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Outlook 2024: The Year Of The Dragon #1

• In the Year of the Dragon, China faces a challenging time economically as, in a “complex” domestic and international environment, the CCP is focused increasingly on security and related self-reliance even at the expense of economic growth.

By Alastair Newton

China M2 Money Supply 10.0% y-o-y (consensus 10.1%) in Nov-23

- China's M2 Money Supply in November 2023 grew by 10.0% year-on-year, falling slightly below the consensus forecast of 10.1% and marking the lowest growth rate since March 2022.
- Loans provided by financial institutions also slowed in November 2023, reaching 10.8% year-on-year.

China CPI -0.5% y-o-y (consensus -0.1%) in Nov-23

- China's Consumer Price Index (CPI) declined by -0.5% y-o-y in November 2023, lower than the consensus estimate of -0.1%, stretching deflationary pressures in the economy.
- The CPI now stands 0.92 pp below the one-year average and 1.58 pp below the long-run average, indicating a sustained period of disinflation or deflationary trends with potential implications for economic growth and inflation expectations.

Good COP, Bad COP

• Despite some positive signs from both China and the US, the world’s two biggest emitters, and determined conference chairing by the UAE, expectations for COP28 are rightly low, with the onus to do better resting primarily on the financially stretched and distracted developed world.

By Alastair Newton