anz greater china economic insight incl regional chartbook - 14 may 2013
TRANSCRIPT
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GREATER CHINA ECONOMICS
ANZ RESEARCH
WEEKLY INSIGHT
14 MAY 2013
INSIDE
Data Preview and Review 2
Greater China Chartbook 3
China 4Taiwan 11
Hong Kong 15
China Liquidity Report 20
Forecasts 21
Important Notice 22
CONTRIBUTORS
Li-Gang Liu
Chief Economist, Greater [email protected]
Raymond YeungSenior Economist, Greater China
Hao Zhou
China [email protected]
Louis LamEconomist, Greater China
GREATER CHINA ECONOMICS CHARTBOOK
China: Aprils activity data indicates that growth momentum remains sluggish.
As the risk of inflation diminishes on the near-term horizon, we believe the
monetary policy stance has turned more supportive to growth. As central
banks in the region cut interest rates and used intervention to ease the
pressures of currency appreciation, we see an increasing likelihood for the
PBoC to cut the policy rate by 25bps. This will reduce the incentive for capital
inflows which may actually risk overheating the property sector. After all, real
estate prices are determined by the supply-demand conditions and the sector
is still subject to other property tightening measures.
However, monetary policy alone will have limited impact on the economicrebalancing. To some extent, an overly supportive credit policy is likely to
worsen Chinas overcapacity problems. We thus argue that China should
accelerate the structural reforms to sustain economic growth, such as reducing
tax burdens on the services sector, deregulation and encouraging competition,
interest rate liberalization, and deepening capital market developments to
regain growth impetus.
Taiwan: The economy contracted in Q1 on weak demand from major markets
including China, the US and the EU. However, investment rose strongly as the
global electronic cycle continued to support Taiwans electronic producers.
However, the weak yen has started to dampen export orders on valuation
effects when expressed in USD terms.
Hong Kong: GDP flattened in Q1, in line with the downside surprise we saw
for China and Taiwan. Private consumption held up and was the biggest
contributor to helping the citys state maintain positive growth. However,
attention should be paid to any sharp correction of property prices as it forms
a large part of household wealth.
CHINA MARKET LIQUIDITY REPORT
The PBoC resumed the issuance of the 3-month bills for the first time since
December 2011, to offset capital inflows as overseas investors pump money
into the country to take advantage of the yuans rise.
CHART OF THE WEEK
Chinas strong credit extension failed to translate into activity growth
China - Total Social Financing
(RMB bn)
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
TotalSocial
Financing
RMBLo
an
Foreign
Currency
Loan
Entrusted
Loan
TrustLo
an
Banker
's
Acceptan
ce
Draft
NetCorp
Bon
d
Non
-
Finan
cial
Equity
Jan-Apr 2012 Jan-Apr 2013
Sources: CEIC, ANZ
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DATA PREVIEW & REVIEW
GREATER CHINA ECONOMIC DATA CALENDAR
DATE COUNTRY DATA/EVENT PERIOD CONSENSUS LASTTIME
(HK/SG)14-18 May China Actual FDI (y/y) Apr 6.20% -- -
18 May China Property Prices Apr -- -- 9:30
20 May Taiwan Export Orders (y/y) Apr -- -6.60% 16:00
20 May Taiwan Current Account Balance (USD) Q1 -- 15.96Bn 16:20
20 May Hong Kong Unemployment Rate sa Apr -- 3.50% 16:30
21 May Hong Kong CPI - Composite Index (y/y) Apr -- 3.60% 16:30
Source: Bloomberg
WEEK IN REVIEW
DATE COUNTRY DATA/EVENT PERIOD CONSENSUS ACTUAL LAST
07 May Taiwan Trade Balance (USD) Apr 1.57bn 2.27bn 3.20bn
07 May Taiwan Exports (y/y) Apr 3.10% -1.90% 3.30%
07 May Taiwan Imports (y/y) Apr 0.30% -8.20% 0.20%
07 May Hong Kong Foreign Reserves (USD) Apr -- 306.5bn 303.8bn
08 May China Trade Balance (USD) Apr 16.15bn 18.16bn -0.88bn
08 May China Exports (y/y) Apr 9.20% 14.70% 10.00%
08 May China Imports (y/y) Apr 13.00% 16.80% 14.10%
09 May China CPI (y/y) Apr 2.30% 2.40% 2.10%
09 May China Producer Price Index (y/y) Apr -2.30% -2.60% -1.90%
10 May China New Yuan Loans (RMB) Apr 755.0bn 792.9bn 1060.0bn
10 May China Money Supply - M0 (y/y) Apr 12.00% 10.80% 12.40%
10 May China Money Supply - M1 (y/y) Apr 11.00% 11.90% 11.90%
10 May China Money Supply - M2 (y/y) Apr 15.50% 16.10% 15.70%
10 May China Total Social Financing (RMB) Apr 1.5trn 1.75trn 2.54trn
10 May Hong Kong GDP sa (q/q) Q1 0.50% 0.20% 1.20%
10 May Hong Kong GDP (y/y) Q1 2.70% 2.80% 2.50%
13 May China Industrial Production YTD (y/y) Apr 9.50% 9.40% 9.50%
13 May China Industrial Production (y/y) Apr 9.40% 9.30% 8.90%
13 May China Fixed Assets Investment YTD (y/y) Apr 21.00% 20.60% 20.90%
13 May China Retail Sales YTD (y/y) Apr 12.60% 12.50% 12.40%
13 May China Retail Sales (y/y) Apr 12.80% 12.80% 12.60%
Source: Bloomberg
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GREATER CHINA CHARTBOOK
OVERVIEW: STRONG CREDIT EXTENSION FAILED TO TRANSLATE INTO ACTIVITY GROWTH
China: While Chinas activity data improved somewhat in April, growth momentum remains sluggish. The
improvement in the headline industrial growth figures is largely due to a low base effect of last year.
Trade growth remained strong in April, following a surge in the past two quarters. However, we doubt thestrong external performance. The trade data defies the weak trade data reported in other regionaleconomies. Our previous study (ANZ Greater China Insight, 7 May 2013) indicates thatexporters/importers may use cross-border trade for financial gains.
CPI inflation rebounded modestly to 2.4% y/y in April, from Marchs 2.1%, slightly higher than marketexpectations (2.3%). However, PPI declined by 2.6% y/y in April, compared with -1.9% in March,reflecting the recent pullback in raw material prices.
Credit and money supply grew strongly in April, suggesting that domestic monetary conditions have beensubject to strong pressure from capital inflows.
