Could the Year of the Dragon bring us some good luck in what otherwise looks a challenging year?
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Gerard has over a decade of experience as a professional economist, currently specialising in international economic research. He is responsible for monitoring and forecasting trends in emerging Asian economies, with a particular emphasis on China. He is also a member of the bank’s commodities research team, focusing on trends in iron ore and coal markets.
Gerard joined NAB in 2005, and previously focused on risk analysis across a range of industry sectors in Australia and abroad. He had particular expertise in areas such as Mining, Manufacturing, Healthcare and Retail, including the development of research into online retail sales. Prior to joining NAB, he was an economist with the Australian Bureau of Agricultural and Resource Economics, focusing on commodities and energy research.
He holds Bachelors degrees in Economics (with Honours) and Commerce from the Australian National University.
Could the Year of the Dragon bring us some good luck in what otherwise looks a challenging year?
Article
Global growth is expected to slow this year, but there are paths opening as we enter the new Lunar Year that could lead to a brighter picture, with a bit of luck in the Year of the Rabbit.
Article
Mixed signals – some risks from China’s incomplete recovery.
Insight
Long term pain – could the COVID-19 recovery disrupt SOE reform?
Insight
Suppliers are still searching for demand.
Insight
Modest Chinese stimulus highlights competing policy objectives.
Insight
The latest economic data from China continues to highlight some challenges in its recovery phase.
Export channels offer little opportunity as China attempts to recover.
Shutdown and restart – will China’s consumers return to support growth?
China’s economy sharply contracted in Q1; weakest growth in over forty years in 2020.
Overall, the global economic outlook has deteriorated since last month, with the downturn expected to far exceed the Global Financial Crisis.
Back in business? China attempts to restart its economy after Covid-19 shutdown
Data highlights the huge toll of Coronavirus countermeasures.
Commodity markets generally remain volatile, reflecting the uncertainty presented by the Coronavirus (Covid-19) outbreak.
Commodity prices have generally retreated in early February in response to the Coronavirus outbreak in China.
China’s economy faces a host of challenges in the year of the rat.
China’s ends 2019 in line with expectation.
China’s industrial sector appears to have stabilised ahead of new trade deal.
Economic conditions in 2020 are expected to remain unfavourable for commodity markets.
False frenzy – record Single’s Day sales don’t point to Chinese economic recovery.
Most of China’s indicators relatively weak year-on-year, however, the 70th anniversary of the founding of the People’s Republic of China at the start of the October has made this harder to gauge.
NAB’s Non-Rural Commodity Price Index is forecast to fall by 7.9% quarter on quarter in Q4 2019.
Trade truce – US and China reach an agreement, but trade outlook still uncertain.
Taking flight: China is changing the global tourism market.
Trade war finally shows its impact on China, as industrial sector drags Q3 growth lower.
NAB’s Non-Rural Commodity Price Index is forecast to fall significantly in Q4 2019.
Pork shortfall to maintain higher inflation in the near term.
India’s economy needs a stimulatory kick start, with no guarantees of recovery.
China’s industrial sector struggling ahead of the latest round of trade measures.
In US dollar terms, NAB’s Non-Rural Commodity Price Index is forecast to increase by 1.8% quarter on quarter in Q3 2019.
China’s economy is continuing to slow, even before the latest round of US tariffs (and China’s retaliation), meaning there’s further downside risk.
US dollar NAB’s Non-Rural Commodity Price Index is forecasted to increase by 2.1% yoy in Q3 2019, however underlying trends remain highly mixed. Higher export prices for LNG and iron ore (despite more recent spot price falls) are the key contributors, while both thermal and metallurgical coal are weaker, as are most base metals.
How successful has China’s deleveraging program been in managing the country’s debt?
Growth slowed in Q2 but policy support should see it stabilise.
NAB’s Non-Rural Commodity Price Index has been on the up in recent quarters, in large part due to iron ore prices.
NAB’s Non-Rural Commodity Price Index is expected to increase by 0.9% quarter on quarter in Q2 2019, a little stronger than anticipated in May.
Policy makers ready to stimulate as signs of weakness grow.
Can China weaponise rare earths to open a new front in the trade war?
Looking for work: the health of China’s labour market is still hard to ascertain.
Weaker economic trends even before trade tensions heat up again.
