Three from Jeffrey Snider:
What didn't happen in China in January? Household borrowing. All the unearned hype on corporate bank loans, HH loans another pittance in Jan. Reopening changed nothing as Chinese refuse to chase a narrative. W/out real estate consumer spending isn't coming back (much). pic.twitter.com/Poh0snrzHq
— Jeffrey P. Snider (@JeffSnider_AIP) February 11, 2023
The real situation in China isn't nearly as cheerful as it is being made out to be. Huge credit impulse? Nope. You only need to take a look at the actual data and you see the numbers are much worse. Widespread deleveraging.https://t.co/A4iACZqk1F
— Jeffrey P. Snider (@JeffSnider_AIP) February 14, 2023
Related:Divergence btw Hong Kong's Hang Seng and real money indications (like UST yield curve or IRS spreads) indicate perhaps too much hype for China reopening in expectations (shares) which isn’t matching up with reality (eurodollar money). pic.twitter.com/EM1QOJIEaq
— Jeffrey P. Snider (@JeffSnider_AIP) February 14, 2023
IMF: China Should "Coax" The Masses Into Saving Less and Consuming More
The underlying fact set was the point of the intro to and outro from January 31's "What If China Had A Reopening And Nobody Cared?":
China isn't reopening, it has reopened. This is it. And despite the record savings the population has accumulated over the last three years we are not seeing a wave of demand in the domestic economy. Using one of the most basic proxies for what is actually going on, the price of pork, the grand reopening, is, to say the least, muted. This is especially true considering the country just celebrated the largest, most festive holiday on the calendar.*****One data point does not make a trend but it does raise the possibility that the facile expectation of a boom in Chinese consumption is wrong.What if, and I'm just spitballing here, what if the giant ball of savings is being targeted by the rapidly aging population as a retirement cushion, i.e. future consumption, not current?
That would leave China's export economy to carry the weight.
And that is not looking very promising at the moment:....
And the headline story from Asia Times, February 11:....
Also: "Weak domestic demand threatens China’s rebound
Wha, uh, hey. I'm just confirming my priors, give me one minute:.... "
And: "China Quietly Launches QE: Beijing Orders Large Insurers To Buy Bonds To Contain Selling Panic"
I'm telling you, there is something very wrong with China's economy....
"Chinese factories are shutting down two weeks earlier than usual ahead of Chinese New Year"
It really is starting to appear that China could see a recession* caused by slowdowns in their Western customers' economies.It's only recently that we've started thinking the previously unthinkable:
November 24: "Copper: What's Your Timeframe?":
....For now and into Q2 2023 the West and maybe China have a recession they have to get through.December 1: "What If Our Understanding Of China's "Zero Covid" Is 180 Degrees Wrong?"
