ANZ Greater China Economic Insight Incl Regional Chartbook - 14 May 2013

7/30/2019 ANZ Greater China Economic Insight Incl Regional Chartbook - 14 May 2013

1/23

GREATER CHINA ECONOMICS

ANZ RESEARCH

WEEKLY INSIGHT

14 MAY 2013

INSIDE

Data Preview and Review 2

Greater China Chartbook 3

China 4Taiwan 11

Hong Kong 15

China Liquidity Report 20

Forecasts 21

Important Notice 22

CONTRIBUTORS

Li-Gang Liu

Chief Economist, Greater [email protected]

Raymond YeungSenior Economist, Greater China

[email protected]

Hao Zhou

China [email protected]

Louis LamEconomist, Greater China

[email protected]

[email protected]

GREATER CHINA ECONOMICS CHARTBOOK

China: Aprils activity data indicates that growth momentum remains sluggish.

As the risk of inflation diminishes on the near-term horizon, we believe the

monetary policy stance has turned more supportive to growth. As central

banks in the region cut interest rates and used intervention to ease the

pressures of currency appreciation, we see an increasing likelihood for the

PBoC to cut the policy rate by 25bps. This will reduce the incentive for capital

inflows which may actually risk overheating the property sector. After all, real

estate prices are determined by the supply-demand conditions and the sector

is still subject to other property tightening measures.

However, monetary policy alone will have limited impact on the economicrebalancing. To some extent, an overly supportive credit policy is likely to

worsen Chinas overcapacity problems. We thus argue that China should

accelerate the structural reforms to sustain economic growth, such as reducing

tax burdens on the services sector, deregulation and encouraging competition,

interest rate liberalization, and deepening capital market developments to

regain growth impetus.

Taiwan: The economy contracted in Q1 on weak demand from major markets

including China, the US and the EU. However, investment rose strongly as the

global electronic cycle continued to support Taiwans electronic producers.

However, the weak yen has started to dampen export orders on valuation

effects when expressed in USD terms.

Hong Kong: GDP flattened in Q1, in line with the downside surprise we saw

for China and Taiwan. Private consumption held up and was the biggest

contributor to helping the citys state maintain positive growth. However,

attention should be paid to any sharp correction of property prices as it forms

a large part of household wealth.

CHINA MARKET LIQUIDITY REPORT

The PBoC resumed the issuance of the 3-month bills for the first time since

December 2011, to offset capital inflows as overseas investors pump money

into the country to take advantage of the yuans rise.

