Q4 2021 China Macro Data Recap

China’s headline real GDP growth slowed to 4.0% y/y in Q4, weighed down by the flagging property sector. Today, the PBOC intensified its response to the slowing economy with the first interest rate cut since April 2020. While most indicators pointed to COVID-related lockdowns and travel restrictions limiting household consumption and income growth, official expenditure-side data surprisingly showed consumption driving economic growth in Q4.

Surprises in 2021 full-year data included producer price inflation on the high side, led by global crude prices, and on the low side, a full-year 5.4% decline in crude oil imports. Continued monetary easing and stronger private sector credit demand will be critical to kickstart a recovery in 2022, along with improvements in property sales. Birth rates continued declining in 2021, suggesting China’s overall population will peak this year or next.

Posted January 17, 2022
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Autos: Hope Springs Eternal

China’s auto sector has meaningfully slowed over the last year, with semiconductor shortages and COVID-related restrictions on travel impacting output and sales. As chip supplies have incrementally recovered, the outlook for the sector looks brighter in 2022, with the industry likely to play a role in stabilizing China’s economic growth later this year. Improvements in product delivery along with continued strength in new energy vehicles (NEVs) and exports will boost sales and output data relative to depressed 2021 levels. However, weakness in commercial vehicle demand could persist this year due to slower property and infrastructure construction.

Posted January 14, 2022
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Property Market Chartbook, December 2021

Major property sector indicators in November and early December revealed deeper declines, particularly in land sales, and weakening construction momentum. Higher-level policy signals have turned more positive toward the sector, but short-term financial pressures on developers are still intensifying as the industry awaits more concrete policy support.

Posted December 17, 2021
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