
China | Economics & Growth | Emerging Markets
China | Economics & Growth | Emerging Markets
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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.
A lot happened over Christmas. Most notably, China announced that it would manage Covid-19 as a Class B infectious disease as it changed the official name to the ‘novel coronavirus infection’. On the same day, they also announced that starting 8 January quarantine requirements on inbound travellers would be removed. They were not done there. A day later, China announced that it would resume foreign visa applications.
As Covid-19 restrictions were scaled back, China came in with further plans to rejuvenate its property sector which saw property developers rally. These include:
Anticipation of renewed building activity helped spur iron ore higher. However, the rally faces several challenges.
Our market data-based tracker is off the cycle lows but has passed back some of the positivity it earned through Q4. The tracker has fallen 23 points over the past two weeks, led by the negative year-on-year growth for the Baltic Dry Index (-40pp) while iron ore (-6pp), oil (-11pp) and China 10-year yields (-2.6bps) proved harmful too (Table 1). Meanwhile, our economic data-based tracker is yet to recover as positive initial data for December (non-manufacturing backlog: +0.5 points) was outweighed by negative counterparts (Table 2).
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