We believe that the mild inflation outlook, together with sluggish domestic demand, has set the rightconditions for a rate cut. The RMB is under significant appreciation pressure owing to the widening interest
rate differentials between RMB and other key currencies in the world, especially after the recent ECB, RBAand BoK's rate cuts. Lowering the interest rate differentials will help dampen the capital inflows, whilefalling inflation will offset the risk of negative carry in deposit rates. Meanwhile, the PBoC could allow banksto raise their deposit rates to up to 1.2 times the policy rate. This policy will not only push forward interestrate liberalisation but also reduce the possibility of a negative real interest rate.
Taiwan: Q1 GDP contracted 0.81% saqr, as global economic recovery failed to gain traction. Weakexternal demand dragged on the economy, reflecting the slowdown in Mainland China and the EU. Webelieve momentum will pick up mildly in Q2 and accelerate through the rest of the year, in conjunctionwith the pick up in China and the US. Domestically, investment should continue to be the main driver, asinvestment from electronic producers remains upbeat.
Hong Kong: Hong Kongs headline GDP grew 2.8% y/y in Q1. Sequentially, the economy barely expandedwith a 0.2% q/q sa gain. This is in line with the downside surprise we saw for China and Taiwan. Privateconsumption held up and was the biggest contributor to helping the citys state maintain positive growth.
China - Domestic Demand Indicators
(y/y)
5
7
9
11
13
15
17
Oct
10
Jan
11
Apr
11
Jul
11
Oct
11
Jan
12
Apr
12
Jul
12
Oct
12
Jan
13
Apr
13
Industrial Production, y/y Real Retail Sales, y/y
China - Inflation
(y/y)
-6
-4
-2
0
2
4
6
8
10
Oct
10
Jan
11
Apr
11
Jul
11
Oct
11
Jan
12
Apr
12
Jul
12
Oct
12
Jan
13
Apr
13
CPI PPI
Taiwan - Contributions to GDP Growth
(ppt)
-6
-4
-20
2
4
6
810
12
14
Jun
10
Sep
10
Dec
10
Mar
11
Jun
11
Sep
11
Dec
11
Mar
12
Jun
12
Sep
12
Dec
12
Mar
13
Private Consumption Government Consumption
Investment Change in Stocks
Net Exports y/y
Hong Kong - Contributions to GDP Growth
(ppt)
-10
-5
0
5
10
15
Sep
10
Dec
10
Mar
11
Jun
11
Sep
11
Dec
11
Mar
12
Jun
12
Sep
12
Dec
12
Mar
13Private Consumption Government Consumption
Investment Changes in Inventories
Net Exports Total, y/y
Sources: Bloomberg, CEIC, ANZ
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CHINA
REAL ACTIVITY: THE ACTIVITY DATA IMPROVED MODESTLY ON BASE EFFECTS
Industrial production growth rebounded to 9.3% y/y in April, but was weaker than expected, compared
with Marchs 8.9%. Meanwhile, electricity production rose 6.2% y/y, up from 2.1% in the previousmonth.
Fixed asset investment decelerated to 20.6% y/y in January-April, below consensus forecasts, versus20.9% in January-March, indicating that Chinas fiscal spending could have slowed in the month.
Retail sales grew in line with market expectations, gaining 12.8% y/y in April, 0.2ppt higher thanMarch.
On a m/m basis, while industrial production picked up modestly in the month, retail sales and fixedasset investment slowed in April.
The official Purchasing Managers Index eased again to 50.6 in April, suggesting that Chinas economicrecovery remains tepid.
China - GDP Growth
0
2
4
6
8
10
12
14
16
18
20
2005 2006 2007 2008 2009 2010 2011 2012 2013
y/y q/q, saar
China - Contribution to GDP Growth
-5
0
5
10
15
20
02 03 04 05 06 07 08 09 10 11 12 13Q1
Consumption Investment Ne t Exports GDP, y/y
China - Electricity Production and Industrial
Production (y/y)
-5
0
5
10
15
20
25
Apr
10
Jul
10
Oct
10
Jan
11
Apr
11
Jul
11
Oct
11
Jan
12
Apr
12
Jul
12
Oct
12
Jan
13
Apr
13
5
7
9
11
13
15
17
19
Electricity Production Industrial Production (RHS)
China - Fixed Asset Investment
(ytd, y/y)
18
19
20
21
22
23
24
25
26
27
28
Oct
10
Jan
11
Apr
11
Jul
11
Oct
11
Jan
12
Apr
12
Jul
12
Oct
12
Jan
13
Apr
13
China - Retail Sales
(y/y)
10
15
20
25
Oct
10
Jan
11
Apr
11
Jul
11
Oct
11
Jan
12
Apr
12
Jul
12
Oct
12
Jan
13
Apr
13
China - Official Manufacturing PMI
45
47
49
51
53
55
57
59
61
Apr
10
Jul
10
Oct
10
Jan
11
Apr
11
Jul
11
Oct
11
Jan
12
Apr
12
Jul
12
Oct
12
Jan
13
Apr
13
Headline New Orders New Export Orders
Sources: NBS, CEIC, ANZ
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CHINA
EXTERNAL TRADE: TRADE REMAINED STRONG ON HOT MONEY INFLOWS
Trade growth remained strong in April, following a surge in the past two quarters. Export growth
increased 14.7% y/y in April, compared with market expectations of a 9.2% gain and Marchs10.0%. Imports grew 16.8% y/y in April, following a 14.1% gain in the previous month, and higherthan consensus of a 13.0% gain. China registered a trade surplus of USD18.2bn, compared with adeficit of USD0.88bn in March.
Our previous study (ANZ Greater China Insight, 7 May 2013) found that much of the strong growthperformance was due to the sharp increase in Shenzhen-Hong Kong cross border trade. Meanwhile, theport throughput data remained soft for the past few months, suggesting that the real demand has notyet recovered. The inconsistency between port throughput and the headline trade growth shows thatmany Chinese exporters could have over-invoiced their trade value to take advantage of the interestrate differentials between onshore and offshore markets, and the RMBs steady appreciation since Julylast year.
