China cannot escape its structural drags. Policymakers are trying to mitigate the impact of an aging population. China will soon become a trade deficit country, which has implications for global bonds. And we can’t forget the festering issue of HK unrest which could end up restricting Chinese access to foreign capital

Why Has China’s Trade Surplus (Just About) Gone Away? (Conversable economist) Timothy Taylor reviews IMF forecasts that China will run small trade deficits rather than surpluses in coming years. The three compelling factors for this are a services deficit (partly due to tourism), greater domestic consumption and an incomes deficit on net foreign assets. [Bearish US bonds]

China’s Desire to Control Hong Kong Will Not End Well – for China, Hong Kong or the Rest of the World (George Magnus) Hong Kong is China’s bridgehead to the international capital market and vice versa. A further deterioration in the Hong Kong situation may lead to financial sanctions against China, which could backfire. [Bearish HK, bearish China]

China Unveils Plan for Tackling Population Aging (Xinhua net) Chinese government has unveiled a medium- and long-term framework for tackling China’s aging population by 2022. Measures include reforming income distribution, steadily raising pension reserves, and increasing medical and nursing care for the elderly. [Bullish Chinese Health Care]