The WorldofGovernmentBonds website provides 2s10s, 2s5s and 1s2s spreads for a whole bunch of countries (missing unfortunately my favorite the 3m10s). Here’s the yield curve for China as of today:
Category Archives: China
China Q1 GDP, Illustrated
NBS released GDP numbers for Q1 yesterday, surprising on the upside (1.3% q/q vs. 0.6% Bloomberg consensus, not annualized; 4.8% y/y vs. 4.4%).
US Inflation and Chinese Imports
One reason why inflation exceeded my estimates from earlier this year is the price of imports. Since 2020M02, goods import prices from China have risen 5.3%, after declining 5.8% over the preceding six years. The dollar depreciated by 9.4% over the same period, implying a exchange rate pass-through coefficient of 0.56.
Guest Contribution: “Is China’s growth rate negative?”
Today, we are pleased to present a guest contribution written by John G. Fernald, Jack Mueller, and Mark M. Spiegel (all of the Federal Reserve Bank of San Francisco). Our views are our own, and not necessarily those of the Federal Board of Governors or the Federal Reserve Bank of San Francisco.
An Effective Anti-Inflationary Measure
As noted by Jeff Frankel:
In terms of what the president can actually control to reduce inflation, one neglected tool is trade policy. Former President Donald Trump put these tariffs on aluminum and steel, and everything we import from China — all kinds of goods. The tariffs raise prices to consumers. It seems to me a no-brainer to undo those barriers. Biden should be able to get China and other countries to reciprocally lower some barriers against us. But with or without that, removing tariffs could bring down consumer prices and prices to businesses for steel and aluminum and all kinds of inputs immediately. That’s the one thing that the government could most rapidly control.
The Extent and Implications of the China Slowdown
According to official data published by the National Bureau of Statistics, China’s growth q/q seasonally adjusted slowed considerably in Q3, to 0.2% (not annualized), below the Bloomberg consensus of 0.5%. The four quarter growth rate was 4.9%, vs consensus of 5.2%.
Summarizing China’s Short Term Economic Outlook
Wells Fargo Economics analyses the extent of the current slowdown, and contemplates the impact on regional economies. Here’s the heat map:
Motivations for Economic Policies in Western China
I’m not a China expert, but 20 years ago, I had the opportunity to hear the Chinese explanation for their planned policies in Western China (Xibu Dakaifa), translated in English journalistic accounts as “Develop the West” (I was the international finance economist on the Council of Economic Advisers at the time, and the Chinese counterpart, the State Development Planning Commission, was coming to Washington to meet with us; I was tasked with overseeing elements of the meeting).
Slowdown in China
Goldman Sachs Current Activity Indicator (CAI) dips into negative territory in August. Since the CAI is scaled to GDP annualized growth, this implies negative GDP growth in that month.
China and the Initial Response to Covid-19
A must watch documentary, even if you know the basic history: Frontline‘s “China’s Covid Secrets“.