China Growth Tracker: Data Disappointing in Line with Our Reopening Index

We published a note on how to track Chinese growth in real time using financial and commodity market prices. In these weekly reports, we update the indicators to help us track growth.

Summary

• Our high-frequency China reopening index continues to suggest China’s incoming data will do little to support a China recovery theme.
• Our market data-based China growth tracker has followed suit, weakening over the past two weeks, despite continued positive developments to our economic data-based China growth tracker through April (Charts 2 and 3).

Depressing China Data Developments

In line with our reopening index, three data points this week suggest the shine is coming off China’s recovery: 1) an 8% YoY drop in imports; 2) an almost deflationary CPI print at +0.1% YoY; 3) aggregate financing came in at CNY1.2 trillion, half of expectations. Our reopening index suggests poor outturns are to continue.

Market-based measures of China’s growth are following a similar line of development, weakening over the past two weeks (Table 1). Positive iron ore and copper contributions were outdone by larger negative ones from oil, the Baltic Dry Index, and 10-year yields.

However, this sits in stark contrast with our economic data-based China growth tracker (Table 2). April PMI details proved (largely) positive for China’s outlook.

Bilal Hafeez is the CEO and Editor of Macro Hive. He spent over twenty years doing research at big banks – JPMorgan, Deutsche Bank, and Nomura, where he had various “Global Head” roles and did FX, rates and cross-markets research.

Ben Ford is Researcher at Macro Hive. Ben studied BSc Financial Mathematics at Cardiff University and MSc Finance at Cass Business School, his dissertations were on the tails of GARCH volatility models, and foreign exchange investment strategies during crises, respectively.

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