Most Recent
Gavekal Research
Webinar: What Chinese Stimulus Means For China And The World
Arthur Kroeber, Andrew Batson, Louis-Vincent Gave
3 Oct 2024
Chinese authorities have rolled out a raft of measures aimed at supporting the beaten-down domestic property and equity markets. This support package won’t miraculously revive China’s depressed consumer confidence overnight, but it does mean that China is set to adopt a reflationary policy stance. Our panel discussed what this shift means for growth, currencies, financial assets and commodities.
Gavekal Dragonomics
A Reset For The Big Banks
Xiaoxi Zhang
2 Oct 2024
China’s emerging stimulus plan includes a major boon for the banking sector: a commitment to a recapitalization of the big banks. Xiaoxi argues that such a move would reset their balance sheets, paving the way for them to more aggressively boost credit growth and support government programs to stabilize property developers and local authorities.
Gavekal Research
London Conference, September 2024
Research Team, Dragonomics Team
30 Sep 2024
At our latest conference in London, Gavekal’s senior partners and analysts discussed the most relevant themes for investors in a series of panels and fireside chats.
Gavekal Dragonomics
The Start Of A Stimulus Rally
Thomas Gatley
30 Sep 2024
China’s benchmark CSI 300 index rose 15.7% last week, then posted another 8.5% gain on Monday. Thomas argues that the combination of promised and reported stimulus, assuming it is actually delivered, pretty much guarantees the rise in equities will continue. In this piece, he explores how big the rally is likely to be and how best to play it.
Featured report
Gavekal Dragonomics
The Promise And Peril Of Industrial Policy
Thomas Gatley
21 Aug 2024
Many wonder why China’s government is not doing more to stimulate growth. One reason may be that from Beijing’s perspective, industrial policy is working. In this chartbook, Thomas examines the data: corporate earnings improved in 2023, new funding is going mainly to tech-intensive manufacturing and capital is increasingly flowing to the highest-return firms, who also do most new capex and R&D. But this apparently successful industrial policy comes with significant costs.
Gavekal Dragonomics
China Changes Expectations
Andrew Batson, Wei He
What’s Behind The Fiscal Shortfall
Wei He, Andrew Batson
Catching Up To Expectations
Andrew Batson, Dragonomics Team
The Returns From Reallocation
Andrew Batson
A Missing Rate Cut Sows Uncertainty
Wei He
Webinar: Charting China’s Course
Andrew Batson, Thomas Gatley, Ernan Cui, Xiaoxi Zhang
China’s Consumers And The Secondary Depression
Andrew Batson
Growth Risks Build As Policy Stays Cautious
Wei He, Dragonomics Team
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
China Changes Expectations
This week, a set of high-level announcements and media leaks indicated China’s government is finally trying to get ahead of expectations—and that means a big shift for financial markets. Andrew and Wei argue that although there are meaningful implications for immediate growth, the government must continue to deliver on their promises to sustain the recent rally in Chinese assets.
A Missing Rate Cut Sows Uncertainty
The People’s Bank of China kept its policy rates unchanged on Friday, defying market expectations of a cut. Wei argues that the central bank's renewed caution casts doubt on its attempts to enforce yield-curve control in government bond markets.
Priorities At The Third Plenum
The long-awaited Third Plenum of the Communist Party offered top leader Xi Jinping a platform to address the gap between his long-term vision of China’s technological rise, and the short-term reality of disappointing growth. In this piece, Andrew explains what the priorities Xi signaled at the plenum mean for economic policymaking.
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
Webinar: Setting The Agenda For China's Plenum
China's Communist Party is gearing up to hold its Third Plenum later this month, an event where top leader Xi Jinping will have a platform to articulate and possibly revise his vision for the economy. With domestic consumers in the doldrums, and trade tensions escalating, is a course correction for China coming? In this webinar our team of China experts explained what to expect, and not to expect, from this high-level conclave.
The Localization Drive Steps Up
China’s long-running drive to reduce its reliance on foreign technology is entering a new phase, as Tilly explains in this piece. Though most of the documents relating to this localization drive remain secret, the political signals to companies and local governments are increasingly quite clear: domestic suppliers are preferred.
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.
Property
Even State Developers Are In Trouble Now
The continued decline in China’s property sales and prices, now a full three years old, is starting to hurt even the strongest real-estate firms: state-owned developers. Xiaoxi argues that their worsening finances makes it harder to resolve the delays of housing sold in advance and restore household confidence in the presales system, increasing the downside risks ahead.
Timing The Property Downturn
How much longer does China’s property crisis have to run? The collapse in housing sales, prices and construction activity has now run for three full years. In this piece, Andrew and Xiaoxi explore the cross-country data on housing busts to assess whether the crisis is still in its early innings, or getting closer to winding down.
The Bet On A Property Bottom
While policymakers announced a package of property-support measures in May, implementation has been slow and real-estate indicators have not improved. Xiaoxi argues that the initiatives have several problems, but the fundamental issue is that officials are probably holding off on more aggressive support because they think sales are near a bottom—and they may be correct.
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: What Chinese Stimulus Means For China And The World
Chinese authorities have rolled out a raft of measures aimed at supporting the beaten-down domestic property and equity markets. This support package won’t miraculously revive China’s depressed consumer confidence overnight, but it does mean that China is set to adopt a reflationary policy stance. Our panel discussed what this shift means for growth, currencies, financial assets and commodities.
Webinar: Charting China’s Course
The summer’s hopes for a course correction in China have come and gone. Growth remains uninspiring but the government is sticking to its formula of conservative macro policy and aggressive industrial policy. Markets have judged this harshly, with domestic equities and bond yields testing new lows. In this webinar, our China team will assess the current economic trajectory and policy choices, and what they mean for markets and global growth.
Webinar: Mapping US Outcomes
In November, US voters will decide who controls the White House, Senate and House of Representatives. Republicans and Democrats differ significantly on key policy positions that will heavily impact the economy and markets. In this webinar, Will and Kai Xian compare the parties’ major policy stances and assess what they mean for markets—especially US equities, US bonds and the US dollar.