China’s Oil Imports Under Pressure

China’s crude oil imports have declined by 5.6% in volume terms in the first seven months of the year, unusual in an economy with GDP growing at headline rates of 12.7% y/y in 2021. But given the increasing importance of China’s independent refineries and exports of refined products, crude imports are no longer a straightforward read into trends in China’s domestic demand and economic performance. This note briefly outlines the factors behind the slowdown in crude imports so far this year. For the rest of the year, we expect a small pickup in crude imports relative to current levels, but a full-year drop compared to 2020.

Posted August 30, 2021
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Property Market Chartbook, August 2021

China’s July property data showed that weakening residential construction contributed to the broader industrial slowdown over the past several months. Starts and sales both declined in year-on-year terms, in part due to flooding and restrictions on movement necessary to control the Delta variant. Policy toward developers’ financing conditions continues tightening, which marks a qualitative difference from previous property market downturns.

Posted August 30, 2021
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The Auto Sector Slows: Chip Shortage or Demand Weakness?

China’s auto industry was a key driver of growth in the second half of 2020, but has started to drag on the economy this year. Both sales and output growth are reporting double-digit declines, which are expected to continue through Q3, at least. The shortage in semiconductors for the auto sector is the primary factor behind the decline in output, particularly for passenger cars. However, the push for more electric vehicles is also increasing demand for chips and extending the drought in inventories. On the demand side, truck sales are slowing more than those of passenger cars, in line with the weakness in construction momentum. The slowdown in auto sales and output is likely to weigh upon headline cyclical indicators for the remainder of 2021.

Posted August 4, 2021
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