July economic data were bad across almost every category, and August is likely to be another very bad month.
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The Politburo acknowledged at its Monday meeting that the economy is facing difficulties and pledged to offer more support.
Whether and how most companies will be affected is still unclear, but some foreign investors may be spooked by the uncertainty in the meantime.
Exports and real estate continue to be a drag on the economy, but household spending is recovering well.
The RMB’s share in global forex reserves has declined despite higher allocations by central banks in Russia and Brazil.
More support for the housing market is in the cards, but the best outcome is stability instead of a big boom.
A drought this summer could mean another power crisis in Sichuan, and existing measures do not seem to go far enough to combat this risk.
Supportive policies are back amid Beijing’s concerns about growth; past experiences suggest they could help put NEV sales over 9mn this year.
Chinese assets have all returned to their levels at the beginning of 2023 and the market is eager for more policy supports by Beijing.
China’s growth momentum slowed in April, with the housing market being the biggest drag through souring sales and construction.