China - Trade Developments
-40
-30
-20
-10
0
10
20
30
40
50
Oct
10
Jan
11
Apr
11
Jul
11
Oct
11
Jan
12
Apr
12
Jul
12
Oct
12
Jan
13
Apr
13
-40
-30
-20
-10
0
10
20
30
40
50
Trade Balance, $bn (RHS) Exports, y/y Imports, y/y
China's exports vs regional exports
(y/y, 3mma)
-10
-5
0
5
10
15
20
25
30
35
Oct
10
Jan
11
Apr
11
Jul
11
Oct
11
Jan
12
Apr
12
Jul
12
Oct
12
Jan
13
Apr
13
China Hong Kong Korea Taiw an
China - Exports by Destination(y/y, 3mma)
-20
-10
0
10
20
30
40
50
60
Oct
10
Jan
11
Apr
11
Jul
11
Oct
11
Jan
12
Apr
12
Jul
12
Oct
12
Jan
13
Apr
13
US EU NIE ASEAN
China - Imports by Origin(y/y, 3mma)
-10
0
10
20
30
40
50
Oct
10
Jan
11
Apr
11
Jul
11
Oct
11
Jan
12
Apr
12
Jul
12
Oct
12
Jan
13
Apr
13
US EU NIE ASEAN
China - Trade Balance
($bn 12m rolling sum)
100
120
140
160
180
200
220
240
Oct
10
Jan
11
Apr
11
Jul
11
Oct
11
Jan
12
Apr
12
Jul
12
Oct
12
Jan
13
Apr
13
-70
-60
-50
-40
-30
-20
-10
0
EU US Japan (RHS)
China - Trade Balance
($bn 12m rolling sum)
-200
-180
-160
-140
-120
-100
-80
-60
-40
-20
0
Oct
10
Jan
11
Apr
11
Jul
11
Oct
11
Jan
12
Apr
12
Jul
12
Oct
12
Jan
13
Apr
13
ASEAN-5 AU+NZ NIE ex HK
Sources: Bloomberg, CEIC, ANZ
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CHINA
MONETARY POLICY: MILD INFLATION AND SLUGGISH GROWTH PAVES WAY FOR A RATE CUT
The mild inflation outlook, together with sluggish domestic demand, has set the right conditions for a
rate cut. The RMB is under significant appreciation pressure owing to the widening interest ratedifferentials between RMB and other key currencies in the world, especially after the recent ECB, RBAand BoK's rate cuts. Lowering the interest rate differentials will help dampen the capital inflows, whilefalling inflation will offset the risk of negative carry in deposit rates. Meanwhile, the PBoC could allowbanks to raise their deposit rates to up to 1.2 times the policy rate. This policy will not only pushforward interest rate liberalisation but also reduce the possibility of a negative real interest rate.
New yuan loans were RMB792.9bn, lower than Marchs RMB1.06trn, but higher than the marketexpected. Social financing, a measure of funds raised by entities in the real economy, amounted toRMB1.75trn in April, an increase of RMB783.3bn from last year. By the end of April, the broad measureof money supply (M2), which covers cash in circulation and all deposits, increased 16.1% y/y toRMB103.3trn, compared with Marchs 15.8%.
China - PBoC 1-year Lending Rate
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
2006 2007 2008 2009 2010 2011 2012 2013
China - Reserve Requirement Ratio
4
6
8
10
12
14
16
18
20
22
24
2006 2007 2008 2009 2010 2011 2012 2013
China - M2 and Credit
10
15
20
25
Oct
10
Jan
11
Apr
11
Jul
11
Oct
11
Jan
12
Apr
12
Jul
12
Oct
12
Jan
13
Apr
13
M2, y/y Credit, y/y
China - Total Social Financing
(RMB bn)
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
TotalSocial
Financing
R
MBLoan
Foreign
Currency
Loan
E
ntrusted
Loan
Tr
ustLoan
B
anker's
Acceptance
Draft
NetCorp
Bond
Non-
Financial
Equity
Jan-Apr 2012 Jan-Apr 2013
China - New Yuan Loans
(RMB bn)
0
200
400
600
800
1,000
1,200
Apr
10
Jul
10
Oct
10
Jan
11
Apr
11
Jul
11
Oct
11
Jan
12
Apr
12
Jul
12
Oct
12
Jan
13
Apr
13
China - PBoC Weekly Open Market Operations
(RMB bn)
-1,000
-800
-600
-400
-200
0
200
400
600
800
1,000
03
Dec
17
Dec
31
Dec
14
Jan
28
Jan
11
Feb
25
Feb
11
Mar
25
Mar
08
Apr
22
Apr
C B Bill Matured Repo Matured Reverse Repo
CB Bill Repo Rev. Repo Matured
Net
Liquidity Injection
Liquidity Withdrawal
Sources: Bloomberg, CEIC, PBoC, ANZ
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CHINA
PROPERTY MARKET: PRICES PICK UP FURTHER IN MARCH
The ANZ property price index rose 4.2% y/y in March, up from 2.2% the previous month, indicating a fast
acceleration in price momentum.
New residential property prices rose in 68 of 70 cities m/m in March, compared with 66 in February. On ay/y basis, prices increased in 67 cities. Notably, housing prices surged in first tier cities, with Beijing,Shanghai, Guangzhou and Shenzhen up 8.6% y/y, 6.4%, 11.1% and 8.9% respectively.
Property transactions in major cities slowed down significantly in April, after a strong performance inMarch, as more curbing policies gets rolled out.
China - Property Price Index
(y/y)
-4
-2
0
2
4
6
8
10
12
14
16
18
2005 2006 2007 2008 2009 2010 2011 2012 2013
Official Property Price Index ANZ Property Price Index
China - First Tier City New Residential Property
Prices (y/y)
-4
-2
0
2
4
6
8
10
12
Jan
11
Mar
11
May
11
Jul
11
Sep
11
Nov
11
Jan
12
Mar
12
May
12
Jul
12
Sep
12
Nov
12
Jan
13
Mar
13
Beijing Shanghai Guangzhou Shenzhen
China - 70 City New Residential Property Price
(number of cities m/m change)
0
10
20
30
40
50
60
70
Mar
11
May
11
Jul
11
Sep
11
Nov
11
Jan
12
Mar
12
May
12
Jul
12
Sep
12
Nov
12
Jan
13
Mar
13
Decrease No C hange Increase
NumberofCities
China - 70 City New Residential Property Price
(number of c ities y/y change)
0
10
20
30
40
50
60
70
Mar
11
May
11
Jul
11
Sep
11
Nov
11
Jan
12
Mar
12
May
12
Jul
12
Sep
12
Nov
12
Jan
13
Mar
13
Decrease No Change Increase
NumberofCities
China - First Tier City Property Transactions
(thousand sq m, 30-day moving sum)
0
500
1,000
1,500
2,000
2,500
3,000
Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13
0
100
200
300
400
500
600
700
Beijing Shanghai Guangzhou Shenzhen (RHS)
China - Floor Space Started and Sold
(y/y)
-40
-30
-20
-10
0
10
20
30
40
50
60
Sep
10
Dec
10
Mar
11
Jun
11
Sep
11
Dec
11
Mar
12
Jun
12
Sep
12
Dec
12
Mar
13
Floor Space Started Floor Space Sold
Sources: Bloomberg, CEIC, ANZ
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TAIWAN
REAL ACTIVITY: Q1 GDP DRAGGED BY POOR GLOBAL DEMAND
Q1 GDP (advance estimate) slowed to 1.54% y/y, from 3.72% in Q4, much lower than market
expectations of 3.1%. Sequentially, the economy contracted 0.81% saqr or 3.21% saar. Globaleconomic recovery failed to gain traction and weak external demand dragged on the economy, reflectingthe slowdown in Mainland China and the EU.
