May 2022 China Macro Data Recap

While headline industrial value-added surprisingly expanded by 0.7% y/y in May, most official subcomponent data continued to reveal a contracting economy. The property sector is now a significant drag on investment activity and overall economic momentum. Easing COVID restrictions will be essential to catalyze a more sustainable rebound later in the year, but any recovery will be modest in comparison to what occurred in 2020.

Posted June 21, 2022
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Property Market Chartbook, May 2022

Conditions in China’s property market remain dire, with sales severely limited by lockdowns and other COVID-related restrictions. Sales are still falling by 52% y/y in May according to the 30-city data. Policy overall is becoming more supportive toward the sector, led by multiple local governments and boosted by the recent 15 bps cut to the 5-year loan prime rate (LPR). Critical areas to watch include whether or not financial institutions remain cautious in lending to developers, as well as how fast sales improve after COVID restrictions are eased.

Posted May 31, 2022
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April 2022 China Macro Data Recap

China’s April macroeconomic data reveal that lockdowns and COVID-related restrictions are causing the economy to contract, with industrial value-added declining by 2.9% y/y last month, and retail sales dropping by 11.1%. While consumption is taking the first hit, production is likely to drop off further in the months ahead, given ongoing logistical disruptions to supply chains and declining new orders. Credit data were severely disappointing in April and indicate continued weakness in credit and investment demand. The most important indicators to watch from here concern how fast property sales and freight activity might recover if COVID restrictions ease soon.

Posted May 18, 2022
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