What a year. We’ve only just settled back in after the New Year holiday, and Spring Festival is almost upon us. Chinese Christmas usually seems to continue well into April; this year, however, Shanghai’s stores and office buildings have had to move fast to erect January’s gaudy golden dragons in place of those gaudy blue-eyed Santas (a scary sight for those who are following “Game of Thrones” – “Winter is coming”).
When it comes to the economy, a chill is definitely setting in. The December PMI provided a rare bit of good news, but analysts cautioned that such a small rebound should not be overestimated. Beijing began girding the country’s economic loins by pumping some liquidity back into the economy – growth in both bank loans and M2 exceeded analyst expectations in December. Policymakers also started to rapidly expand the QFII program to combat the net capital outflows recorded in October and November.
In the weeks ahead, Chinese New Year will help to keep spending and prices high. Everyone is fairly distracted at the moment with the holiday hullabaloo, stockpiling fireworks, buying obscure medicines on Taobao and, of course, obtaining rail tickets for the world’s largest annual migration. But beginning with the post-holiday lull in February, we could start to see some darker economic data. Let’s hope that those guardians of the realm in Beijing are up to the task.