Country Briefing: China

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1 Country Briefing: China August, 1 Dr. Edward Yardeni eyardeni@ Debbie Johnson djohnson@ Mali Quintana aquintana@ Please visit our sites at www. blog. thinking outside the box

2 Table Of Contents Table Of Contents Real GDP 1 Industrial Production Electricity 3- Manufacturing PMI 5- Manufacturing & Non-Manufacturing PMIs 9 Retail Sales 1 Autos 11 Trade Balance 1 Exports & Imports Export Shares 1 Exports to 17-1 Trade Balance by Regions 19 Exports to China Railways Traffic 1 Producer Price Index - Consumer Price Index 5-7 China vs. US Inflation -9 Stock Market 3-31 Money Growth & Inflation 3 Social Finance 33-3 Bank Loans 35 Monetary Policy 3 PBOC Balance Sheet 37 Exchange Rate 3 International Reserves 39- China vs. US Monetary Indicators 1- Industrial Production & Retail Sales 3 Railway Freight Traffic Bank Loans 5 August, 1 / Country Briefing: China www.

3 Real GDP 5 Figure 1. CHINA: REAL GDP 5 yearly percent change (.7) quarterly percent change, saar (.9) Q Source: China National Bureau of Statistics and Haver Analytics. Page 1 / August, 1 / Country Briefing: China www.

4 Industrial Production 3 33 Figure. CHINA: INDUSTRIAL PRODUCTION* (5=1, sa) Dec * Value added basis. Source: IMF International Financial Statistics. Figure 3. CHINA: REAL GDP & INDUSTRIAL PRODUCTION (yearly percent change) Real GDP (.7) Industrial Production* (.1) * Value added basis. Source: Haver Analytics. Page / August, 1 / Country Briefing: China www.

5 Electricity Figure. CHINA: ELECTRICITY OUTPUT (1 million KWH) Actual 3-Month Average Source: Haver Analytics and China National Bureau of Statistics Figure 5. CHINA: ELECTRICITY OUTPUT (yearly percent change) in 1-Month Moving Average (1.9) in 3-Month Moving Average (1.7) Source: Haver Analytics and China National Bureau of Statistics Page 3 / August, 1 / Country Briefing: China www.

6 Electricity 1 Figure. CHINA: REAL GDP & ELECTRICITY OUTPUT (yearly percent change) Q Real GDP (.7) Power Generated Output (1-ma) (1.9) Source: Haver Analytics and China National Bureau of Statistics Figure 7. CHINA: INDUSTRIAL PRODUCTION & ELECTRICITY OUTPUT (yearly percent change in 3-ma) Industrial Production (.1) Electricity Output (1.7) Source: Haver Analytics and China National Bureau of Statistics. -1 Page / August, 1 / Country Briefing: China www.

7 5 Figure. Manufacturing PMI CHINA: MANUFACTURING PURCHASING MANAGERS INDEX (sa) Jul M-PMI Composite (9.9) 9 35 Leading Index (9.) Source: China Federation Logistics & Purchasing and Haver Analytics Figure 9. CHINA OFFICIAL MANUFACTURING PURCHASING MANAGERS INDEX & MAJOR COMPONENTS* (sa) Jul Composite (9.9) New Orders (5.) Employment (.) Output (5.1) * An index above 5 indicates an increase in activity. An index below 5 indicates a decrease in activity. Source: China Federation of Logistics & Purchasing and Haver Analytics. Page 5 / August, 1 / Country Briefing: China www.

8 5 55 Figure 1. Manufacturing PMI CHINA: MANUFACTURING PURCHASING MANAGERS INDEX (sa) Jul PMI Composite (9.9) Output (5.1) New Orders (5.) Jul Jul 5 3 New Orders (5.) Export Orders (9.) New Orders minus Export Orders (1.) Jul Source: China Federation Logistics & Purchasing, OECD, and Haver Analytics. -5 Page / August, 1 / Country Briefing: China www.

