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new tax changes to boost investment

July 15, 2012

China tax cut to boost foreign investment – FT

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NE

June 14, 2012

Reforming the north-east_ Rustbelt revival _ The Economist

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Inflation going the right way…

June 14, 2012

Chinese inflation falls to two-year low – FT

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the true asian powerhouse

June 14, 2012

Lead over India widens as China powers ahead – FT

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Is China slowing?

May 27, 2012

Resilient China_ How strong is China’s economy_ _ The Economist

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Rebalancing the Economy

May 27, 2012

Chinese urged to spend more and save less – FT

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PBoC cuts rates

May 13, 2012

The PBoC cut RRR – BAML

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Crucial step for further integration in Asia

May 13, 2012

China, Japan and S Korea in free trade talks – FT

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Banks in China

May 7, 2012

China’s banks_ Storing up trouble _ The Economist

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China Economics in April

April 30, 2012
  • Apr data may show mild growth slowdown and easing inflation – CPI inflation may have dropped slightly on falling food prices. Investment likely slowed further due to continued drag from property tightening measures, while retail sales and industrial production may have stabilized. Policy support is still needed to avoid further growth downturn, and inflation should not be an obstacle for policy easing in the near term.

 

  • CPI inflation likely fell slightly to 3.5% – Food inflation may have eased significantly benefiting from declining vegetable and pork prices. We estimate food prices declined 0.6% MoM, and rose 7.3% YoY. Non-food inflation may have been sticky (0.3% MoM and 1.7% YoY) due to the indirect impact of fuel price hike.

 

  • YoY PPI inflation may have remained negative – Despite falling international commodity prices in Apr, interim MOC data suggest domestic producer good prices continued the uptrend that started in Feb. Overall PPI may have increased by 0.3% MoM, but YoY inflation likely fell to -0.5% owing to lower base effect.

 

  • Growth slowdown may have moderated – Despite policy easing targeted at first-home purchasers and ordinary commodity housing, the property tightening measures continued to weigh on investment. We estimate that YTD FAI growth fell to 20.4% YoY. The uptrend of the manufacturing PMI suggests a stabilization of the IP momentum, and we expect IP to grow by 11.8% YoY in Apr. Retail sales may have accelerated to 15.5% YoY, benefiting from recent pick-up of housing transactions.

 

  • Trade activity may have remained sluggish – Externally, recent data releases suggest that the recession in the euro area is unlikely to end in Q1, and the US may experience a near-term pullback of economic activity following unusually warm winter. Slow export growth, together with continued weakness in property investment, would contain import growth. We think exports may have increased by 6.8% YoY in Apr, and imports by 7.6% YoY, leading to a monthly trade surplus of about $11bn.

 

  • Broad money and credit growth may have edged down again – Liquidity injected through OMOs and FX purchases may not be sufficient to offset the impact of tax collection and reversal of quarter-end deposit and loan surge. We forecast broad money growth of 13.1% YoY and narrow money growth of 4.5% YoY in Apr. New RMB lending may have fallen to Rmb788bn in Apr, slightly below 10% of the annual quota (presumed to be Rmb8tn).

China Economics April – Citi