We believe momentum will pick up mildly in Q2 and accelerate through the rest of the year, inconjunction with the pick up in China and the US. Domestically, investment should continue to be themain driver, as investment from electronic producers remains upbeat.
Industrial production declined 3.28% y/y in March, from an 11.61% contraction in February. Meanwhilecommercial sales fell 0.65% y/y, from -6.00% previously, but still below market expectations. Globaland regional economic conditions have weighed on the domestic economy.
Taiwan - Real GDP Growth
-10
-5
0
5
10
15
20
25
Mar
09
Jul
09
Nov
09
Mar
10
Jul
10
Nov
10
Mar
11
Jul
11
Nov
11
Mar
12
Jul
12
Nov
12
Mar
13
y /y q/q, saar
Taiwan - Contributions to GDP Growth
(ppt)
-6
-4
-20
2
4
6
810
12
14
Jun
10
Sep
10
Dec
10
Mar
11
Jun
11
Sep
11
Dec
11
Mar
12
Jun
12
Sep
12
Dec
12
Mar
13
Private Consumption Government Consumption
Investment Change in Stocks
Net Exports y/y
Taiwan - Economic Activities
(y/y)
-25
-20
-15
-10
-5
0
5
10
15
20
25
May
11
Jul
11
Sep
11
Nov
11
Jan
12
Mar
12
May
12
Jul
12
Sep
12
Nov
12
Jan
13
Mar
13
Commercial sales Industr ial production
Exports Imports of Machineries
Export orders
Taiwan - Commercial Sales
(y/y)
-15
-10
-5
0
5
10
15
20
25
Sep
10
Dec
10
Mar
11
Jun
11
Sep
11
Dec
11
Mar
12
Jun
12
Sep
12
Dec
12
Mar
13
Commercial Sales Wholesale Trade Retail Trade
Taiwan - Industrial Production Index
-20
-15
-10
-5
0
5
10
15
20
25
Sep
10
Dec
10
Mar
11
Jun
11
Sep
11
Dec
11
Mar
12
Jun
12
Sep
12
Dec
12
Mar
13
40
60
80
100
120
140
160
y/y Index (RHS)
Taiwan - Industrial Production
of Major Sectors
(y/y)
-30
-20
-10
0
10
20
30
40
50
Sep
10
Dec
10
Mar
11
Jun
11
Sep
11
Dec
11
Mar
12
Jun
12
Sep
12
Dec
12
Mar
13
Electronic Parts Basic Metal
Chemical Materia ls Tech Products
Sources: CEIC, ANZ
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TAIWAN
EXTERNAL TRADE: EXPORTS CONTRACTED IN APRIL
Exports contracted by 1.9% y/y in April, from a 3.3% gain in March, reflecting a general softening ofglobal demand. Electronic exports, however, remained resilient and gained 3.4% y/y. Imports
contracted 9.2% y/y in April, from a 0.2% increase in March. The sharp decline of imports was largelydue to a 21% y/y reduction in oil imports. The trade surplus narrowed to USD2.27bn, from USD3.20bn.
Exports to the Mainland and Hong Kong edged up 0.2% y/y. Exports to US, Japan and ASEAN6 gained4.9%, 1.9% and 0.6% respectively. However, shipments to Europe declined sharply by 19.3% y/y. JPYweakness appeared to affect Taiwans exports and export orders differently. As shipments to Japan rose
9% y/y in the first four months while sales order from Japanese buyers declined in Q1, suggesting thatthe weak yen has affected Taiwans manufacturers at the regional level instead of domestic producers.
Export orders fell 6.6% y/y in March, following a 14.5% contraction in February and much lower thanthe market expectation of a 1.9% increase. Notably, orders from Japan dropped 15.6% y/y, suggestingthe weakening JPY is starting to have an impact on export orders on a weaker JPY/USD valuation.
Taiwan - Trade Developments
-20
-10
0
10
20
30
40
50
Apr
11
Jun
11
Aug
11
Oct
11
Dec
11
Feb
12
Apr
12
Jun
12
Aug
12
Oct
12
Dec
12
Feb
13
Apr
13
-2
-1
0
1
2
3
4
5
Trade Balance, $bn (RHS) Exports, y/y Imports, y/y
Taiwan - Exports Comparison with South Korea
(y/y)
-20
-15
-10
-5
0
5
10
15
20
25
30
Apr
11
Jun
11
Aug
11
Oct
11
Dec
11
Feb
12
Apr
12
Jun
12
Aug
12
Oct
12
Dec
12
Feb
13
Apr
13
Taiwan South Korea
Taiwan - Exports by Destination
(y/y)
-40
-30
-20
-10
0
10
20
30
40
50
Apr
11
Jun
11
Aug
11
Oct
11
Dec
11
Feb
12
Apr
12
Jun
12
Aug
12
Oct
12
Dec
12
Feb
13
Apr
13
Asia ex Mainland & HK HK Mainland Europe US
Taiwan - Imports by Origin
(y/y)
-40
-30
-20
-10
0
10
20
30
40
50
60
Apr
11
Jun
11
Aug
11
Oct
11
Dec
11
Feb
12
Apr
12
Jun
12
Aug
12
Oct
12
Dec
12
Feb
13
Apr
13
-90
-60
-30
0
30
60
90
120
150
180
Asia ex Ma inland & HK Ma inland Europe US HK (RHS)
Taiwan - Export Orders
-20
-10
0
10
20
30
40
50
Mar
10
Jun
10
Sep
10
Dec
10
Mar
11
Jun
11
Sep
11
Dec
11
Mar
12
Jun
12
Sep
12
Dec
12
Mar
13
20,000
23,000
26,000
29,000
32,000
35,000
38,000
41,000
44,000
y/y Export Orders in USD (RHS) Export Orders 12mma
Taiwan - Export Orders by Market
(y/y)
-30
-20
-10
0
10
20
30
40
May
11
Jul
11
Sep
11
Nov
11
Jan
12
Mar
12
May
12
Jul
12
Sep
12
Nov
12
Jan
13
Mar
13
China/HK Europe Japan ASEAN6 US
Sources: CEIC, ANZ
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TAIWAN
PRICES: INFLATION REMAINED BENIGN IN APRIL
Headline inflation rose 1.04% y/y in April, down from 1.37%. Core CPI excluding vegetables and energy
climbed only 0.86% y/y. Food price rose 2.36% y/y, underpinned by the sharp increase in weatheraffected vegetable prices which surged 8.23%. Medical and health expenses increased 1.35% y/y duepartly to rising prices for Chinese herbs. Housing costs increased by 1.23% y/y, due to the low base ofcomparison after gas prices were allowed to rise by 6.35% last June.
