The Remorseless Logic of Capital Outflows from China

China is in the midst of a debt-deflationary bust.  It is an ongoing process that has gathered pace recently.  Capital outflows are a symptom of this, and a weaker yuan is an integral part of the attempted cure.  We expect more of this to come. We wrote back in the...

Old habits die hard in China as FX reserve growth surges

Investors welcomed the vow made last year by the new Chinese government to reform the economy  through a clamp-down on shadow banking and excess liquidity as well as to commit to a strategy of re-balancing the economy. Still, it seems difficult for China to break out...

The Great Brick Wall of China

In this report we discuss the outlook of the Chinese economy across a number of key parameters: re-balancing the economy, the current account/exchange rate and the risks stemming from rapid credit expansion. The central thrust of our argument is that China will not...

Disappointing development in Chinese leading indicators

Our leading indicator for China has turned down further which adds to the impression of an overall weak turn in Chinese growth.  We would still term the turning point as intact, but all components of our leading indicator recently came in with negative readings. This...