Last quote by Zhou Hao
Zhou Hao quotes
The current strict policy tone will persist, which could add pressure to growth in the coming quarters.
This is part of the 'risk control' policy package as shadow banking activities have picked up strongly due to monetary easing.
Investors should remember that the Chinese authorities attempts to reduce leverage in the stock market in 2015 ended disastrously.
It is a good time for China to deliver on structural reform, especially on the SOE side, to restore confidence in the economy.
It is very clear that the data is improving because of the property market. This is not sustainable.
While many factories have been shut down before the G20 summit, overall manufacturing activities are still elevated, reflecting improving growth momentum.
People are worried about a lack of solid demand over the next few years so they aren't really investing, especially in capex, which is the driving factor of the slowing investment.
It seems to me China's central bank has put a brake on CNY depreciation, at least temporarily.
Given the gloomy economic outlook, we believe that the overall Asian trade growth will have limited upside this year.
Looking ahead, we believe that the pressure on CNY will moderate somewhat, while the capital outflows are likely to continue over the foreseeable future.
The move is likely to become the turning point of the property policy in the big cities.
In the past few months, the PBOC intervened intensively to prevent a fast depreciation of CNY, and many believe that they have also stepped into the FX forward market.
Clearly, the market sees that the intensive intervention from PBoC (People's Bank of China) is not sustainable, and therefore the central bank will have to let the currency go at some point.
In the meantime, China has started an aggressive capacity reduction in many sectors, which could add downward pressure on the bulk commodity prices over time.
The electricity production remained sluggish and the crude steel output continued the weak trend in January, reflecting an ongoing deleveraging process in the industrial sectors.
The huge level of individual and corporate savings which exist in China at present obviously cannot find a reasonable return on investment in China.
While headline growth looks fine, the breakdown of the figures points to overall weakness in the economy. All in all, we believe that China will experience a 'bumpy landing' in the coming year.
All in all, it appears that the Chinese authorities want to dampen the speculative flows that bet on a fast depreciation of its currency.
The inflation profile remains soft and the continuous PPI deflation suggests that Chinese companies will have to reduce their debt as further expansion in many industries will only lead to more loss.
The sudden movement in the fixing rate would create more market volatility and suggested Chinese authorities were willing to tolerate more weakness in the currency for the time being.