Most Recent
Gavekal Dragonomics
The Foreign-Domestic Demand Divergence
Wei He, Dragonomics Team
17 May 2024
Exports mostly propelled China’s economic growth in April, as domestic demand slowed in several sectors. Wei and the Dragonomics team argue that external demand will probably continue to support economic growth in the coming months, while new policy initiatives to boost demand create upside risk, especially in the property sector.
Gavekal Research
Webinar: Currency Stresses
Will Denyer, Cedric Gemehl, Udith Sikand, Wei He
16 May 2024
The policy approaches of major economies are diverging, leading to unstable currency markets with more than a hint of beggar-thy-neighbor at work. Our team of country specialists seek to explain what comes next.
Gavekal Research
Video: The Economics Of A No-Limits Partnership
Yanmei Xie
16 May 2024
Vladimir Putin visited Beijing this week a few weeks after senior US officials were in town to berate Chinese policymakers over their alleged supply of “dual-use” products to Russia. Chinese sales of machine tools, industrial widgets and microchips are reportedly key to Russia’s reinvigorated weapons production program but Xi Jinping is likely to preside over a relatively cautious approach to the trade.
Gavekal Dragonomics
The Endgame For China’s Excess Capacity
Andrew Batson
14 May 2024
The new backlash to China’s exports is here, with the US expected to announce higher tariffs on Chinese electric vehicles and other goods. Andrew argues that the trends of increasing manufacturing investment in China and rising protectionism in the developed world look well entrenched, and explores three scenarios for how the tensions might play out.
Featured report
Gavekal Dragonomics
Macro Update: Supply Outpaces Demand
Andrew Batson, Dragonomics Team
26 Apr 2024
China’s growth has stabilized but its imbalances remain. Prices are falling, inventories are rising, capacity utilization is low and hiring is weak. The government’s strategy of prioritizing supply over demand risks entrenching this dynamic. In our quarterly chartbook, the Dragonomics team breaks down the latest economic developments and reviews the implications.
Gavekal Dragonomics
Steel Exports Become A Problem
Rosealea Yao
The Limits To Renminbi Depreciation
Wei He
The Travel Boom Normalizes
Ernan Cui
Webinar: China's Property Puzzle
Rosealea Yao, Xiaoxi Zhang, Christopher Beddor
The Upside Potential For Offshore Chinese Stocks
Thomas Gatley
China Shows Some Policy Flexibility
Andrew Batson, Wei He
Macro Update: Supply Outpaces Demand
Andrew Batson, Dragonomics Team
Webinar: Into The Upswing
Will Denyer, Cedric Gemehl, Wei He, Udith Sikand
Gavekal Dragonomics
Securing The Western Frontier
Tom Miller
16 Dec 2021
China looks like a winner from the US withdrawal from Afghanistan, now free to tighten its grip on Central Asia. In this DeepChina report, Tom explains the complex reality of the latest round of the "great game." China is getting closer to Russia, skeptical of Afghanistan and Pakistan, and consolidating its economic hold on Turkmenistan.
Policy and the cycle
What’s Behind China’s Caution On Stimulus?
Like the dog that failed to bark in the night, the most interesting development in China’s economy this year is what hasn’t happened: a substantial stimulus. What’s the reason for the government’s cautious approach? Andrew considers four possibilities and lays out the implications for macro policy going forward.
Reading China’s Exchange Rate Policy
The persistent strength in the US dollar has surprised a lot of market participants, not least the People’s Bank of China. Since the second half of 2023, the PBoC has made clear it wants to prevent the renminbi from depreciating too much against the US currency. But it keeps waiting for a weaker dollar to accomplish that goal—and the dollar keeps failing to cooperate.
Policy Support Falls Short
China's economic data for January and February were mixed, but overall the economic growth momentum decelerated slightly. Wei and the Dragonomics team argue that recent policy measures have shown no sign of gaining traction in the data, and increase the uncertainty around coming policy support.