Headline producer prices continue to drop further by 3.69% y/y. For the first 4 months of 2013, WPIdropped 3.23% y/y. Prices of metal, chemical and petroleum products dropped. The decline should havebeen wider as there was a lower base prior to the electricity rate rise in June 2012.
Inflation is not likely to be a concern for Taiwans economy. The weak yen and subsided commodityprices should continue to lower imported inflation in the coming months. As the upward adjustment ofelectricity fees was made last June, the base effect will begin in June this year.
Taiwan - CPI Momentum & Output Gap
-10
-8
-6
-4
-2
0
2
4
6
2006 2007 2008 2009 2010 2011 2012
GDP Actual-Po tential Gap, % CPI
Taiwan - Contribution to CPI Inflation
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.54.0
Jun 12 Aug 12 Oct 12 Dec 12 Feb 13 Apr 13
Food Rental
Housing ex . Rental Transportation
Education & Entertainment Other
CPI, y/y
Taiwan - Headline and Core CPI
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Oct
10
Jan
11
Apr
11
Jul
11
Oct
11
Jan
12
Apr
12
Jul
12
Oct
12
Jan
13
Apr
13
CPI
CPI ex Food & Energy
CPI ex Fruits, Vegetables, Fish, Shellfish & Energy
Taiwan - CPI and Real Interest Rate
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Oct
10
Jan
11
Apr
11
Jul
11
Oct
11
Jan
12
Apr
12
Jul
12
Oct
12
Jan
13
Apr
13
Real interest rate: 1-year Term Deposits minus CPI Inflation 3mmaCPI y/y 3mma
Taiwan - WPI
-6
-4
-2
0
2
4
6
8
10
Oct
10
Jan
11
Apr
11
Jul
11
Oct
11
Jan
12
Apr
12
Jul
12
Oct
12
Jan
13
Apr
13
-3
-2
-1
0
1
2
3
4
5
m/m sa (RHS) y/y
Taiwan - Import Price Index
(y/y)
-10
-5
0
5
10
15
20
25
Oct
10
Jan
11
Apr
11
Jul
11
Oct
11
Jan
12
Apr
12
Jul
12
Oct
12
Jan
13
Apr
13
ImPI in TWD ImPI in USD
Sources: CEIC, ANZ
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TAIWAN
MONETARY AND RATE POLICIES: CBC TO HOLD IN JUNE
We believe the CBC will not cut rates in response to sluggish growth given generally relaxed liquidity
conditions. With a stable CPI, the central bank will be inclined to hold the policy rate at its June meeting.We believe the increasingly volatile currency market will prompt the CBC to watch for a stable exchangerate regime. We maintain our forecast that the first policy rate hike will occur in Q4 2013 at the earliest.
On the exchange rate front, the CBC has recently issued a report which suggests that it is not worriedabout losing export competitiveness in view of the yen weakening as the KRW appears to appreciateagainst the JPY more than that for the TWD. We believe the central bank will continue to ensure anorderly function of the foreign exchange market and will emphasize stability in response to globalcurrency volatility.
Taiwan - Money Supply
(y/y)
0
2
4
6
8
10
12
14
Sep
10
Dec
10
Mar
11
Jun
11
Sep
11
Dec
11
Mar
12
Jun
12
Sep
12
Dec
12
Mar
13
M1b M2
Taiwan - Money Market Interest Rates (bps)
0
20
40
60
80
100
120140
160
180
200
Aug
10
Nov
10
Feb
11
May
11
Aug
11
Nov
11
Feb
12
May
12
Aug
12
Nov
12
Feb
13
May
13
90-day Commercial Paper Interbank Overnight Rate
Rediscount Rate 10 y r Gov 't Bond Yield
Taiwan - TWD Exchange Rates
95
97
99
101
103
105
107
Feb
11
Apr
11
Jun
11
Aug
11
Oct
11
Dec
11
Feb
12
Apr
12
Jun
12
Aug
12
Oct
12
Dec
12
Feb
13
Apr
13
28
28
29
29
30
30
31
BIS NEER BIS REER TWD/USD Spot (RHS, inverted)
Taiwan - USDTWD vs USDKRW
(One year rolling index)
92
94
96
98
100
102
104
106
May
12
Jun
12
Jul
12
Aug
12
Sep
12
Oct
12
Nov
12
Dec
12
Jan
13
Feb
13
Mar
13
Apr
13
May
13
USDTWD USDKRW
Taiwan - RMB Deposits
(RMB mn)
0
10,000
20,000
30,000
40,000
50,000
60,000
Aug
11
Oct
11
Dec
11
Feb
12
Apr
12
Jun
12
Aug
12
Oct
12
Dec
12
Feb
13
Taiwan - Real Estate Loans
-30
-20
-10
0
10
20
30
40
50
60
70
80
Sep
10
Dec
10
Mar
11
Jun
11
Sep
11
Dec
11
Mar
12
Jun
12
Sep
12
Dec
12
Mar
13
42.0
42.2
42.4
42.6
42.8
43.0
43.2
43.4
43.6
43.8
44.0
Real Estate Loan, TWD bn
RE Loan as % of Banks' Loan Book (RHS)
Sources: CEIC, ANZ
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HONG KONG
REAL ACTIVITY: THE ECONOMY FLATTENED IN Q1
GDP grew 2.8% y/y in the first quarter. Sequentially, the economy barely expanded with a 0.2% q/q sagain. This is in line with the downside surprise we saw for China and Taiwan. Private consumption rose7.0% y/y, while investment contracted 2.2%. Goods exports and services exports rose 8.8% and 4.9%respectively, while imports of goods and services grew by 9.6% and 1.2% respectively.
Retail sales growth moderated to 9.8% y/y in March, compared with 22.7% in February. In Q1 retailsales increased 13.9% y/y, from 7.6% in Q4, reflecting better domestic consumption and inbound touristspending.
The unemployment rate edged up 0.1ppt to 3.5% (sa) in March. Non-seasonally adjusted constructionunemployment rate rose further, consistent with past seasonal factors.