Credit surge keeps growth stable in Q1, but will the taps stay on?
Crashing cars: how deleveraging has hit China’s automotive sector
Add it up: the uncertainty around China’s economic data
Year of the Pig brings an uncertain outlook
China’s economy continues to soften, but our outlook is unchanged.
Weaker indicators point to slowing economic growth in Q4
Hands in pockets: Chinese consumers are confident but that doesn’t show up in retail sales data
Trade impacts are yet to emerge, but mixed signals persist in China.
China’s consumers aren’t ready to drive the economy’s growth.
China’s trade relationship with the European Union.
Can China maintain its stable growth profile as trade tensions increase?
China’s official data may underestimate the strength of growth in 2017.
Uneven flows – how distortions in China’s data paint a very different picture of global trade.
Indicators point to marginally softer conditions post China’s leadership change
Changing of the guard - what does China’s new leadership mean for its economy?
China’s stable growth continued in Q3, but supported by another credit binge.
Repurposing an old tool – a new life for the Required Reserve Ratio.
China’s old economy surprises on the downside, may point to weaker Q3 growth.
Tightening the purse strings – China’s foreign investment is slowing in a more closely regulated environment.
All eyes on China’s steel sector.
Chinese data generally weaker in July, returning to trend after strong June
Unwinding road ahead – weaker Chinese producer prices providing headwinds for advanced economy inflation
Old King Coal – coal still a big part of China’s energy mix but its role is on the wane
Steady as she goes – economic growth and other key indicators stable in Q2.
In May, international ratings agency Moody’s announced a downgrade for China’s sovereign credit rating, citing the country’s rising debt as a key factor in this decision.
Trends stable across the board, no sign of a major economic slowdown.
Belt and Road Initiative – can the reality of the program meet China’s grand ambitions?
Key indicators a little softer in April, pointing to easing economic growth in Q2.
Short term spike in coking coal masks softer trend for bulks.
China’s income inequality improving but still some long term challenges.
An improving US-China relationship provides a better environment for China’s economy.
Geo-political risks fail to dent global reflation...for now.
Rise of the machines: could automation help sustain China’s long term growth momentum.
An encouraging start to 2017 – although strength still comes from the old economy, with retail trends disappointing.
From a political perspective, President Trump’s decision to withdraw from the TPP reflected US sentiment against globalisation, particularly in the mid-west rust belt.
China records a comparatively strong finish to 2016, but Trump trade uncertainty adds downside risk to our moderate easing forecast for 2017.
China is similarly an important market for US producers, being the country’s third largest export market in 2015
China’s trade surplus narrowed in November, as a strong month-on-month rebound in imports narrowed the gap.
Since the middle of 2015, the seven-day Shanghai Interbank Offered Rate (Shibor) has been unusually stable – when compared with the extreme volatility in this market over the preceding five years.
China’s economic stability continued into October, however President Trump poses downside risks to the outlook
China’s economy continued to track sideways – but weaker real estate could cool conditions in Q4
Warning signs for China’s financial sector don’t guarantee crisis
The rust belt region has continued to underperform in recent times – as service focussed provinces have driven a greater share of China’s growth. In 2015, the three rust belt provinces were among the four weakest growing regions.
China’s slowdown has hit export dependent East Asia
A rebound in real estate investment, new construction activity and industrial demand for related products – such as steel and cement – helped to underpin economic growth in the first half of 2016.
Despite decades of change, China’s State-Owned Enterprises (SOEs) are a specific segment of the economy that still requires substantial reform.
China’s longer term growth prospects are dependent on a range of economic reforms – critical to supporting the broad based productivity growth necessary to offset the negative demographic effects from the country’s declining working aged population.
China’s construction rebound underpins industrial activity but also presents uncertainty going forward.
Iron ore prices trended lower across 2015 – from around US$70 a tonne (for 62% fines landed in China) in January, to a record low.
Construction activity continued ramp up in April, but we are concerned about the sustainability of growth.
A credit-fuelled rebound in China’s construction activity has breathed new life into the country’s beleaguered steel industry.
China becoming a major player in global mergers and acquisitions.
Chinese authorities target marginally slower growth, but are content to let debt position deteriorate.
