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China

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Geopolitics In Q3 2024

Investors should overweight US assets and de-risk their portfolios in anticipation of a major increase in policy uncertainty and geopolitical risk surrounding the US election and its global ramifications.

Geopolitical Strategy by Matt Gertken
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It’s Bear-zin Now: A Q&A

Don't buy the dip. The equity bull market is over. The US will enter a recession in late 2024 or in early 2025.

Global Investment Strategy by Peter Berezin
China's Q2 Economic Growth Disappoints
China's real GDP growth decelerated to 4.7% y/y in Q2, down from 5.3% in Q1 and below the consensus forecast of 5.1%. Domestic demand weakened, with retail sales growth sliding to 2% y/y in June, down from 3.7% in the previous month. Our China Strategists…
Daily Insights
China's Credit Slump Looms As Third Plenum Approaches
Subdued demand for credit among Chinese private-sector businesses and households persisted through June. The stock of outstanding bank loans grew by 8.3% year-on-year, marking the slowest pace since records began in 2003. Additionally, bond issuance from…
Daily Insights
China Faces Daunting Challenges
As highlighted in Wednesday’s edition of BCA Live & Unfiltered, the Chinese economy and its financial markets face several daunting challenges. Its demographic outlook is unfavorable, with a low birthrate stifling population growth; the grim math of…
Daily Insights
The PBoC Will Resist a Swift RMB Devaluation
The Chinese currency has been under considerable depreciation pressure due to capital outflows. Additionally, the economy is grappling with debt deflation and a balance sheet recession, conditions that typically call for lower interest rates and a weaker…
Daily Insights
Two Key Risks To Our Recession View
We expect continued softening in the US economy will lead to decelerating wage growth, muffling the principal consumption driver. Because the US has been the foremost catalyst for global growth in this cycle, a US recession will eventually morph into a global…
Daily Insights
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Will China Devalue The Yuan Significantly?

Is the RMB cheap or expensive? Based on trade accounts, the yuan is inexpensive, but the RMB is vulnerable due to capital outflows. Yet, Beijing will not resort to a rapid devaluation for now, and the option of floating the currency is improbable. The PBoC will allow a gradual depreciation of the yuan versus the dollar, say around 5%, in the next six months.

Emerging Markets Strategy by Arthur Budaghyan
Are Chinese Bond Markets Due For A Reversal?
According to BCA Research’s China Investment Strategy service, onshore bonds are vulnerable to an investor sentiment reversal. Chinese 10-year government bond yields will likely trend lower to below 2% over the next 12 months. Investors have been piling…
Daily Insights
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China’s Bond Market Rally: A Tipping Point?

The PBoC appears increasingly uncomfortable with the rapid decline in the Chinese government bond yields. While the PBoC will succeed in temporarily curbing investors’ enthusiasm for bonds, the central bank will be unwilling to raise interest rates and unable to intervene in the bond market in any meaningful and lasting way.

China Investment Strategy by Jing Sima

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