|2016/09/13||The Meaning of an Established Stabilising Trend|
The Chinese National Bureau of Statistics released a set of data today, suggesting that the economy is continuing to stabilise in the second half of the year. Looking into the data and the rhetoric of a key official, we believe there is increasing evidence that the Central Government’s monetary stance will become less aggressive going forward.
|2016/09/08||The Search for Cues from the G20 Summit|
While many observers might have expected the G20 Summit to be just another gathering featuring top policymakers from around the world, in his opening speech, President Xi Jinping urged the participating dignitaries to avoid "empty talk" and called for actions to stimulate the global economy. Indeed, several notable developments occurred over the past week which we will cover in the following paragraphs.
|2016/08/05||Turning around? More like deteriorating at a slower pace|
While Hong Kong’s economic activities remained downbeat in the second quarter, the year-on-year declines in some high frequency data points, including those of trade, retail sales, and visitor arrivals, moderated.
|2016/07/28||Hints from the FOMC Meeting Communiqué|
Overnight, the Fed announced that it would keep the target range for the federal funds rate unchanged at 0.25-0.5% for the fifth consecutive time since lifting the benchmark interest rate by a notch in December 2015, which is in line with our expectation. The decision was supported by nine participants, with the only objection coming from Esther L. George of the Kansas Fed.
|2016/07/15||Time to halt rapid monetary expansion|
On the back of strong credit growth, the Chinese economy continued its stabilisation. With the decline in velocity of money, we believe it is about time to halt rapid monetary expansion.
|2016/06/24||The Day after – A Major Hangover|
The result of the British Referendum has left most of us in shock. A total of 33,551,983 people voted and 51.9% of them voted in favour of Britain exiting the 28-member European Union (EU). Nevertheless, according to the Guardian, the UK Prime Minister David Cameron is not "legally obliged to invoke the Lisbon treaty to start an EU exit."1 While it will take some time for us to digest the impact of these unchartered waters, some of the possible impacts are as follows.
|2016/06/07||The path of U.S. Fed rate hike and its implications to Hong Kong|
Ahead of the Federal Open Market Committee (FOMC) meeting on 14-15 June, Fed Chairman Janet Yellen addressed the World Affairs Council of Philadelphia on 6 June and talked about the economic outlook and monetary policies. In her speech, the Fed Chair gave indications that while the pace of interest rate increase will be slow given the lingering uncertainties in the U.S. and abroad, the Fed is likely to bring interest rates upward in one of its upcoming meetings.
|2016/05/18||From the Belt & Road Frontline|
The Chamber’s Senior Economist Rocky Tung is attending the Belt & Road Summit today and has listed out some bullet points of key messages of the morning session. Kicking off the summit, Zhang Dejiang, advised Hong Kong to be more active in the nation’s overall development. To achieve this, he suggests that the Central Government will support Hong Kong in four specific areas.
|2016/05/06||Shopping for some painkillers|
Retail sales extended its declining trend in March, falling 9.8% YoY during the month. On an aggregate basis, retail sales declined 12.5% YoY during the first quarter of 2016, confirming a persistent weakness in retail activities. The lacklustre retail performance continues to be highly correlated with inbound tourism, which is in a dire situation as visitor arrivals dropped 10.9% YoY in the first quarter. The weakening inbound tourism has also hurt the hotel industry, as hotel occupancy rates averaged only 83.3% during the first quarter (i.e. 2.3 percentage points lower than a year ago), while the average achieved hotel room rate was down 11.1% YoY during the same period (see Chart 1). These negative figures have served to increase pessimism in the overall business sector.
|2016/04/15||Growth is Slowing, But not Worrying|
It was a busy week for the Chinese Statistics Bureau, which released a basket of first quarter economic data. The set of data is reflective of the stabilising trend of growth that we have expected (see April issue of Bulletin), while there are increasing signs that top government officials have successfully calmed market jitters (see here). In the near term, a stable recovery in sentiment should be due as indicated by the solid economic data, while a more significant boost will only come with proven results of leverage reduction and profitability enhancement further down the road.