Unveiling China’s Economic Cycle

Also Interesting

• We see government bonds retaining their crucial role as portfolio ballast, even after their yields have plunged
• Toward Dynamic Stress Tests
• Fixed Income Monthly – June 2021

Introducing our Economic Cycle Indicator and how we apply it to the current environment

The recent deterioration in high-frequency data has reignited concern about the health of the Chinese economy. However, wide divergences between some official data, such as GDP, and well-followed indicators, such as Purchasing Managers Indices (PMIs), have led to confusion about the severity of the slowdown. Given the rising economic significance of China, gaining an accurate understanding of where we are in the cycle and how it may evolve going forward is important for not only local investors, but also China’s trading partners and global investors, who are increasingly exposed to the Chinese market1