Hong Kong - Contributions to GDP Growth
(ppt)
-10
-5
0
5
10
15
Sep
10
Dec
10
Mar
11
Jun
11
Sep
11
Dec
11
Mar
12
Jun
12
Sep
12
Dec
12
Mar
13
Private Consumption Government Consumption
Investment Changes in Inventories
Net Exports Total, y/y
Hong Kong - GDP
-4
-2
0
2
4
6
8
10
12
Mar
10
Jun
10
Sep
10
Dec
10
Mar
11
Jun
11
Sep
11
Dec
11
Mar
12
Jun
12
Sep
12
Dec
12
Mar
13
y/y q/q, saar
Hong Kong - Retail Sales
(y/y)
0
5
10
15
20
25
30
35
Sep
10
Dec
10
Mar
11
Jun
11
Sep
11
Dec
11
Mar
12
Jun
12
Sep
12
Dec
12
Mar
13
Value Volume
Hong Kong - Retail Sales Components
(y/y)
-20
-10
0
10
20
30
40
50
6070
Dec
10
Mar
11
Jun
11
Sep
11
Dec
11
Mar
12
Jun
12
Sep
12
Dec
12
Mar
13
Clothing & Footwear Moto r Vehic le s
Jewellery, Watches & C locks
Hong Kong - Unemployment Rate
0
2
4
6
8
10
12
14
Mar
09
Jul
09
Nov
09
Mar
10
Jul
10
Nov
10
Mar
11
Jul
11
Nov
11
Mar
12
Jul
12
Nov
12
Mar
13
Construction Overall economy Finance & Bus. Services
Hong Kong - Logistics Activities
(y/y)
-20
-15
-10
-5
0
5
10
15
20
25
May
11
Jul
11
Sep
11
Nov
11
Jan
12
Mar
12
May
12
Jul
12
Sep
12
Nov
12
Jan
13
Mar
13
Container Throughput (Sea) Passenger Movement (Air)
Air Cargo Throughput
Sources: CEIC, ANZ
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HONG KONG
EXTERNAL SECTOR: EXPORTS REBOUNDED IN MARCH ON CROSS-BORDER TRADE
Export growth rebounded to 11.2% y/y in March, from a 16.9% contraction February, driven by exports
to China. CNY effects subsided in March as exports to Mainland China rebounded strongly by 16.5% y/y,following a 23.1% drop in February. Exports to the US registered a modest growth of 0.4% y/y, from a4.6% decline. However shipments to Japan declined 0.6%, compared with -19.2 previously.
Imports increased 11.3% y/y, compared with -18.3% in the previous month. The trade deficit widenedto HKD49.1bn, from HKD34bn.
Our recent study (ANZ Greater China Insight 7, May 2013) found that the cross-border trade betweenHong Kong and the Mainland might reflect the problem of over-invoicing and was motivated by financialgains. As the Chinese authorities start to tighten regulations against non-genuine trades, these type offlows are likely to decline going forward.
Hong Kong - Trade Developments
-50
-40
-30
-20
-10
0
10
20
30
40
Sep
10
Dec
10
Mar
11
Jun
11
Sep
11
Dec
11
Mar
12
Jun
12
Sep
12
Dec
12
Mar
13
Trade Balance, HKD bn Exports, y/y Imports, y/y
Hong Kong - Exports by Destination
(y/y)
-30
-20
-10
0
10
20
30
40
50
Sep
10
Dec
10
Mar
11
Jun
11
Sep
11
Dec
11
Mar
12
Jun
12
Sep
12
Dec
12
Mar
13
US EU NIE ASEAN China
Hong Kong - Regional Contributions to ExportGrowth (ppt)
-20
-15
-10
-5
0
5
10
15
20
Mar 12 May 12 Jul 12 Sep 12 Nov 12 Jan 13 Mar 13
ASEAN EU US China
Japan NIEs Other Total, y/y
Hong Kong - Regional Contributions to ImportGrowth (ppt)
-25
-20
-15
-10
-5
0
5
10
15
20
25
30
Apr
12
May
12
Jun
12
Jul
12
Aug
12
Sep
12
Oct
12
Nov
12
Dec
12
Jan
13
Feb
13
Mar
13
ASEAN EU US China
Japan NIEs Other Total, y/y
Hong Kong - Product Contributions to Export
Growth (ppt)
-20
-15
-10
-5
0
5
10
15
20
Apr
12
May
12
Jun
12
Jul
12
Aug
12
Sep
12
Oct
12
Nov
12
Dec
12
Jan
13
Feb
13
Mar
13C hemicals Manufactures by Materials
Machinery, Transport Equip Misc Manufactures
Other Total, y/y
Hong Kong - Product Contributions to Import
Growth (ppt)
-25-20
-15-10-50
5101520
2530
Apr
12
May
12
Jun
12
Jul
12
Aug
12
Sep
12
Oct
12
Nov
12
Dec
12
Jan
13
Feb
13
Mar
13
C hemicals Manufactures by Materials
Machinery, Transport Equip Misc Manufactures
Other Total, y/y
Sources: CEIC, ANZ
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ANZ Greater China Economics Weekly Insight / 14 May 2013 / 17 of 23
HONG KONG
PRICES: PRICES DECLINE AFTER CHINESE NEW YEAR
Headline inflation eased to 3.6% y/y in March, from 4.4% in February, as prices retreated after the
Chinese New Year. Food prices eased 1.3ppts to 3.7%, reflecting prices declines after the festivals.Housing costs increased 5.2%, remaining the primary driver of inflation.
Looking ahead, inflationary pressures will remain as the labour market continues to be tight andresidential and commercial rents are still high. Hong Kong is unlikely to see its CPI dropping below 3.0%in 2013. CPI inflation may rise in the second half due to a relatively lower base last year.
Hong Kong - CPI Inflation
0
1
2
3
4
5
6
7
8
9
Sep
10
Dec
10
Mar
11
Jun
11
Sep
11
Dec
11
Mar
12
Jun
12
Sep
12
Dec
12
Mar
13
Headline, y/y Excl. Gov't Relief, y/y
Hong Kong - Contribution to Inflation
-2
-10
1
2
3
4
5
6
May
12
Jun
12
Jul
12
Aug
12
Sep
12
Oct
12
Nov
12
Dec
12
Jan
13
Feb
13
Mar
13
Food Housing
Electricity, Gas & Water Transport
Misc services Others
y/y
Hong Kong - Inflation
(y/y)
-10
-5
0
5
10
15
20
Sep
10
Dec
10
Mar
11
Jun
11
Sep
11
Dec
11
Mar
12
Jun
12
Sep
12
Dec
12
Mar
13
-40
-30
-20
-10
0
10
20
30
Food Housing Transport Elect., Gas & Water (RHS)
Hong Kong - CPI and CNY
0
1
2
3
4
5
6
7
8
9
Sep
10
Dec
10
Mar
11
Jun
11
Sep
11
Dec
11
Mar
12
Jun
12
Sep
12
Dec
12
Mar
13
1.12
1.14
1.16
1.18
1.20
1.22
1.24
1.26
CPI, y/y HKD/CNY (RHS)
Hong Kong - CPI and Liquidity
0
2
4
6
8
10
12
14
16
18
1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013
-8
-4
0
4
8
12
16
3m HIBOR CPI, y/y (RHS)
Hong Kong - CPI and Unemployment Rate
0
1
2
3
4
5
6
78
9
Sep
10
Dec
10
Mar
11
Jun
11
Sep
11
Dec
11
Mar
12
Jun
12
Sep
12
Dec
12
Mar
13
3.0
3.2
3.4
3.6
3.8
4.0
4.2
4.4
CPI, y/y Unemployment Rate, sa (RHS)
Sources: CEIC, ANZ
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ANZ Greater China Economics Weekly Insight / 14 May 2013 / 18 of 23
HONG KONG
MONEY AND BANKING: RMB DEPOSITS CONTINUED TO GROW ON A STRONG RMB
M2 money supply growth edged down to 9.5% y/y in March, from 9.7% in February. On a m/m basis,M2 contracted for the second straight month, by 0.6%.