9 7 Figure 11. Manufacturing PMI CHINA: MANUFACTURING PURCHASING MANAGERS INDEX (sa) 7 5 Jul 5 Imports (9.3) Employment (.) Jul Stocks of Orders/ Purchases (5.5) Jul Jul 5 Quantity of Purchases (5.5) Source: China Federation Logistics & Purchasing/Haver Analytics. 3 Page 7 / August, 1 / Country Briefing: China www.

10 5 5 Figure 1. Manufacturing PMI CHINA: MANUFACTURING PURCHASING MANAGERS INDEX (sa) Jul Suppliers Delivery Times (5.5) Stock of Finished Goods (.) Jul Stock of Raw Materials (7.3) Jul Jul Purchase Price (5.) Source: China Federation Logistics & Purchasing/Haver Analytics Page / August, 1 / Country Briefing: China www.

11 Figure 13. Manufacturing & Non-Manufacturing PMIs CHINA: MANUFACTURING PURCHASING MANAGERS INDEXES Final (Jul=5.) Jul Source: Markit and Haver Analytics. 5 Figure 1. CHINA: NON-MANUFACTURING PURCHASING MANAGERS INDEX (sa) 5 55 Jul Source: China Federation Logistics & Purchasing and Haver Analytics 5 Page 9 / August, 1 / Country Briefing: China www.

12 Retail Sales 3 Figure 15. CHINA: RETAIL SALES (billion yuan, nsa) Source: China National Bureau of Statistics. 5 Figure 1. CHINA: RETAIL SALES (yearly percent change) 5 3 Total (1.) Source: China National Bureau of Statistics. -1 Page 1 / August, 1 / Country Briefing: China www.

13 Figure 17. CHINA: AUTOMOBILE SALES & PRODUCTION (million units, nsa) Sales (.1) Autos Production (.) Source: China Association of Automobile Manufacturers Figure 1. CHINA: AUTOMOBILE SALES & PRODUCTION (1-month sum, million units) Sales (5.5) Production (5.3) Source: China Association of Automobile Manufacturers Page 11 / August, 1 / Country Briefing: China www.

14 1 Figure 19. CHINA: MERCHANDISE TRADE (billion dollars, saar) Trade Balance Source: China Customs and Haver Analytics CHINA: MERCHANDISE TRADE BALANCE (billion dollars, 1-month sum) Figure Source: China Customs and Haver Analytics Page 1 / August, 1 / Country Briefing: China www.

15 1 Figure 1. CHINA MERCHANDISE TRADE* (yearly percent change) Exports & Imports 1 5 Exports (-.) Imports (-.) * Excluding Hong Kong. Source: China Customs/Haver Analytics. Page 13 / August, 1 / Country Briefing: China www.

16 Exports & Imports Figure. CHINA: MERCHANDISE TRADE* (billion dollars, saar, ratio scale) Total Imports Exports Telecommunication & Sound Recording Equipment Machinery & Transport Equipment Professional & Scientific Instruments & Apparatus Iron & Steel Electrical Machinery, Apparatus, & Appliances * Excluding Hong Kong. Source: China Customs and Haver Analytics. Page 1 / August, 1 / Country Briefing: China www.

17 Exports & Imports Figure 7. CHINA: MERCHANDISE TRADE (billion dollars, saar, ratio scale) With US Exports With Japan Exports Imports Imports With EU Exports Imports With Rest of World Exports Imports Source: China Customs/Haver Analytics. Page 15 / August, 1 / Country Briefing: China www.

18 Figure. CHINA: MERCHANDISE EXPORTS (as percent of total exports) Export Shares To United States (17.3) To Japan (.1) To European Union (15.) Source: China Customs and Haver Analytics. 1 5 Figure 9. CHINA: MERCHANDISE EXPORTS (as percent of total exports) 5 55 To Rest of World* (1.) * Excludes the US, Japan, and European Union exports. Source: China Customs and Haver Analytics. Page 1 / August, 1 / Country Briefing: China www.

19 Exports to Figure 3. CHINA: MERCHANDISE EXPORTS TO US & US M-PMI Chinese Exports to US (yearly percent change in 3-ma) 5-3 US M-PMI (5+=expansion, sa) Source: China Customs and Haver Analytics Figure 31. CHINA: MERCHANDISE EXPORTS TO EU & EU M-PMI Chinese Exports to EU (yearly percent change in 3-ma) EU M-PMI (5+=expansion, sa) Source: China Customs RBS and Markit Page 17 / August, 1 / Country Briefing: China www.

