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Reading China’s Exchange Rate Policy

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Reading China’s Exchange Rate Policy

Wei He
26 Mar 2024
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.
Diagnosing The AI Disappointment

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Diagnosing The AI Disappointment

Tilly Zhang
25 Mar 2024
Stocks of China’s AI-related companies are down after their run-up in early 2023, in sharp contrast to those of the US. Tilly argues that the focus of Chinese companies is mostly not on the current areas of the AI “gold rush”: selling high-performance hardware and building large-scale models. Instead, it is on developing consumer applications for those AI models.

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Webinar: Animal Spirits In The Emerging Markets

Udith Sikand, Thomas Gatley, Arthur Kroeber
22 Mar 2024
While US tech stocks have been getting all the publicity, capital has quietly been flowing into emerging market investments over recent months. To gauge market prospects over the rest of 2024, Udith Sikand examined the macroeconomic outlook for the major emerging markets ex-China, while Thomas Gatley assessed the chances of a revival of animal spirits in the Middle Kingdom.

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The Reasons For Caution On Rates

Wei He
22 Mar 2024
China’s bond markets are pricing in aggressive expectations for rate cuts, and the central bank recently reduced the five-year lending rate by an unusually large margin. But Wei argues that the central bank is constrained by a reluctance to push rates close to the zero lower bound, and officials are likely to rely more on fiscal stimulus and property-related measures to support growth.

Featured report

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Macro Update: Another Supply-Side Stimulus

Andrew Batson, Dragonomics Team
26 Jan 2024
China managed to avoid entering a full-on deflationary spiral in 2023, but prices are still falling, growth is fragile and confidence is poor. Hopes for 2024 are pinned mostly on the government’s promises of more supply-side stimulus, yet this strategy poses its own challenges. In our latest quarterly chartbook, the Dragonomics team diagnoses the current economic difficulties and analyzes the implications of the response.

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Housing Completions Still Aren’t Fast Enough
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Rosealea Yao
Policy Support Falls Short
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Wei He, Dragonomics Team
A Tale Of Two Housing Markets
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Rosealea Yao
The Supply-Side Structural Problem
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Andrew Batson
Decelerating Auto Demand
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Ernan Cui
Video: Peering Through The China Policy Opacity
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Christopher Beddor
Webinar: Asset Allocation For The Ages
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Didier Darcet, Charles Gave
Decoding The New Productive Forces
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Tilly Zhang

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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.

Stocks

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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

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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.

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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
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The Invisible Second Wave
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Shanghai Seminar — April 2023
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The Reopening Recovery Is On Track
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Macro Update: Reversal, Reopening, Recovery
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Webinar: China’s Covid Surge And The Reopening Rally
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