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A Thread on #China. Some data and some thoughts. I hope you find it useful.
What's different about China's GDP number?
Is China growing at 6% as it lets everyone else believe?
Can China come out of this without devaluing its currency?
What's different about China's GDP number?
Is China growing at 6% as it lets everyone else believe?
Can China come out of this without devaluing its currency?
1/ #China’s GDP is an input number and not an output figure like in western economies. National accounts are based on data collected by local governments which are rewarded for meeting growth targets; hence, they have an incentive to skew the data they provide to the Central Gov.
2/ Looking at different data sets one will see that #China is merely growing. PMI sentiment is falling fast; a number below 50 denotes a contraction and not an expansion as the GDP growth rate suggests. Manufacturing (49.8) & New Export Orders (48.2) have already fallen below 50. 
1) Is China’s currency undervalued like the everyone seems to believe or overvalued?
Are #China’s FX reserves sufficient to prevent a further devaluation of the #Yuan (#RMB)?
Are #China’s FX reserves what they appear to be?
Are #China’s FX reserves sufficient to prevent a further devaluation of the #Yuan (#RMB)?
Are #China’s FX reserves what they appear to be?
2) Why would China need to clamp down capital flight if the #Yuan is undervalued and/or FX reserves are more than enough, as China claims?
#China clamps down on capital flight risk as #yuan weakens asia.nikkei.com/Business/Marke…
#China clamps down on capital flight risk as #yuan weakens asia.nikkei.com/Business/Marke…
3) Stricter bank oversight while real estate developers will have restricted access to foreign currency bonds. If the fin system is judged to be on the brink of instability SAFE will declare the situation "abnormal" & banks will be evaluated on the #Yuan amounts wired offshore.
