Most Recent
Gavekal Dragonomics
What Are State Assets For?
Andrew Batson
22 Apr 2024
China has a lot of debt, but unlike many other indebted countries that borrow to fund recurring expenditures, much of China's borrowing has been used to build physical and corporate assets, mostly associated with local governments and state-owned enterprises. As the government faces pressure to find new sources of revenue, Andrew explores what these assets are and how they might be used.
Gavekal Dragonomics
Xi’s Vision For Finance
Xiaoxi Zhang
19 Apr 2024
A newly released compilation of top leader Xi Jinping’s speeches detail his vision for China’s financial sector. Xiaoxi argues that Xi wants a more disciplined banking system that allocates capital towards policy-preferred sectors in order to drive sustainable long-term economic growth—a re-politicization of finance that will have several ramifications.
Gavekal Research
Webinar: Forward To The 1970s? Investing For An Inflationary Age
Louis-Vincent Gave, Charles Gave, Anatole Kaletsky
18 Apr 2024
With inflation reaccelerating in the US, energy prices rising and escalating conflict in the Middle East, 2024 is beginning to feel uncomfortably reminiscent of the early 1970s. In this webinar, Gavekal’s founding partners examine how investors have mispriced the risk of permanently higher inflation, and discuss how to structure portfolios for a less forgiving macro environment in which bonds no longer serve to hedge exposure to equities.
Gavekal Research
What’s Behind China’s Caution On Stimulus?
Andrew Batson
17 Apr 2024
Like the dog that failed to bark in the night, the most interesting development in China’s economy this year is what hasn’t happened: a substantial stimulus. What’s the reason for the government’s cautious approach? Andrew considers four possibilities and lays out the implications for macro policy going forward.
Featured report
Gavekal Dragonomics
Macro Update: Another Supply-Side Stimulus
Andrew Batson, Dragonomics Team
26 Jan 2024
China managed to avoid entering a full-on deflationary spiral in 2023, but prices are still falling, growth is fragile and confidence is poor. Hopes for 2024 are pinned mostly on the government’s promises of more supply-side stimulus, yet this strategy poses its own challenges. In our latest quarterly chartbook, the Dragonomics team diagnoses the current economic difficulties and analyzes the implications of the response.
Gavekal Dragonomics
The Middling Growth Trap
Wei He, Dragonomics Team
Global Growth To The Rescue
Wei He
Benchmarking Social Housing Progress
Rosealea Yao
Migration Stagnation
Ernan Cui
China Electrifies
Haixu Qiu
Webinar: The Coming Age Of Protectionism
Thomas Gatley, Yanmei Xie, Tom Miller
China’s Savers Turn To Gold
Thomas Gatley, Wei He
Managing The Local Fiscal Drag
Xiaoxi Zhang
Gavekal Dragonomics
Securing The Western Frontier
Tom Miller
16 Dec 2021
China looks like a winner from the US withdrawal from Afghanistan, now free to tighten its grip on Central Asia. In this DeepChina report, Tom explains the complex reality of the latest round of the "great game." China is getting closer to Russia, skeptical of Afghanistan and Pakistan, and consolidating its economic hold on Turkmenistan.
Policy and the cycle
What’s Behind China’s Caution On Stimulus?
Like the dog that failed to bark in the night, the most interesting development in China’s economy this year is what hasn’t happened: a substantial stimulus. What’s the reason for the government’s cautious approach? Andrew considers four possibilities and lays out the implications for macro policy going forward.
Reading China’s Exchange Rate Policy
The persistent strength in the US dollar has surprised a lot of market participants, not least the People’s Bank of China. Since the second half of 2023, the PBoC has made clear it wants to prevent the renminbi from depreciating too much against the US currency. But it keeps waiting for a weaker dollar to accomplish that goal—and the dollar keeps failing to cooperate.
Policy Support Falls Short
China's economic data for January and February were mixed, but overall the economic growth momentum decelerated slightly. Wei and the Dragonomics team argue that recent policy measures have shown no sign of gaining traction in the data, and increase the uncertainty around coming policy support.