RMB business continues to be a growth engine for the financial services. Hong Kongs RMB depositsincreased 2.2% to RMB668.1bn. RMB cross-border trade settlement rose to RMB340.8bn, fromRMB221.7bn.
Short term CNH interbank interest rates came off, following a jump on 8 May. The overnight interbankrates quoted by Hong Kongs banks on the TMAs platform jumped to around 4.5% on 8 May, as liquidityconditions tightened. However, the surge was short-lived as interbank rates quickly came down over thefollowing days.
Hong Kong - Money Supply
-5
0
5
10
15
20
Sep
10
Dec
10
Mar
11
Jun
11
Sep
11
Dec
11
Mar
12
Jun
12
Sep
12
Dec
12
Mar
13
M2, y/y M2, m/m
Hong Kong - HKMA Aggregate Balance
(HKD bn)
0
50
100
150
200
250
300
350
May
2009
Nov
2009
May
2010
Nov
2010
May
2011
Nov
2011
May
2012
Nov
2012
May
2013
0
5
10
15
20
25
30
Daily Change (RHS) HKMA Aggregate Balance
Hong Kong - Hang Seng Index and HKD
18,000
19,000
20,000
21,000
22,000
23,000
24,000
May 12 Jul 12 Sep 12 Nov 12 Jan 13 Mar 13 May 13
7.745
7.750
7.755
7.760
7.765
7.770
7.775
Hangseng Index USDHKD (RHS)
Offshore CNH O/N HIBOR
(Fixing of individual banks)
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
Apr
12
May
12
Jun
12
Jul
12
Aug
12
Sep
12
Oct
12
Nov
12
Dec
12
Jan
13
Feb
13
Mar
13
Apr
13
May
13
Hong Kong - RMB Trade Settlement
0
50
100
150
200
250
300
350
400
Sep
10
Nov
10
Jan
11
Mar
11
May
11
Jul
11
Sep
11
Nov
11
Jan
12
Mar
12
May
12
Jul
12
Sep
12
Nov
12
Jan
13
Mar
13
0
20
40
60
80
100
120
140
Ratio to HK-China Trade (RHS)
Ratio to Total HK Trade (RHS)
Ratio to China Total Trade (RHS)Trade settlement amount (3mma), RMBbn
Hong Kong - RMB Deposits and Cross-Border
Trade Settlement
0
100
200
300
400
500
600
700
800
Mar
09
Jul
09
Nov
09
Mar
10
Jul
10
Nov
10
Mar
11
Jul
11
Nov
11
Mar
12
Jul
12
Nov
12
Mar
13
0
2
4
6
8
10
12
Deposit, RMBbn
Trade settlement amount, RMBbnRMB as % of To tal Deposits (RHS)
Sources: CEIC, ANZ
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HONG KONG
REAL ESTATE: PROPERTY PRICES DECLINED FROM THE PEAK
Government tightening measures have started to bite. Property price have begun to pull back as banks
started to raise mortgage interest rates. Centa-City Leading Index declined from its peak on 17 March at123.66, to 118.51 on 5 May.
A gradual reduction in property price should help lower the risk of a real estate collapse as propertyprices should soon return to fair value. In our view, stable residential prices are a pillar supportingprivate consumption as property constitutes a substantial portion of household wealth. Even thoughrising household debt has become an increasing concern, the government needs to proceed with itsproperty tightening policy in an orderly and flexible manner in order to avoid a sharp contraction ofhousehold wealth.
Hong Kong - Centa City Leading Index
0
20
40
60
80
100
120
140
1997 1999 2001 2003 2005 2007 2009 2011 2013
Hong Kong - Residential Property Transactions
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Apr
10
Aug
10
Dec
10
Apr
11
Aug
11
Dec
11
Apr
12
Aug
12
Dec
12
Apr
13
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Number of Transactions (RHS) Value, HKD mn
Hong Kong - Housing Market
140
160
180
200
220
240
260
Oct
10
Jan
11
Apr
11
Jul
11
Oct
11
Jan
12
Apr
12
Jul
12
Oct
12
Jan
13
Apr
13
30
32
34
36
38
40
42
44
46
48
50
Property Price Index (1999=100)
Centaline Affordability Ratio, All Households (RHS)
Hong Kong - Property Price and Unemployment
0
50
100
150
200
250
300
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
0
1
2
3
4
5
6
7
8
9
Property Price Index (1990=100)
Unemployment Rate (Reverse Scale) (RHS)
Hong Kong - Real Property Price Index
Actual vs. Fair Values(Jul 97 = 100, CPI adjusted)
20
30
40
50
60
70
80
90
100
110120
1994 1997 2000 2003 2006 2009 2012
Actual Fair Value
Hong Kong - Consumption and Property Price
(y/y)
-10
-5
0
5
10
15
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
-50
-40
-30
-20
-10
0
10
20
30
40
5060
Private Consumption Residential Property Price (RHS)
Sources: CEIC, ANZ
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CHINA LIQUIDITY REPORT
China - PBoC Open Market Operations Gross
Liquidity Injection (RMB bn)
0
50
100
150
200
250
01 Mar15 Mar 29 Mar12 Apr 26 Apr 10 May24 May 07 Jun 21 Jun
CB Bill Matured Repo Matured Reverse Repo
China - PBoC Weekly Open Market Operations
(RMB bn)
-1,000
-800
-600
-400
-200
0
200
400
600
800
1,000
10
Dec
24
Dec
07
Jan
21
Jan
04
Feb
18
Feb
04
Mar
18
Mar
01
Apr
15
Apr
29
Apr
C B Bill Matured Repo Matured Reverse Repo
CB Bill Repo Rev. Repo Matured
Net
Liquidity Injection
Liquidity Withdrawal
China - 7-day Repo Rate
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
Sep
12
Oct
12
Nov
12
Dec
12
Jan
13
Feb
13
Mar
13
Apr
13
May
13
China - Shanghai Interbank Offered Rate
0
1
2
3
4
5
6
Jul
12
Aug
12
Sep
12
Oct
12
Nov
12
Dec
12
Jan
13
Feb
13
Mar
13
Apr
13
May
13
O/N One W eek Tw o W eek One Month
Sources: CEIC, Bloomberg, ANZ
PBoC Resumed 3-month bill issuance last week
The PBoC resumed the issuance of the 3-month bills for the first time since December 2011, to offset the
capital inflows as the overseas investors pump money into the country to take advantage of the yuans rise.