Stocks
Gavekal Dragonomics
A User's Guide To The Chinese Stock Market
Thomas Gatley
2 Apr 2019
China’s onshore equity markets are now large and accessible enough that they can no longer be ignored by foreign investors—but idiosyncratic enough that they are hard to understand. This in-depth DeepChina report explains the fundamentals: What is there to invest in? Who owns the market? How can foreigners invest? How is the market regulated?
Bonds
Gavekal Dragonomics
A User's Guide To The Chinese Bond Market
Wei He, Xiaoxi Zhang
30 Jun 2021
The expansion and opening of China’s onshore renminbi bond market is one of the biggest changes to the structure of global financial markets in recent years, one that investors are still grappling with. In this comprehensive 30-page DeepChina report, our analysts present a guide to the nature and functioning of this important market.
Technology
The Coming Price War In Chips
Today, pressure from China's excess capacity is on high technology, most prominently semiconductors. China has been investing in new semiconductor fabs to increase self-sufficiency and relieve chip shortages. All that new capacity is now starting to come to market, at a time when the world could have difficulty absorbing the extra supply.
Secret Success In Supercomputers
Years before the US government expanded export controls to target technology champions like Huawei, it used them to restrain China’s supercomputer advances. Tilly argues that the sector provides lessons about what the controls can and cannot accomplish—in particular, that getting around sanctions is easier on a small scale than a large scale.
Balancing Act On Growth
The annual Central Economic Work Conference, which concluded in Beijing on Tuesday, presented another opportunity to reset the policy direction. Did China’s leadership take this opportunity to deliver a clear signal that they will do whatever it takes to stabilize the economy? Spoiler alert: they did not.
Property
Webinar: China's Property Puzzle
China’s property market is off to an awful start to 2024, and the government’s efforts to shore up the sector appear to be gaining no traction. Rosealea Yao and Xiaoxi Zhang join Christopher Beddor to unpack what exactly is driving the recent weakness and why policymakers are not doing more to help, as well as what it all means for commodity markets, the financial sector and economic growth ahead.
The Worsening Property Outlook
China’s property market is off to an awful start to 2024. Rosealea and Xiaoxi argue that the most likely path is for sales to continue to bounce along at the current low levels while construction improves modestly, if only due to social housing initiatives. But the poor start to the year means the risks are now tilted firmly to the downside.
Housing Completions Still Aren’t Fast Enough
China’s policymakers have called for “ensuring delivery of buildings” and stepped up policy support to finish delayed home construction projects. But Rosealea argues that the current pace of home completions is probably only enough to finish recent presales, not to work through the large backlog of delayed construction projects.
Gavekal Dragonomics
Behind The Incredible Export Boom
Thomas Gatley
Chinese export growth ostensibly continues to outpace the rest of the world this year, but Thomas believes this could in part be due to misleading data. Exporters have been incentivized to reduce their under-invoicing, which has in turn materially inflated China’s export growth over the past three years.
Managing Covid
The Chinese Consumer In 2023
The Invisible Second Wave
Shanghai Seminar — April 2023
The Reopening Recovery Is On Track
Macro Update: Reversal, Reopening, Recovery
Webinar: China’s Covid Surge And The Reopening Rally
Latest webinars
Webinar: Currency Stresses
The policy approaches of major economies are diverging, leading to unstable currency markets with more than a hint of beggar-thy-neighbor at work. Our team of country specialists seek to explain what comes next.
Webinar: China's Property Puzzle
China’s property market is off to an awful start to 2024, and the government’s efforts to shore up the sector appear to be gaining no traction. Rosealea Yao and Xiaoxi Zhang join Christopher Beddor to unpack what exactly is driving the recent weakness and why policymakers are not doing more to help, as well as what it all means for commodity markets, the financial sector and economic growth ahead.
Webinar: Into The Upswing
In this webinar Gavekal’s analysts review the themes driving growth across the world’s major economic regions, and discuss how macro developments are likely to drive financial markets over the remainder of 2024.