Casting a wider net over China’s total debt Last month, we highlighted China’s debt as one of the key concerns around its economy in 2016. Debt levels have risen sharply since the Global Financial Crisis, particularly outside the traditional banking system – where the scale of borrowings is frequently under-estimated. This month, we’re digging a […]
Chinese share markets have plunged since the start of the year, but still have some way to go.
The modest recovery in industry unlikely to continue, China is moving away from the ‘old economy’.
China’s online retail sales have rapidly expanded in recent years, as rising disposable incomes and growing internet penetration have supported the sector’s growth.
The Indian market offers great potential for Australian exporters. Already the world’s third largest economy and growing by over 7% annually, India looks set to overtake China as the world’s most populous country in the next 7 years.
Under NAB’s forecasts, China’s economic growth is expected to slow from 6.7% in 2016 to the Five-Year Plan target of 6.5% in 2017.
China’s latest national accounts data showed a slowing trend for China’s economy in the September quarter falling below the annual growth target for the first time this year. As a result, we are revising our forecasts for China’s growth.
China moving the international standard – already planned but delayed – could show that the transition in China’s economic growth model has progressed further than previously understood.
China’s new labour force survey could finally provide unemployment clarity.
Short term disruptions add some uncertainty to extent of China’s economic slowdown. China’s 2014 GDP was revised lower in September – with growth down to 7.3% (compared with 7.4% previously) – due to weaker growth in services.
The dilemma facing Chinese economic policymakers has been clear since the ruling Communist Party’s “Third Plenum” meeting in late 2013.
China’s auto industry may be reaching its domestic limit, but is not yet ready to take on the world. The industry has experienced spectacular growth over the last decade – reflecting in part a broader evolution in China’s industrial sector over this period. At a national level, China has lost competitiveness to a range of emerging economies in Asia.
With China’s economic growth remaining stable in Q2, NAB Group Economist Gerard Burg looks at the issue of services being able to maintain their momentum post equity correction.
Opening the capital account will further internationalise the Yuan and monetary policy. This report is the second of two looking into capital account liberalisation in China. This report looks at the international implications of this reform.
An open capital account will end financial repression but still a slow path to reform. This report is the first of two looking into capital account liberalisation in China. This report looks at the domestic implications of this reform.
China’s partial economic indicators broadly stable in May, but weak enough for the People’s Bank of China (PBoC). In June, PBoC cut their economic growth forecast for 2015 from 7.1% to 7.0%. For now, our economic forecasts remain unchanged.
The changing composition of China’s growth model – towards services rather than heavy industry – means it is less commodity intensive than in the past.
China’s share market emerges as a key economic risk in early 2015, as industry remains weak.
Increasing productivity is one of China’s most critical challenges over the next few decades and education is a key factor in raising the average level of productivity.
China’s economy expanded by 7.0% in Q1 2015, down from 7.3% in Q4 2014. This was the weakest rate of growth since March 2009 – when China was at its lowest point during the GFC. Our forecasts are unchanged – with China’s economy to grow by 7.1% in 2015 and 6.9% in 2016.
China’s rapid industrialisation over the past few decades has provided considerable economic benefit for Australia – as a strong increase in trade and investment has increased the integration between the two countries, even before the recently negotiated free trade agreement.
In early February 2015, the People’s Bank of China (PBoC) cut the Reserve Requirement Ratio by 50 basis points. This was the first broad based cut to the RRR since May 2012 and it could release around RMB 612 billion in liquidity. The PBoC was quick to downplay the significance of this change.
The annual meeting of China’s parliament commenced in early March. From an economic perspective, the key announcement was the lowered growth target – to ‘about 7%’ from ‘about 7.5%’ in 2014. Our forecasts remain unchanged – at 7.1% in 2015 and 6.9% in 2016
Due to the Chinese New Year holiday period, there are limited partial economic indicators for January each year. That said, the data available points to a soft start – PMI measures are weak, imports slowed, inflation continues to soften and credit growth contracted.
Based on adjusted World Steel data, global steel production rose by 3.5% in 2014 to total 1.64 billion tonnes. Prices for metallurgical coal have remained comparatively stable since March 2014. Spot prices for thermal coal have continued to drift lower.
In 2014, China’s crude oil imports came to US$228 billion – accounting for almost 19% of the country’s total imports by value and around 2.5% of total GDP. Sustained lower oil prices will therefore reduce China’s financial outflows, providing a significant boost to the economy.