20 5 Figure 3. CHINA: MERCHANDISE EXPORTS TO JAPAN (yearly percent change) Exports to Source: China Customs. -3 Figure 33. CHINA: MERCHANDISE EXPORTS TO REST OF WORLD* (yearly percent change in 3-ma) * Exports excluding US, EU, and Japan. Source: China Customs. Page 1 / August, 1 / Country Briefing: China www.

21 3 Figure 3. Trade Balance by Regions CHINA: MERCHANDISE TRADE BALANCE BY REGIONS (billion dollars, 1-month sum) US (5.1) EU (1.) Source: China Customs and Haver Analytics. 3 Figure 35. CHINA: MERCHANDISE TRADE BALANCE BY REGIONS (billion dollars, 1-month sum) With Rest of World (5.1) Japan (-.) Source: China Customs and Haver Analytics. - Page 19 / August, 1 / Country Briefing: China www.

22 Figure 3. EXPORTS TO CHINA: US, EUROZONE + UK, JAPAN, SOUTH KOREA, & AUSTRALIA (billion dollars, 1-month sum) US (11.3) Eurozone + UK (1.) Japan (119.9) South Korea (1.3) Australia (59.5) Exports to China May Source: Bureau of the Census and China Customs. Figure 37. EXPORTS TO CHINA: US, EUROZONE + UK, JAPAN, SOUTH KOREA, & AUSTRALIA (yearly percent change) May Source: Bureau of the Census and China Customs. - Page / August, 1 / Country Briefing: China www.

23 . Figure 3. CHINA: RAILWAYS FREIGHT TRAFFIC (1 million tons) Railways Traffic Source: China National Bureau of Statistics Figure 39. CHINA: RAILWAYS PASSENGER TRAFFIC (1 million persons) Month Moving Average Actual Source: China National Bureau of Statistics. Page 1 / August, 1 / Country Briefing: China www.

24 Producer Price Index 1 1 Figure. CHINA: CPI & PPI (yearly percent change) CPI (1.9) PPI: Total Industrial Products (-.) Source: China National Bureau of Statistics Figure 1. CHINA: RAW MATERIALS & MANUFACTURING PPI (yearly percent change) Raw Materials (-.) Manufacturing (-.1) Source: China National Bureau of Statistics. -15 Page / August, 1 / Country Briefing: China www.

25 Producer Price Index 1 1 Figure. CHINA: LIGHT & HEAVY INDUSTRY PPI (yearly percent change) Heavy Industry (-5.7) Mar - Light Industry (-.9) Source: China National Bureau of Statistics Figure 3. CHINA: RAW MATERIALS PPI (yearly percent change) Chemical (-3.) Coal (-.9) Ferrous Metals (-5.) Nonferrous Metals (-1.1) Source: China National Bureau of Statistics. -5 Page 3 / August, 1 / Country Briefing: China www.

26 Figure. CHINA PPI: CONSUMER GOODS (yearly percent change) Producer Price Index Durable Goods (-1.7) Daily-Use Articles (-1.7) Source: China National Bureau of Statistics. -1 Page / August, 1 / Country Briefing: China www.

27 1 Figure 5. CHINA: CONSUMER PRICE INDEX Total (1.9) Consumer Price Index Excluding Food (1.) Consumer Goods (1.7) Services (.) Source: Haver Analytics Page 5 / August, 1 / Country Briefing: China www.

28 Consumer Price Index 3 Figure. CHINA: CONSUMER PRICE INDEX (yearly percent change) Medicine, Medical Care & Personal Articles (3.) 1-1 Fuel & Power (-7.) Clothing (1.) - - Transportation & Communication (-1.) Housing (1.) Recreation, Education & Cultural Services (1.) Household Facilities, Articles & Repair Services (.) Tobacco & Liquor Products (3.9) Dec Source: Haver Analytics. Page / August, 1 / Country Briefing: China www.

