-
Gavekal Dragonomics
Lance Noble
Nov 18th 2019
Defending The Single Market
Europe’s leaders are promising a more forceful approach to defending the bloc’s interests. But they do not fully subscribe to the view, widely held in the US, that China is a strategic rival and security threat. What they have been able to agree on, as Lance argues, is the need to protect the EU’s single market against Chinese state capitalism.
0 -
Gavekal Dragonomics
Andrew Batson
Nov 15th 2019
Handing Off The Slowdown
China’s data releases for October showed signs that the global downturn in electronics, and the domestic fall in car sales, are starting to fade. But the bad news is that the property and heavy industry complex is weakening. That combination means roughly stable growth for the moment, reassuring policymakers that their cautious stance works.
-
Gavekal Research
Simon Pritchard
Nov 13th 2019
Something Has To Give
Public support for Hong Kong's protest movement has been re-energized by perceived police brutality, the local government offering no political response to the crisis and Mainland authorities delivering mixed, but slightly sinister messages about their next move. This piece assesses the political forces at play and takes a stab at explaining what comes next.
-
Gavekal Dragonomics
Dan Wang
Nov 13th 2019
The Weakening Bite Of US Tech Sanctions
US sanctions on Chinese technology companies have grown progressively less effective since the US government used them to take down ZTE. Huawei has refused to collapse, and other targeted firms are not too troubled. In this piece, Dan explains why export controls, once the kiss of death, are becoming just another operational challenge.
-
Gavekal Research
Louis Gave
Nov 12th 2019
The Hong Kong Conundrum
When I wrote on the Hong Kong dollar peg back in May, there was no inkling that trust between the police and much of Hong Kong’s population would fully break down. Today, Hong Kongers are saying: “We don’t trust the police to do the right thing, or even speak the truth”. This situation causes many clients to ask: "Why has the peg not broken down?"
-
Gavekal Dragonomics
Xiaoxi Zhang
Nov 11th 2019
The Financing Squeeze Spreads To Corporate Bonds
The corporate bond market was once promoted as a better way to finance China’s private firms. Instead, as Xiaoxi explains in this piece, it has turned into another source of financial pressure. The corporate bonds of private firms are now maturing faster than they can issue new ones, creating a financing squeeze that could last through 2021.
-
Gavekal Dragonomics
Thomas Gatley
Nov 07th 2019
Autos Are Getting Back On The Road
China’s industrial slowdown is not just about exports. The deep downturn in auto sales accounts for about half of the slowdown in GDP growth since 2018, Thomas estimates. Things are now starting to look less bad, and the growth drag is heading back toward zero. But autos are still not about to deliver a big boost to growth or commodity demand.
-
Gavekal Research
Andrew Batson
Nov 06th 2019
Let The Thousand Cuts Begin
Was it worth the wait? Markets have been expecting the People’s Bank of China to cut policy rates ever since it introduced a new rates framework in August and promised to lower funding costs. On Tuesday, the central bank finally delivered, rolling over its one-year medium-term lending facility at 3.25%, 5bp below the previous rate of 3.3%.
-
Gavekal Research
Louis Gave
Nov 05th 2019
The Knowledge Revolution And Its Consequences
From Hong Kong to Santiago to Paris, this year has seen protestors rage against out-of-touch political elites. But does anything more than anger connect these apparently disparate movements? Louis argues that the upheavals posed by the ongoing “knowledge revolution” may explain the phenomenon, and offers investment advice on how to survive revolutionary times.
-
Gavekal Dragonomics
Lance Noble
Nov 04th 2019
Security Rules Are Decoupling Technology
Presidents Trump and Xi may be edging toward a trade deal, but trust between the US and China has not been restored. As Lance explains in this piece, China’s bureaucracy is ramping up its already-restrictive security rules on technology hardware, software and data flows. This push will ensure some decoupling of China’s tech sector from the US.
-
Gavekal Research
Anatole Kaletsky
Nov 04th 2019
Behind The Risk-On
In recent months, economic data has improved or stabilized, and political risks have receded. But now that equity prices on Wall Street have hit new records and US treasury yields have rebounded from the bottom of their post-2011 trading range, it is worth asking if the move to risk-on conditions is a temporary mood swing, or one supported by economic fundamentals.
-
Gavekal Research
Thomas Gatley
Oct 31st 2019
Video: China's Private Financing Woes
Chinese credit growth picked up in September, which is good news at the margin for private sector liquidity. However, a continued crackdown on shadow finance and private firms’ difficultly rolling over bond obligations will retard capital spending and lead to more bond defaults into next year.
-
Gavekal Dragonomics
Rosealea Yao
Oct 30th 2019
Housing & Construction Review 2019
China’s property market has held up surprisingly well in 2019, but will that strength last? In her annual chartbook, Rosealea examines key market trends and explains the outlook for 2020. Flexible policy can probably continue to avoid a deep decline in housing sales, but construction activity and materials demand are almost certain to slow.
-
Gavekal Research
Louis Gave
Oct 29th 2019
Where Will Growth Come From Now?
In the spring of 2003 Gavekal posited that China would become the new locomotive of world growth. But now, the days when China could be counted upon to gear up its balance sheet and pull global growth up by its bootstraps are coming to an end. And as global activity slows investors are asking “where will the growth come from"?
-
Gavekal Research
Arthur Kroeber
Oct 28th 2019
China-Bashing In A Political Season
Signs are growing that the US and China will have a mini-deal on trade ready by the time Trump and Xi meet at the mid-November APEC summit. The key questions are whether opposition from US hardliners could derail the deal at the last moment, and whether the campaign to “decouple” the two economies will be knocked back if there is a deal.
-
Gavekal Dragonomics
Ernan Cui
Oct 23rd 2019
The Bills Come Due In Tianjin
On paper, the northern port city of Tianjin was once the richest place in China. But now its financial center lies empty, its statistics have been exposed as falsified, and the local government and firms are close to running out of cash. In this report, Ernan explains why Tianjin’s long-running problems have finally burst into the open.
-
Gavekal Research
Andrew Batson
Oct 21st 2019
Three Swing Factors For Chinese Growth
China’s recent economic figures do not paint a bright picture. Yet some of the problems weighing on growth are moving closer to resolution. So how much of a bounce in the data can we expect from these positive developments? Three possible sources of good news can help answer this question: exports, domestic investment and autos.
-
Gavekal Research
Louis Gave
Oct 18th 2019
Video: The End Of The Trend?
For the past few years, US treasuries, the US dollar and the oil price have all broadly traded in a range. In fact, the only bankable trend for investors has been the outperformance of US equities, without which global stock indexes would still be trading at 2006 levels. However, there are signs that the investment environment is changing.
-
Gavekal Research
Charles Gave
Oct 17th 2019
The Paris Project In A Keynesian Time
Some time ago, I had gathered a team in Paris to develop a new venture that would apply macro research analysis to portfolio construction in a systematic way. Things are progressing well and I wanted to update readers on the initiative. The common thread is a rejection of forecasting and a reliance on market prices and economic data.
-
Gavekal Dragonomics
Thomas Gatley, Ernan Cui
Oct 17th 2019
The Case Of The Mysterious Vanishing Statistics
Problems with China’s economic statistics are often blamed on falsification by local officials. But they are not the only ones causing trouble. In this piece, Thomas and Ernan document how central government agencies, including the National Bureau of Statistics and the central bank, have recently stopped publishing some important data series.
Home