China’s economy continues on its gradual transition, away from a manufacturing hub towards a modern, consumption based economy. One signal of this trend is the increasing share of China’s services sector (tertiary industries), averaging 48% of GDP in 2014 (up from 47% in 2013).
In October 2014, the International Monetary Fund (IMF) announced that China had overtaken the United States to become the world’s largest economy. This was the first time since 1872 that the US was not considered the world’s largest economy, when it overtook the United Kingdom.
There is a growing expectation that China’s Central Economic Work Conference will lower China’s economic growth target for 2015 – down from this year’s ‘about 7.5%’ to 7.0% – however this change may not be officially announced until the National People’s Congress meets next March.
In late November, the People’s Bank of China (PBoC) surprised markets with cuts to benchmark interest rates. These changes were the first in over two years – the PBoC had held rates stable since early July 2012.
Twelve months ago, China’s Government announced its reform agenda, following on from the Third Plenum. So far, progress on these reforms has been limited, primarily in social policies such as loosening the Hukou system – which we have argued could go further – and the One Child Policy.
The cooler economic conditions experienced in the third quarter could continue into Q4 and further into 2015, reflecting the continued reluctance of Chinese policy makers to implement broad based stimulus. China’s industrial production growth also slowed slightly in October.
China’s third quarter National Accounts showed the economy grew by its slowest rate since March 2009. From a bulk commodity perspective, key parts of China’s economy remain comparatively weak. Industrial production has slowed in recent months.
China’s latest economic data was a mixed bag – with many measures comparatively negative (against the trends of recent years) but stronger than somewhat pessimistic market expectations. While year-on-year GDP growth was at a five year low, the growth rate remaining above 7% will likely…
China’s changing healthcare needs require major changes to the system to avoid economic pain. The population is ageing and life expectancy is rising. With these two trends, demand for healthcare services is set to increase – particularly given the growing incidence of non-communicable diseases.
Conditions in China’s real estate sector have slowed considerably across 2014. The sector has been a key contributor to economic growth in recent years and a slowing trend will impose greater pressure on other parts of the economy to provide growth momentum, particularly if the Government aims to maintain its current growth target.
Weaker than expected industrial production data is likely to generate headlines this month. However these results are not as negative as they may seem – reflecting in part the impact of stimulus in Q3 2013.
Economic trends in China –the key consumer for bulk commodities –are mixed, with stabilising trends in the industrial sector (having slowed across Q1) in contrast to a slowing trend in the real estate sector (a major consumer of steel). Global steel production has continued to increase.
The growth in China’s economy over the past thirty years has been extremely impressive, overtaking Japan in 2009 to become the world’s second largest economy. However when measured on a per capita basis, China’s economy still remains comparatively small – within the ‘middle income’ band.
In late June, China’s politburo agreed to fiscal and taxation reforms that were outlined at last year’s Third Plenum, setting a deadline for implementation at the end of 2016. These reforms should provide greater transparency and predictability of local government revenues.
As China’s economy has grown over the past decade, so too has China’s overseas investment. This has become a highly controversial issue in a number of countries, in part due to the difficulties faced by firms and individuals when attempting to invest in China
Partial economic indicators suggest that China’s economy has stabilised in recent months. These trends remain in line with our expectations, meaning that our forecasts for economic growth remain unchanged at 7.3% in 2014 and 7% in 2015.
China’s steel industry is the largest in the world and a key consumer of Australian commodity exports. The industry has been suffering in recent times due to excess capacity, weak profitability and its role in the air pollution crisis, prompting Government plans to rationalise the sector...
Partial economic indicators continue to highlight softening trends in China, evident since the latter part of 2013. These trends remain in line with our expectations, and as such, our forecasts for Chinese economic growth are unchanged at 7.3% in 2014 (before slowing to 7% in 2015).
Trends for bulk commodity prices were mixed in April, with relative stability (at very weak levels) for both thermal and metallurgical coal, while iron ore briefly recovered from the low levels in March, before retreating again.
There have been concerns around China’s residential property market for a number of years, with bearish observers repeatedly describing the market as a bubble. In March 2014, these fears were elevated by the collapse of the Zhejiang Xingrun Real Estate Company.
