A year ago we were looking for confirmation of a thesis that we had come to believe, that the Chinese economy was in much more trouble than the CCP or Western analysts/commentators were pitching. The "tell"* in February 2022 were Chinese pork futures and their failure to rise during the New Year celebrations following the irrational exuberance of the Great Reopening hype. This time it might be travel, as pointed out by Japan's Nikkei Asia, January 26:
Use of private cars may signal that consumers are tightening their belts
....MUCH MOREBEJING/SHANGHAI -- The Chinese New Year travel rush, known as "Chunyun," started on Friday, with the government projecting a 14% decrease from the year before in the number of people using public transportation for returning home or going on trips.
On Friday, Shanghai Hongqiao station was filled with homeward-bound passengers, and tourists with big suitcases. "I will spend a month at my home in Anhui province," said a 30-year-old worker in Shanghai. "I'm looking forward to meeting my family and friends."
The government has forecast that 1.8 billion people will ride mass transit -- with each trip counted separately -- during the 40-day Chunyun period that begins ahead of the Lunar New Year's holiday, which runs from Feb. 10 to Feb. 17. That is nearly 300 million fewer than what was predicted for the 2023 Lunar New Year.
Ahead of Chunyun, the Chinese government releases its forecast for the number of passengers during the 40-day period. The government included travel by private cars for the first time, forecasting the total number trips at 9 billion, a record high.
The country's economic recovery from COVID-19 has been slow, and heavy reliance on private cars may indicate that consumers are watching their spending. As express highways are toll-free for passenger cars during the holiday season, more people travel by car, analysts said.
Some analysts are skeptical about the 9 billion figure. They suspect the government may have tried to make the economy look better than it is by releasing a favorable estimate that includes the number of people using private cars, which is difficult to track....
*Some of those posts:
December 1, 2022
What If Our Understanding Of China's "Zero Covid" Is 180 Degrees Wrong?
December 8, 2022
"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....
January 31, 2023
"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:....
February 3, 2023
"Weak domestic demand threatens China’s rebound
Wha, uh, hey. I'm just confirming my priors, give me one minute:.... "
February 14, 2023
What If China Had A Reopening And Nobody Cared?, Part II
What's that Got To Do With The Price Of Pork In China?
Pork prices are one of the most basic indicators of the health of the Chinese economy.
Our proxies are hog futures on the Dalian Commodities Exchange. For folks paying attention, the months-long sideways move, here using the September futures as the example, the sideways move from mid-January to mid-April put the lie to the hubbub about the Great Reopening. The move up from December 2022 was all anticipatory emotion rather than actual demand...
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