29 Consumer Price Index Figure 7. CHINA: CONSUMER PRICE INDEX (yearly percent change) Fresh Vegetables (-.5) 5 3 Food (.) Meat, Poultry & Related Products (19.) Fresh Fruits (-3.) Eggs (.3) Grain (.) Source: Haver Analytics. Page 7 / August, 1 / Country Briefing: China www.

30 1 Figure. CONSUMER PRICE INDEX (yearly percent change) China vs. US Inflation 1 - China (1.9) US (1.1) Source: Bureau of Labor Statistics and China National Bureau of Statistics Figure 9. CONSUMER PRICE INDEX: FOOD (yearly percent change) China: Food (.) US: Food at Home (-1.3) Source: Bureau of Labor Statistics and China National Bureau of Statistics Page / August, 1 / Country Briefing: China www.

31 Figure 5. CONSUMER PRICE INDEX EX FOOD (yearly percent change) China vs. US Inflation - China (1.) US (1.) Source: Bureau of Labor Statistics and China National Bureau of Statistics Figure 51. PRODUCER PRICE INDEX (yearly percent change) China: Total Industrial Products (-.) US: Finished Goods (-.) Source: Bureau of Labor Statistics and China National Bureau of Statistics Page 9 / August, 1 / Country Briefing: China www.

32 Figure 5. CHINA: SHANGHAI-SHENZHEN 3 (1/31/=1) Stock Market day moving average. Source: Haver Analytics. / Figure 53. CHINA: MSCI SHARE PRICE INDEX (yuan, December 31, 199=1) / day moving average. Source: Morgan Stanley Capital International. Page 3 / August, 1 / Country Briefing: China www.

33 Figure 5. Stock Market ***** Chart Not Available ***** Task: MSCISTKCRBMET KEEP command attempted on missing data :39:1 9 Figure 55. CHINA: STOCK MARKET & COPPER PRICE 5 7 / 3 5 MSCI Share Price Index (yuan, December 31, 199=1) / Copper Price* (cents per pound) * Nearby futures contract. Source: Morgan Stanley Capital International and Haver Analytics. Page 31 / August, 1 / Country Briefing: China www.

34 3 3 Figure 5. CHINA: M1 & CPI (yearly percent change) Money Growth & Inflation Consumer Price Index (1.9) M1* (pushed ahead 1 months) (.) * In yuan. Source: China National Bureau of Statistics. 3 3 Figure 57. CHINA: M & CPI (yearly percent change) Consumer Price Index (1.9) M* (pushed ahead 1 months) (11.) * In yuan. Source: China National Bureau of Statistics. Page 3 / August, 1 / Country Briefing: China www.

35 . 3.5 Figure 5. CHINA: TOTAL SOCIAL FINANCING (trillion yuan) Social Finance Source: Peoples Bank of China Figure 59. CHINA: TOTAL SOCIAL FINANCING (billion US dollars) Source: Peoples Bank of China. -1 Page 33 / August, 1 / Country Briefing: China www.

36 15 Figure. CHINA SOCIAL FINANCING (trillion yuan, 1-month sum) Total in Yuan (1.3) Social Finance (trillion US dollars, 1-month sum) 3 3 Total In US Dollars (.5) Source: Peoples Bank of China/Haver Analytics. 15 Figure 1. CHINA SOCIAL FINANCING (trillion yuan, 1-month sum) 15 1 Bank Loans in Yuan (1.) (trillion US dollars, 1-month sum) Bank Loans in US Dollars (1.9) Source: Peoples Bank of China/Haver Analytics Page 3 / August, 1 / Country Briefing: China www.

37 3 Figure. CHINA: COMMERCIAL BANK LOANS (monthly change in billions) Bank Loans 3 1 in yuan (133.) in dollars (1.) Source: People s Bank of China Figure 3. CHINA (monthly change in 3-month average, billion yuan) Bank Loans Source: Haver Analytics. -5 Page 35 / August, 1 / Country Briefing: China www.

38 Figure. CHINA REQUIRED RESERVE RATIO (percent) Large Depository Institutions (17.) Small/Medium Depository Institutions (15.) Source: People s Bank of China. Monetary Policy / Figure 5. CHINA: PRIME LENDING RATE (percent) Jul Source: Haver Analytics. Page 3 / August, 1 / Country Briefing: China www.

