China

Trusted Sources provides in-depth China analysis – from Politburo policy-making through the macro-economy to key sectors such as property, banks and consumption. This independent, in-country investment research is unique in combining political, economic, social and external factors to provide a comprehensive picture that goes far beyond short-term data. It offers a road map to understanding internal developments, such as how the slowdown in the economy is being managed, and China's global impact through transition mechanisms such as the commodities markets. Trusted Sources’ team of analysts, based in Beijing, provides weekly thematic and drill-down coverage.

The ruling Communist Party and the government are committed to major economic reforms. But this comes with two major problems. The first is the way in which reform slows growth in the short-term, a big issue for a regime that sees economic expansion as its key to legitimacy. The second is what the leaders understand by reform; this is very different from how markets see it. For the Xi Jinping administration, the aim is to use carefully controlled change to strengthen the Communist Party state. Political Factors dominate. Rather than privatisation and the opening up of monopoly sectors, the core policy is to make state-owned enterprises (SOEs) more efficient and create "national champions" while tightening Party control.

This leads to the fundamental question that will determine China's evolution - how the liberalization and restructuring of reform needed to re-shape the economy can be combined with monopolistic top-down political control. If political preservation prevents needed reform, China risks heading to the "middle development trap".

The model of cheap labour and capital supplying the strong export markets has run its course. Although the Trusted Sources China team does not expect a hard landing, we have forecast falling growth since 2014. China wants to move up the value chain, but the leadership feels it has to guarantee employment and defend existing industries - creating substantial excess capacity. The financial system is undergoing important reforms, with liberalisation of interest rates. But the mishandling of the stock market and FX fixing raises questions about the competence of the policy process and the politicisation of economic decision-making.

We also cover the multiple challenges of corruption, air, water and soil pollution, food safety, social evolution, an ageing population, regional unrest in Tibet and Xinjiang, autonomist pressures in Taiwan and Hong Kong's pro-democracy movement. We regularly analyse China's external policies, particularly East Asian tensions, relations with the US, the crisis over North Korea, and the "One Belt, One Road" programme.

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* China: Caution prevails in Beijing, Bo Zhuang, Michelle Lam, Trey McArver, 9 Mar 2017
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* China: Benign outlook hinges on Fed moves, Bo Zhuang, Jonathan Fenby, 8 Mar 2017
China Global