There were few surprises in the latest Chinese data release, with the weakening trends evident since the latter part of last year continuing into the first quarter of 2014, with slower economic growth, comparatively soft industrial production and investment data continuing
Early this month saw China’s first onshore corporate default, when a Shanghai based solar company defaulted on its bond repayments of RMB 89.8 million (around US$14.7 million). This has been followed this week with a collapse of an unlisted private property development company.
In early March, China recorded its first domestic corporate bond default when the Shanghai Chaori Solar Energy Science & Technology Company failed to make a RMB 89.8 million interest payment, having narrowly avoided a similar outcome in January 2013.
At the start of this month’s National People’s Congress, Premier Li Keqiang confirmed China’s growth target at ‘about 7.5%’ in 2014, but noted that reform was the Government’s top priority.
Concerns have been raised by the rapid growth in local government liabilities in recent years, with questions around the stability and security of China’s sub-sovereign debt, and the risk that a potential default could trigger a broader financial crisis.
Bulk commodity prices softened in January, driven by the end of the restocking phase and seasonally weak steel production - which contributed to weaker demand trends for coal and iron ore. Expanding rail freight capacity in China could impact the country’s demand for seaborne coal
One of the key challenges in 2014 for China’s Central Government will be how it addresses the ongoing issue of air pollution across the country. Rising levels of smog and hazardous PM 2.5 particles have increased public health concerns.
China’s latest National Accounts data shows that the economy grew by 1.8% quarter on quarter in December, and 7.7% year on year - representing a marginal slowdown from the September quarter (when yoy growth was 7.8%).
Online sales growth edges up in September – to +0.3% mom (from even weaker sales in August). Sales trends mixed by category. In the year to September 2013, Australia’s online retail spending totaled $14.3 billion. This is equivalent to 6.3% of the traditional bricks & mortar retail sector
Stronger conditions for ASX 300 in Q2 - widening the gap to the economy - but confidence fell sharply. Mining conditions fell, now the weakest among ASX 300 firms. Discounting among ASX 300 may be evident. Stocks & orders point to weakness in domestic economy.
The Manufacturing Activity Index was largely unchanged in Q3 – with positive trends for business confidence offset by negative ones for labour and purchase costs and final product prices. The index implies a slight increase quarterly manufacturing activity - at around +0.4%.
In the year to August 2013, Australians spent $14.2 bn on online retail. This level is equivalent to 6.3% of spending with traditional bricks & mortar retailer (excluding cafés, restaurants and takeaway food to create a like-for-like comparison) in the year to July 2013.
Online sales growth slowed to +14% yoy in June - the second slowest rate recorded. Fewer Fridays and a lack of product launches may have contributed to subdued growth. In the twelve months to June 2013, Australian online retail spending totalled $13.9 billion.
For the year to May 2013, Australians spent around $13.7 billion with online retailers. This is equivalent to 6.1% of the spending in the traditional bricks & mortar retail sector (excluding cafés, restaurants and takeaway food for a like-to-like comparison) in the year to April 2013.
Online sales growth slowed in March to +15% yoy, with sales possibly impacted by the absence of new flagship tablet release. In the twelve months ending March 2013, Australian online retail purchases were $13.3 billion.
The Manufacturing Activity Index improved in Q1, up to neutral levels – driven largely by less negative levels for business confidence. The index implies no growth in quarterly manufacturing activity – which would represent a slowdown according to recent official data.
Online Retail Sales Index weaker in February. Sales grew by +19% yoy in the month, the weakest growth rate since May 2012. For the twelve months ending February 2013, Australia’s online retail spending totaled $13.1 billion. This level is equivalent to around 5.9% of Australia’s …
Online Retail Sales Index dipped in December (from Nov peak) – a seasonal trend around Christmas. Sales up 23% yoy, but slowing implying a ‘weaker online’ December. In 2012, Australia’s online retail spending was $12.8 billion. This level is around 5.8% of the size of Australia’s.
Online Retail Sales Index surges ahead of Christmas, but year-on-year growth only edged higher to 27%. In the twelve months to November 2012, Australians spent around $12.6 billion on online retail. This level is equivalent to 5.7% of the scale of traditional bricks & mortar retail
The Manufacturing Activity Index was unchanged in Q3 – despite diverging trends in the index components – remaining at negative levels. The index indicates further falls in Manufacturing growth in the quarter, which remains burdened by global economic trends and the strength of the dollar
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