Chinese policymakers may see the banking crises in the West as the result of policy errors in recent years and will avoid massive fiscal or monetary loosening.
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China has shown decent growth in the first two months, but confidence remains a big issue.
Despite a conservative GDP growth target and budget deficit, we maintain that growth can reach 6% this year.
Market concerns about the scale of China’s economic recovery post-reopening are likely to be overblown.
Commercial NEVs could become the fastest growing segment in the next three years while the passenger market sees slower growth and increased competition.
Corporate loans accounted for the bulk of new credit, but it is unclear how the loans are being used; households have remained reluctant to add leverage.
Demand and time deposits show excess savings, but a consumption comeback is primarily linked to spending a higher share of income.
A Chinese balloon flying over the US has intensified US-China tensions, paving ways for more restrictions on Chinese companies.
While consumption held back growth in 2022, it promises to be a key driver in 2023, as households shift to spending more due to the normalization of daily life after zero-Covid.
Manufacturing and construction firms may face structural labor shortages due to reliance on migrant workers who are retiring and increasingly travel-averse.