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China has become the world’s second largest economy, its biggest exporter of manufactured goods, and an immense consumer of commodities. Although the country is an industrial and exporting giant, its growth since the 2008 financial crisis has been driven largely by investment in infrastructure and real estate. Efforts to increase the share of consumption in the economy have foundered amid persistently high inequality and a threadbare safety net that forces high levels of precautionary savings. Amid limited options, residential real estate remains the dominant vehicle for investment. This in turn means that government efforts to force a gradual deleveraging on a country with high (and rising) debt levels have proceeded in fits and starts. Despite these financial vulnerabilities, China retains a strong capacity for industrial and technological advances.
Gross Domestic Product, Chained 2012 Dollars, Change, %, SA, Released Monthly
Real Gross Domestic Product measures the change in the inflation-adjusted value of all goods and services produced in the economy. It comprises private consumption and investment, inventory buildup, government spending and net exports. Markets watch this indicator to gauge the strength and composition of growth.
Survey Unemployment Rate in Urban Areas, All Persons, %, SA, Updates Monthly
The Unemployment Rate measures the percentage of the labor force currently not working but actively seeking employment. Markets monitor the unemployment rate to assess the cyclical health of the economy and the likelihood that wage demands may increase inflationary pressures.
The Consumer Price Index is a measure of the change over time in the average prices paid by urban and rural consumers for a market basket of goods and services. As the most widely used measure of inflation, changes in the index are closely followed by policymakers, financial markets, businesses, and consumers.
Merchandise Trade Balance, Balance of Payments Basis, Billions USD, SA, Updates Monthly
The Trade Balance measures the difference in value between imported and exported goods and services over the reported period. A positive number indicates that more goods and services were exported than imported – generating a trade surplus – and a negative number indicates a deficit. Trade imbalances may reflect fleeting differences in growth rates or more permanent factors in the composition of growth or the endowment and price of natural resources.
Current Account Balance, % of Gross Domestic Product, Updates Quarterly
The Current Account is a record of a country’s transactions with the rest of the world. It measures the difference between the inflows of funds to a country from goods and services exported, income on holdings of foreign assets, remittances and grants received versus the outflow of funds from the same activities. A positive current account balance indicates that the country is a net lender to the rest of the world, while a negative current account balance indicates that it is a net borrower.
Loan Prime Rate, %
The Loan Prime Rate is the lending rate provided by Chinese commercial banks to their most creditworthy customers, and serves as the benchmark for most other loans. Although the Loan Prime Rate is derived from quotes submitted by a group of designated banks, it is believed the People’s Bank of China directly guides the process to achieve desired monetary policy outcomes.
Money Supply Growth
M2 Money Supply, Annual Change, %, SA, Updates Monthly
M2 Money Supply is a measure of currency that includes cash, checking deposits, and non-cash assets that can easily be converted into cash. Markets don’t typically respond directly to changes in M2, but growth in the money supply can influence inflation, interest rates, and exchange rates over longer time horizons.
Credit to General Government, Non-Financial Corporate (Market Value), and Household Sectors, % of Gross Domestic Product, Government at Nominal, Others at Market Value, Updates Quarterly
Aggregate Debt Ratios measure the total borrowing of the general government, non-financial corporate, and household sectors, expressed as a share of gross domestic product. Total debt is followed by investors as a gauge of the vulnerability of an economy to financial shocks. An overly fast pace of debt growth is also frequently associated with a buildup of unproductive investment and excessively high asset valuations.
Net International Investment Position
Credit to General Government, Non-Financial Corporate, and Household Sectors, % of Gross Domestic Product at Market Value, Updates Annually
The Net International Investment Position is the difference between the external financial assets and liabilities of a nation. A nation with a positive position is a creditor nation and is generally considered a safe haven in financial markets. A nation with a negative position is a debtor nation, with deeper balance of payments vulnerabilities.
Official Reserve Assets, Foreign Currency Reserves (in Convertible Foreign Currencies), Billions USD, Updates Monthly
Currency Reserves show external holdings that are freely usable for settlement of international transactions, and are readily available to and controlled by monetary authorities for meeting balance of payments financing needs, for intervention in currency markets to affect exchange rates, and for other related purposes. Developed markets with widely used, freely tradeable international currencies typically provide reserve assets rather than engaging in reserve accumulation.