From "Liquidity Boom Brings Signs of Stabilization: Anecdotes from China" by Jing Ulrich, J.P. Morgan chairman of China Equities, March 17:
Supportive measures towards the housing market, combined with aggressive interest rate cuts and accelerated price reductions have resulted in a sharp transaction rebound in the mass-market segment. Property sales in seven major cities recorded 29% y-o-y growth in the first two months of 2009 … Home prices have now declined by 20-30% as developers show greater willingness to accommodate buyers. Some developers have seen a particularly strong surge in sales – Guangzhou R&F generated RMB3.6 billion (US$526.7 million) in contract sales in Jan-Feb, up 36% y-o-y, and has achieved sales of RMB1.4 billion (US$204.8 million) in the first-half of March, reaching 22% of its full-year target. This is notable as January and February are traditionally considered a slow season for property sales … Shenzhen and Guangzhou were among the first to decline and now appear to be bottoming out.
From "Macro China: FX Reserves Decline – Explanations and Implications" by Johanna Chua and Ken Peng, Citigroup Global Markets, March 18:
We think the outlook for China’s FX reserves remain negative, and may decline further in February. Even before January’s possible FX reserve decline, FX reserve accumulation was already short of net trade and FDI inflows. In September to December 2008, the trade surplus ran at an average of US$36 billion a month, while monthly net FDI inflows were about US$6 billion, but monthly FX reserve accumulation was a paltry US$15.5 billion, creating an average gap of US$26.6 billion a month. Both asset revaluation and capital outflows likely were responsible … China’s February trade surplus posted a bigger-than-expected decline to US$4.8 billion … FDI inflows have also fallen, while outflows are poised to rise with [the] increasing pipeline of cross-border acquisition … Thus, we expect China’s FX reserves would be hard pressed to continue their sizeable accumulation in the near term.
From "China: Industrial Production" by Sherman Chan, Moody’s Economy.com economist, March 11:
The slowdown in industrial production during January and February was in line with expectations … Exports are unlikely to pick up any time soon, as there are no clear signs as to when China’s major markets – the US and Europe – will be able to escape from the current recession … Support for local producers will mainly come from the domestic market … Strong central government spending will provide great support to the industrial sector for now when external demand has evaporated, [but] not all industrial sub-sectors will benefit from the increased government efforts … It is almost certain that manufacturers of consumer goods will fail to recover this year, as their key focus is the overseas markets. Domestic consumption is still relatively modest, and will not be sufficient to offset the decline in external orders even with increased assistance by the government.