China Growth Tracker: Travel Proving the Only Positive in April

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

• Excluding flights from our high-frequency China reopening index, activity has stalled through April.
• In line with this, our market data-based China growth tracker has failed to improve, despite a strongly positive update to our economic data-based China growth tracker through March (Charts 2 and 3).

Are the Chinese Substituting Holidays for Domestic Activity?

Our high-frequency China reopening index continued to increase in April. However, this is due to an outsized increase in flights as well as stronger domestic travel. Stripping out air travel, the reopening stalled in April (Chart 1).

Market-based measures of China’s growth remain hesitant, in line with weaker domestic activity (excluding flights; Table 1). Positive iron ore and copper contributions were outdone by larger negative oil, Baltic Dry Index, and China 10Y yield contributions.

Meanwhile, our economic data-based China growth tracker continued to improve through March, as electricity and freight output improved (Table 2).

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.

Photo Credit: depositphotos.com

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