39 PBOC Balance Sheet Figure. PBOC ASSETS (trillion dollars, nsa, ratio scale) Total Assets (5.1) Foreign Exchange Assets (3.) Nongold International Reserves Held by China (IMF data) (3.) Source: People s Bank of China and IMF Figure 7. PBOC ASSETS (percent) Foreign Exchange Held/Total PBOC Assets Source: People s Bank of China and IMF. 35 Page 37 / August, 1 / Country Briefing: China www.

40 Figure. Exchange Rate ***** Chart Not Available ***** Task: FXCHINA_BB COMPOSE command attempted on missing data :51: Figure 9. MAJOR FOREIGN HOLDERS OF US TREASURY SECURITIES (billion dollars, nsa, ratio scale) May China + Hong Kong 1 1 China 1 1 Hong Kong Source: US Department of the Treasury, Office of International Affairs. 1 Page 3 / August, 1 / Country Briefing: China www.

41 5 Figure 7. CHINA: INTERNATIONAL RESERVES (billion dollars, nsa) International Reserves Non-Gold International Reserves (IMF) Holdings of US Treasury Securities* May * Includes private and official accounts. Source: US Department of the Treasury, Office of International Affairs and International Monetary Fund Figure 71. CHINA: INTERNATIONAL RESERVES (billion dollars, yearly change) Non-Gold International Reserves (IMF) Holdings of US Treasury Securities* May * Includes private and official accounts. Source: US Department of the Treasury, Office of International Affairs and International Monetary Fund. Page 39 / August, 1 / Country Briefing: China www.

42 Figure 7. CHINA: MERCHANDISE TRADE & NONGOLD INTERNATIONAL RESERVES (billion dollars) Merchandise Trade Surplus (1-month sum) Nongold International Reserves (1-month change) Source: Haver Analytics. International Reserves Figure 73. CHINA: NONGOLD INTERNATIONAL RESERVES (1-month change) MINUS MERCHANDISE TRADE SURPLUS (1-month sum) (billion dollars) Source: China Customs and Haver Analytics Page / August, 1 / Country Briefing: China www.

43 China vs. US Monetary Indicators Figure 7. BANK LOANS (trillion US dollars) 15 China 15 US CENTRAL BANK ACCOUNTS (trillion US dollars) 5 China s Total Assets Jul US Fed s Total Assets Source: Board of Governors of the Federal Reserve and People s Bank of China. Page 1 / August, 1 / Country Briefing: China www.

44 China vs. US Monetary Indicators Figure 75. CHINA: BANK LOANS (as a percent of US Bank Loans) TOTAL ASSETS OF PEOPLE S BANK OF CHINA (as a percent of US Fed s Total Assets) Source: Board of Governors of the Federal Reserve and People s Bank of China. 5 Page / August, 1 / Country Briefing: China www.

45 5 Figure 7. Industrial Production & Retail Sales CHINA: INDUSTRIAL PRODUCTION & PRODUCER PRICE INDEX (yearly percent change) Industrial Production* (.1) -5-1 PPI: Total Industrial Products (-.) * Value added basis. Source: IMF International Financial Statistics and China National Bureau of Statistics. 5 Figure 77. CHINA: RETAIL SALES (yearly percent change) 5 3 Total (1.) Source: China National Bureau of Statistics. -1 Page 3 / August, 1 / Country Briefing: China www.

46 Figure 7. Railway Freight Traffic CHINA: RAILWAYS FREIGHT TRAFFIC & IMPORTS PLUS EXPORTS Source: China National Bureau of Statistics, China Customs, and Haver Analytics. Railways Freight Traffic (1 million tons) Imports Plus Exports (billion dollars, saar) Page / August, 1 / Country Briefing: China www.

47 Bank Loans Figure 79. BANK LOANS: CHINA & US (trillion US dollars) China (nsa) (15.) 15 US (sa) (.9) Source: Board of Governors of the Federal Reserve and People s Bank of China. Figure. CHINA: BANK LOANS (as a percent of US Bank Loans) Source: People s Bank of China. Page 5 / August, 1 / Country Briefing: China www.

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