From "Follow the money" by Andy Rothman, CLSA Asia-Pacific Markets China Macro Strategist, January 14:
One additional positive data point is the first m-o-m increase in electricity generation since last July … Given the steep declines in consumption (or generation) growth over the last four months, it is good to see that the seasonal trend wasn’t bucked by a collapse in industrial power demand. We remain cautious, however, that we will not see sustainable signs of life in the mainland economy until March or April. That is when we expect orders from the new infrastructure program to arrive at China’s steel and cement producers … We should see the first m-o-m increase in steel production since July 2008 [and] steady m-o-m increases in cement production. And, since cement and metals account for about 25% of power consumption, in March or April we should see the first sustainable m-o-m increases in power generation (or consumption).
From "China data outlook" by Grace Ng and Qian Wang, J.P. Morgan economists, January 6:
Private sector activity might contribute only about 3 percentage points to China’s 2009 GDP growth, while the aggregate impact of the government’s stimulus program will likely account for an additional 5% growth … There is concern that a sharp fall in fixed investment could push China’s 2009 growth significantly below 8% … We assume that private fixed investment, which accounts for two-thirds of total FAI, will essentially stall … Fixed investment growth in private real estate, industrial metals and commodities, auto, textile-related industries, machinery and electronic products, [is] likely to slow sharply or even contract in 2009 … However, we expect offsetting expansion in fixed investment in sectors including transport infrastructure (forecast to rise at 70% y-o-y), power grid system (up 25.0%), economic housing, environment management (up 35%), healthcare and social securities (up 25%) … Total fixed investment is still likely to rise moderately at 16.0% y-o-y.
From "China’s FDI Inflows Moderate" by Sherman Chan, Moody’s Economy.com economist, January 15:
External weakness has been a major threat to China’s economy … The total inflow of US$6 billion recorded in December was 5.7% lower on a year-ago basis. Despite booking a record-high annual FDI figure of US$92.4 billion, the increase of 23.6% represents the slowest pace – on a year-to-date basis – for the whole of 2008 … The marked slowdown is due to a number of reasons. The credit squeeze has prompted firms to maintain liquidity, which … weighs on investment activity especially for fixed assets. Furthermore, the end of the property boom in China coupled with the halt of the yuan’s appreciation have likely depressed appetite for assets … Meanwhile, as economic conditions across Asia have deteriorated … rising risk aversion will see investors sit tight until signs of a recovery emerge.