Stocks
Gavekal Dragonomics
A User's Guide To The Chinese Stock Market
Thomas Gatley
2 Apr 2019
China’s onshore equity markets are now large and accessible enough that they can no longer be ignored by foreign investors—but idiosyncratic enough that they are hard to understand. This in-depth DeepChina report explains the fundamentals: What is there to invest in? Who owns the market? How can foreigners invest? How is the market regulated?
Bonds
Gavekal Dragonomics
A User's Guide To The Chinese Bond Market
Wei He, Xiaoxi Zhang
30 Jun 2021
The expansion and opening of China’s onshore renminbi bond market is one of the biggest changes to the structure of global financial markets in recent years, one that investors are still grappling with. In this comprehensive 30-page DeepChina report, our analysts present a guide to the nature and functioning of this important market.
Technology
The Coming Price War In Chips
Today, pressure from China's excess capacity is on high technology, most prominently semiconductors. China has been investing in new semiconductor fabs to increase self-sufficiency and relieve chip shortages. All that new capacity is now starting to come to market, at a time when the world could have difficulty absorbing the extra supply.
Secret Success In Supercomputers
Years before the US government expanded export controls to target technology champions like Huawei, it used them to restrain China’s supercomputer advances. Tilly argues that the sector provides lessons about what the controls can and cannot accomplish—in particular, that getting around sanctions is easier on a small scale than a large scale.
Balancing Act On Growth
The annual Central Economic Work Conference, which concluded in Beijing on Tuesday, presented another opportunity to reset the policy direction. Did China’s leadership take this opportunity to deliver a clear signal that they will do whatever it takes to stabilize the economy? Spoiler alert: they did not.
Property
Housing Completions Still Aren’t Fast Enough
China’s policymakers have called for “ensuring delivery of buildings” and stepped up policy support to finish delayed home construction projects. But Rosealea argues that the current pace of home completions is probably only enough to finish recent presales, not to work through the large backlog of delayed construction projects.
Video: Peering Through The China Policy Opacity
The first week of March saw China’s government present its economic policy targets and fiscal plans for the year ahead. In this video interview, Christopher peers through the official fog to assess the degree of policy support on offer for China’s economy and discusses how this affects the growth outlook.
Webinar: Dealing With China's Deflation
China's economy is limping into 2024, beset by a deflationary dynamic of deficient domestic demand. Markets are depressed too: prices of bonds and equities show little optimism for future growth despite government promises of more fiscal and monetary stimulus. Our China team analyzed the causes and consequences of this deflationary pressure, and the prospects for relief via an improvement in property.
Gavekal Dragonomics
Behind The Incredible Export Boom
Thomas Gatley
Chinese export growth ostensibly continues to outpace the rest of the world this year, but Thomas believes this could in part be due to misleading data. Exporters have been incentivized to reduce their under-invoicing, which has in turn materially inflated China’s export growth over the past three years.
Managing Covid
The Chinese Consumer In 2023
The Invisible Second Wave
Shanghai Seminar — April 2023
The Reopening Recovery Is On Track
Macro Update: Reversal, Reopening, Recovery
Webinar: China’s Covid Surge And The Reopening Rally
Latest webinars
Webinar: Forward To The 1970s? Investing For An Inflationary Age
With inflation reaccelerating in the US, energy prices rising and escalating conflict in the Middle East, 2024 is beginning to feel uncomfortably reminiscent of the early 1970s. In this webinar, Gavekal’s founding partners examine how investors have mispriced the risk of permanently higher inflation, and discuss how to structure portfolios for a less forgiving macro environment in which bonds no longer serve to hedge exposure to equities.
Webinar: The Coming Age Of Protectionism
This webinar examines the probable extent of anti-China protectionism around the world, assesses the consequences for China's manufacturing industries and growth outlook, and gauges the risk to other economies of Chinese retaliation.
Webinar: Animal Spirits In The Emerging Markets
While US tech stocks have been getting all the publicity, capital has quietly been flowing into emerging market investments over recent months. To gauge market prospects over the rest of 2024, Udith Sikand examined the macroeconomic outlook for the major emerging markets ex-China, while Thomas Gatley assessed the chances of a revival of animal spirits in the Middle Kingdom.