For the whole week, the central bank injected RMB84bn into the open market. Overall market liquidity
conditions remain plentiful.
April monetary data stronger than expected
China released April monetary data last Friday:
New yuan loans were RMB792.9bn, lower than Marchs RMB1.06trn, but higher than the marketexpected.
The country's social financing, a measure of funds raised by entities in the real economy, amounted to
RMB1.75trn in April, an increase of RMB783.3bn y/y.
By the end of April, the broad measure of money supply (M2), which covers cash in circulation and all
deposits, increased 16.1% y/y to RMB103.3trn, compared with Marchs 15.8%.
Chinas monetary data suggests that credit expansion remains strong, supported by relaxed market liquidity
conditions. The Chinese authorities are likely to continue the accommodative monetary policy in the
foreseeable future.
Li-Gang Liu, Hao Zhou
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FORECASTS
y/y, unless otherwise noted Forecasts
Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 2013
Real GDP
China 9.2 8.9 8.1 7.6 7.4 7.9 7.7 7.8Taiwan 3.53 1.21 0.59 -0.12 0.73 3.72 1.54 3.60
Hong Kong 4.4 3.0 0.7 1.1 1.4 2.5 2.8 2.5
Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13
Consumer Price Index
China 1.9 1.7 2.0 2.5 2.0 3.2 2.1 2.4*
Taiwan 2.96 2.34 1.59 1.60 1.13 2.96 1.37 1.37*
Hong Kong 3.8 3.8 3.8 3.8 3.0 4.4 3.6 3.6*
Producer Price Index
China -3.6 -2.8 -2.2 -1.9 -1.6 -1.6 -1.9 -2.6*
Unemployment Rate, %
Taiwan 4.28 4.28 4.24 4.21 4.20 4.16 4.18 4.19
Hong Kong 3.3 3.4 3.4 3.3 3.4 3.4 3.5 3.5
Exports
China 10.0 11.6 2.9 14.8 25.2 21.8 10.0 14.7*
Taiwan 10.3 -1.9 0.8 8.9 21.6 -15.8 3.3 -1.9*
Hong Kong 15.2 -2.8 10.5 14.4 17.6 -16.9 11.2 10.6
Imports
China 2.3 2.4 0.0 6.0 28.8 -15.2 14.1 16.8*Taiwan 1.2 -1.8 0.1 1.6 22.2 -8.5 0.2 -8.2*
Hong Kong 14.9 3.3 9.0 11.9 23.9 -18.3 11.3 8.2
Trade Balance
China, USD bn 27.7 32.0 19.6 31.6 29.1 15.2 -0.8 18.2*
Taiwan, USD bn 4.09 3.3 3.4 4.1 0.5 0.9 3.2 2.3*
Hong Kong, HKD bn -45.2 -42.7 -44.1 -48.0 -27.5 -34.0 -49.1 -40.1
PMI and Export Orders
China Manufacturing PMI 49.8 50.2 50.6 50.6 50.4 50.1 50.9 50.6*
Taiwan Export Orders 1.91 3.16 11.12 8.51 17.95 -14.47 -6.60 -4.72
Industrial Production
China 9.2 9.6 10.1 10.3 - 9.9 8.9 9.0
Taiwan 2.97 4.83 5.71 2.05 19.05 -11.61 -3.28 5.70
Electricity Production
China 1.5 6.4 7.9 7.6 - 3.4 2.1 -
Retail Sales
China 14.2 14.5 14.9 15.2 - 12.3 12.6 12.8
Taiwan (Commercial Sales) -1.50 -0.68 1.66 1.49 7.80 -6.00 -0.65 3.20
Hong Kong 9.5 3.9 9.5 9.1 10.5 22.7 9.8 14.5
M1 Growth
China 7.3 6.1 5.5 6.5 15.3 9.5 11.9 11.9
Taiwan (M1 B) 3.35 3.6 3.7 4.9 4.0 5.7 6.0 -
Hong Kong 10.3 13.1 15.3 15.9 20.2 13.6 17.6 -
M2 Growth
China 14.8 14.1 13.9 13.8 15.9 15.2 15.7 16.1
Taiwan 3.96 3.3 3.3 3.7 3.0 3.5 3.8 -
Hong Kong 11.0 10.0 11.0 12.1 14.1 8.5 9.2 -
2007 2008 2009 2010 2011 2012 2013
Current Account, % of GDP
China 10.1 9.3 4.9 4.0 1.9 2.3 2.6*
Taiwan 8.9 6.9 11.4 9.3 8.9 10.5 10.8
Hong Kong 13.0 15.0 9.5 6.6 4.8 1.3 2.8
Foreign Reserves, USD bn
China 1,528 1,946 2,399 2,847 3,181 3,312 3,443*
Taiwan 270 292 348 382 386 403 405*
Hong Kong 153 183 256 269 285 317 304*
Government Fiscal Surplus/Deficit, % of GDPChina 0.2 -0.8 -2.8 -2.5 -1.8 -1.5 2.0
Taiwan 0.9 0.9 -2.2 -1.2 -1.1 -2.6 -
Hong Kong (FY ending in March) 3.8 7.3 0.1 1.5 4.1 3.8 -
Forecasts
13 May-13 Jun-13 Sep-13 Dec-13 Mar-14
Foreign Exchange Rate
USD/CNY 6.146 6.20 6.17 6.15 6.13
USD/TWD 29.819 - - - -
USD/HKD 7.761 - - - -
Policy Interest Rate
China PBOC 1-year Lending Rate 6.00 6.00 6.00 6.00 6.25
Taiwan CBC Discount Rate 1.875 1.875 1.875 2.000 2.125
Hong Kong Base Rate 0.50 0.50 0.50 0.50 0.50
Shaded cells and column refer to forecast; *Indicates actual released data or YTD
Sources: CEIC, Bloomberg, ANZ
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