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1.8 MB
Extraction Summary
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People
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Organizations
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Locations
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Quotes
Document Information
Type:
Financial research report / economic analysis
File Size:
1.8 MB
Summary
This document is page 8 of a 'Global Foresight' financial report from the Third Quarter of 2017. It analyzes the Chinese economy, comparing the 'Li Keqiang Index' against reported GDP growth and property prices, noting strong growth in early 2017 driven by infrastructure and property. The document bears a 'HOUSE_OVERSIGHT' Bates stamp, indicating it was part of a document production to the House Oversight Committee, likely related to investigations into financial institutions (such as Deutsche Bank or JPMorgan) that serviced Epstein, though Epstein is not mentioned on this specific page.
People (1)
| Name | Role | Context |
|---|---|---|
| Li Keqiang | Namesake of Economic Index |
Mentioned in the context of the 'Li Keqiang Index' used to measure Chinese economic performance.
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Organizations (2)
| Name | Type | Context |
|---|---|---|
| Bloomberg |
Source of data for Charts 2 and 3.
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| House Oversight Committee |
Implied by the Bates stamp 'HOUSE_OVERSIGHT_012086'.
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Timeline (1 events)
Locations (4)
| Location | Context |
|---|---|
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Primary subject of the economic analysis.
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Mentioned regarding import statistics ($58 billion import source).
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Mentioned regarding import statistics ($58 billion import source).
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Mentioned in context of U.S. dollar terms for import calculations.
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Key Quotes (3)
"We believe China’s strong reflation... may have been the most impactful yet under-appreciated catalyst that fueled the synchronized global economic recovery since the summer of 2016."Source
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Quote #1
"The good news is that China’s growth is likely to remain healthy for the remainder of 2017, as stability is paramount ahead of the quinquennial power transition this autumn."Source
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Quote #2
"However, with stability being of utmost importance, policymakers could not afford to take a chance with the market’s invisible hand."Source
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Quote #3
Full Extracted Text
Complete text extracted from the document (2,853 characters)
CHART 2: THE LI KEQIANG INDEX VERSUS CHINESE REAL GDP GROWTH
[Chart showing percentage fluctuations from 2006 to 2017]
Li Keqiang Index (Left Hand Side)
Chinese Real GDP Year-over-Year (Right Hand Side)
Source: Bloomberg
Chinese Real GDP Year-over-Year (Right Hand Side)
Source: Bloomberg
Furthermore, CHART 3 shows that, directionally, the Li Keqiang Index maps pretty well to the ebb and flow of Chinese property prices, confirming the thesis that property prices have much impact on the Chinese economy.
A close examination of CHART 2 raises an interesting observation: Lately, the Li Keqiang Index has accelerated much more than the reported GDP growth. One could surmise that China’s actual GDP growth (measured on a year-over-year basis rather than on an annualized sequential change) may have been greater than the reported 6.9% in the first quarter of 2017. This could be rationalized by the conjecture that the actual growth in early 2016 may have been lower than the reported 6.7%.
One indicator of China’s strong growth is the year-over-year changes in its imports as shown in CHART 4. Imports surged 24% year-over-year in U.S. dollar terms, and 31% in renminbi terms during the first quarter of 2017. To be fair, part of the surge was due to the rebound in commodity prices. However, China’s $58 billion import from Germany and Japan, two non-commodity countries, was still up an impressive 17% year-on-year. In the first quarter of 2016, China’s imports from those two countries had declined 10%.
We believe China’s strong reflation, thanks to the infrastructure buildout and the unprecedented property price increases in major cities, may have been the most impactful yet under-appreciated catalyst that fueled the synchronized global economic recovery since the summer of 2016. The good news is that China’s growth is likely to remain healthy for the remainder of 2017, as stability is paramount ahead of the quinquennial power transition this autumn. However, the uncertainty starts to rise as we look beyond 2017.
Shadow Boxing
Over the past few years, China watchers have been urging Chinese policymakers to introduce bold reforms and market forces to tackle the country’s rapidly growing leverage, over capacity, and housing bubble. However, with stability being of utmost importance, policymakers could not afford to take a chance with the market’s invisible hand. Tough reforms in the context of slowing economic growth also ran the risk of jeopardizing social stability. Now, however, with the economy on a much stronger footing, Chinese policymakers have started to push through some needed reforms.
CHART 3: LI KEQIANG INDEX VERSUS YEAR-OVER-YEAR PRICE CHANGE IN CHINESE PROPERTIES
[Chart showing percentage fluctuations from 2005 to 2017]
Li Keqiang Index
Year-over-Year Price Change in Chinese Properties
Source: Bloomberg
Year-over-Year Price Change in Chinese Properties
Source: Bloomberg
8 GLOBAL FORESIGHT THIRD QUARTER 2017
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