Most recent
Gavekal Dragonomics
The Wrong Kind Of Competition
Andrew Batson, Ernan Cui, Tilly Zhang
23 May 2025
The power of competition to discipline prices is indisputable—but can prices be influenced by controls on competition? China’s government is endorsing a theory that downward pressures on prices are being worsened by excess competition, and that official efforts to reduce those pressures are necessary. But Andrew, Ernan and Tilly argue that such a focus isn’t going to move the needle on what is ultimately a problem of deficient demand and excess investment.
Gavekal Dragonomics
State Developers Start To Stabilize
Xiaoxi Zhang
21 May 2025
China’s housing sales have broadly stabilized for almost a year now. Does that mean the worst is now over for developer finances? Xiaoxi argues that for private-sector developers, which have suffered the most, probably not quite yet. But for state-owned developers, some financial stabilization is now in sight.
Gavekal Dragonomics
Growth Momentum Falters
Wei He, Dragonomics Team
19 May 2025
After losing some steam in Q1, China’s growth momentum slipped further in April due to the initial impact from higher US tariffs and softer domestic demand. Wei and the Dragonomics team argue that with the US-China ceasefire improving the outlook for exports, policymakers will probably remain in wait-and-see mode for longer—even though domestic demand appears to be ebbing.
Gavekal Dragonomics
Exports And Equities After The Ceasefire
Thomas Gatley
16 May 2025
The US-China ceasefire announced this week is unequivocally positive for both China’s export economy and for stocks, at least in the short run. Thomas unpacks the implications of the agreement, and argues that easing trade tensions and stimulative policy settings will provide strong tailwinds for Chinese equity prices over the next few months—though risks will multiply later in the year.
Featured report
Gavekal Dragonomics
Macro Update: Managing The Trade Chaos
Andrew Batson, Dragonomics Team
6 May 2025
China’s attempt to stabilize its economy has been rudely interrupted by the sudden escalation of the US-China trade conflict into a near-embargo. No one thinks the current 100%+ tariffs are sustainable, but the off-ramp is not yet obvious. China’s government had already planned for a substantial fiscal stimulus, and has made clear it is prepared to do more if needed—but is not rushing to act. In our latest quarterly chartbook, Andrew and the Dragonomics team assess the economic fundamentals and explains China’s policy options for managing the trade chaos.
Gavekal Dragonomics
Webinar: Escalate To Deescalate?
Arthur Kroeber, Cedric Gemehl, Udith Sikand, Tom Miller
Carefully Controlling Appreciation
Wei He
Five Questions After The Geneva Ceasefire
Arthur Kroeber
Expropriation, Law, And Incentives
Andrew Batson
A Cautious Cut
Wei He
Macro Update: Managing The Trade Chaos
Andrew Batson, Dragonomics Team
Substituting For Secondary Housing
Xiaoxi Zhang
Global Strategy: Investing After Exceptionalism
Will Denyer, Tan Kai Xian, Udith Sikand, Thomas Gatley, Cedric Gemehl
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
Next Up: Monetary Policy
Unless something changes radically in the next few days, China is facing a major growth shock from the US imposition of massive tariffs. The question now is how China’s government will respond to intensifying growth fears. Wei argues that the first step should be an easing of monetary policy, and possibly more direct intervention from the central bank in financial markets.
The PBOC’s Aggressive Governor
The People’s Bank of China has been busy over the past year as its new governor, Pan Gongsheng, has overseen multiple interventions in financial markets and attempted risky policy changes. Wei argues that Pan’s aggressive policymaking style, along with a green light from top policymakers for more easing, means the chances of a large interest-rate cut are rising.
The Case For Monetary Policy
China’s pivot to economic stimulus was led by the central bank, but most pundits have been dismissive: monetary policy doesn’t matter, they said, what matters is whether there is going to be a big fiscal stimulus. In this piece, Andrew asks: what if the current obsession with a massive fiscal package is wrong, and the real problem is with monetary policy? What if China’s economy needs not another injection of debt-financed public spending, but simply for lower interest rates to work?
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 Next Big Fund
China’s government has announced plans for a RMB1trn national venture-capital fund, putting yet more state money into its commitment to high-tech development. The proposed fund’s size and structure are similar to the “Big Fund” launched a decade ago to accelerate the development of the semiconductor sector. But as Tilly explains in this piece, the goal this time is even more ambitious: to jump-start an ecosystem of hard-tech startups.
What DeepSeek Means For China’s AI
New models from AI startup DeepSeek rival some of the capabilities of leading US models at a fraction of the cost. Tilly argues that while some claims about the models are overstated, they vividly demonstrate the ability of Chinese AI companies to innovate around US restrictions—and shifts in the AI industry mean those restriction may become even less of an impediment in the future.
China’s Export Controls Send A Serious Signal
US President Joe Biden escalated the semiconductor war against China with a fresh round of chip export controls, and for the first time, China retaliated immediately with export controls on critical minerals and some technology products. Tilly argues that these restrictions are designed to inflict actual pain, and technology controls are increasingly a two-way street.
Property
State Developers Start To Stabilize
China’s housing sales have broadly stabilized for almost a year now. Does that mean the worst is now over for developer finances? Xiaoxi argues that for private-sector developers, which have suffered the most, probably not quite yet. But for state-owned developers, some financial stabilization is now in sight.
Substituting For Secondary Housing
China’s new-housing sales have stabilized, and policymakers have vowed to cut interest rates. Does this combination mean a meaningful rebound is ahead? Xiaoxi argues that the answer is probably not, as the relentless shift in demand towards the secondary market means rate cuts might mostly just boost sales of existing units.
Housing Inventories Diverge
China’s property-market downturn is entering its fifth year with little sign of recovery—except in the megacities of Beijing, Shanghai, Guangzhou and Shenzhen. Xiaoxi argues that a recent sales bump has not been enough to clear the inventory overhang in the mass of other cities, and a policy to tackle the problem is being implemented at a glacial pace, creating a divergence in the property market.
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: Escalate To Deescalate?
Investors were rewarded on Monday for their bets that a negotiated settlement will be reached in the United States-led trade war. This follows Britain and the US agreeing an outline trade deal, and an Anglo-Indian trade deal, suggesting that the old liberal trading order is not dead. Our team picked through these developments to assess if the trade war is over before it got going.
Webinar: Understanding The US-China Trade War
A week of tariff chaos has left the US and China locked in an all-out trade war, with tariffs in both directions now over 100%. The two sides have dug in to maximalist positions, which spells bad news for both economies, and for global trade. Arthur Kroeber, Andrew Batson and Thomas Gatley discuss the economic, political and financial dimensions of this unprecedented crisis.
Webinar: After Tariff 'Liberation Day'
If all of Donald Trump's announced “reciprocal” tariffs go into effect on April 9, the effective levy on US imports will zoom up to over 25%, the highest since the early 1900s and an increase of nearly 20pp from the current level. The big question now is whether the rest of the world will bargain for lower rates, or accept high US tariffs as the new normal and adjust around them. Our team of country economists convened to analyze Wednesday's announcements and discuss what this all means for the global macro situation and for specific regions.