturing PMIs also rose noticeable in October. The strong figures indicate that the improving growth momentum in China of the past few months has […]

Chinese GDP forecast revised up for 2016

The latest data releases confirm our view that the Chinese economy is stabilising for the moment and that growth is on track to meet the government’s target of 6.5%-7% in 2016. The strong Q3 GDP reading leads us to revise our full-year GDP forecast for China to 6.7% from our previous forecast of 6.5%. Recent […]

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