CHART OF THE WEEK

Chinas strong credit extension failed to translate into activity growth

China - Total Social Financing

(RMB bn)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

TotalSocial

Financing

RMBLo

an

Foreign

Currency

Loan

Entrusted

Loan

TrustLo

an

Banker

's

Acceptan

ce

Draft

NetCorp

Bon

d

Non

-

Finan

cial

Equity

Jan-Apr 2012 Jan-Apr 2013

Sources: CEIC, ANZ


2/23

ANZ Greater China Economics Weekly Insight / 14 May 2013 / 2 of 23

DATA PREVIEW & REVIEW

GREATER CHINA ECONOMIC DATA CALENDAR

DATE COUNTRY DATA/EVENT PERIOD CONSENSUS LASTTIME

(HK/SG)14-18 May China Actual FDI (y/y) Apr 6.20% -- -

18 May China Property Prices Apr -- -- 9:30

20 May Taiwan Export Orders (y/y) Apr -- -6.60% 16:00

20 May Taiwan Current Account Balance (USD) Q1 -- 15.96Bn 16:20

20 May Hong Kong Unemployment Rate sa Apr -- 3.50% 16:30

21 May Hong Kong CPI - Composite Index (y/y) Apr -- 3.60% 16:30

Source: Bloomberg

WEEK IN REVIEW

DATE COUNTRY DATA/EVENT PERIOD CONSENSUS ACTUAL LAST

07 May Taiwan Trade Balance (USD) Apr 1.57bn 2.27bn 3.20bn

07 May Taiwan Exports (y/y) Apr 3.10% -1.90% 3.30%

07 May Taiwan Imports (y/y) Apr 0.30% -8.20% 0.20%

07 May Hong Kong Foreign Reserves (USD) Apr -- 306.5bn 303.8bn

08 May China Trade Balance (USD) Apr 16.15bn 18.16bn -0.88bn

08 May China Exports (y/y) Apr 9.20% 14.70% 10.00%

08 May China Imports (y/y) Apr 13.00% 16.80% 14.10%

09 May China CPI (y/y) Apr 2.30% 2.40% 2.10%

09 May China Producer Price Index (y/y) Apr -2.30% -2.60% -1.90%

10 May China New Yuan Loans (RMB) Apr 755.0bn 792.9bn 1060.0bn

10 May China Money Supply - M0 (y/y) Apr 12.00% 10.80% 12.40%



10 May China Total Social Financing (RMB) Apr 1.5trn 1.75trn 2.54trn

10 May Hong Kong GDP sa (q/q) Q1 0.50% 0.20% 1.20%

10 May Hong Kong GDP (y/y) Q1 2.70% 2.80% 2.50%

13 May China Industrial Production YTD (y/y) Apr 9.50% 9.40% 9.50%

13 May China Industrial Production (y/y) Apr 9.40% 9.30% 8.90%

13 May China Fixed Assets Investment YTD (y/y) Apr 21.00% 20.60% 20.90%

13 May China Retail Sales YTD (y/y) Apr 12.60% 12.50% 12.40%

13 May China Retail Sales (y/y) Apr 12.80% 12.80% 12.60%

Source: Bloomberg


3/23


GREATER CHINA CHARTBOOK

OVERVIEW: STRONG CREDIT EXTENSION FAILED TO TRANSLATE INTO ACTIVITY GROWTH

China: While Chinas activity data improved somewhat in April, growth momentum remains sluggish. The

improvement in the headline industrial growth figures is largely due to a low base effect of last year.

Trade growth remained strong in April, following a surge in the past two quarters. However, we doubt thestrong external performance. The trade data defies the weak trade data reported in other regionaleconomies. Our previous study (ANZ Greater China Insight, 7 May 2013) indicates thatexporters/importers may use cross-border trade for financial gains.

CPI inflation rebounded modestly to 2.4% y/y in April, from Marchs 2.1%, slightly higher than marketexpectations (2.3%). However, PPI declined by 2.6% y/y in April, compared with -1.9% in March,reflecting the recent pullback in raw material prices.

Credit and money supply grew strongly in April, suggesting that domestic monetary conditions have beensubject to strong pressure from capital inflows.

We believe that the mild inflation outlook, together with sluggish domestic demand, has set the rightconditions for a rate cut. The RMB is under significant appreciation pressure owing to the widening interest

rate differentials between RMB and other key currencies in the world, especially after the recent ECB, RBAand BoK's rate cuts. Lowering the interest rate differentials will help dampen the capital inflows, whilefalling inflation will offset the risk of negative carry in deposit rates. Meanwhile, the PBoC could allow banksto raise their deposit rates to up to 1.2 times the policy rate. This policy will not only push forward interestrate liberalisation but also reduce the possibility of a negative real interest rate.

Taiwan: Q1 GDP contracted 0.81% saqr, as global economic recovery failed to gain traction. Weakexternal demand dragged on the economy, reflecting the slowdown in Mainland China and the EU. Webelieve momentum will pick up mildly in Q2 and accelerate through the rest of the year, in conjunctionwith the pick up in China and the US. Domestically, investment should continue to be the main driver, asinvestment from electronic producers remains upbeat.

Hong Kong: Hong Kongs headline GDP grew 2.8% y/y in Q1. Sequentially, the economy barely expandedwith a 0.2% q/q sa gain. This is in line with the downside surprise we saw for China and Taiwan. Privateconsumption held up and was the biggest contributor to helping the citys state maintain positive growth.

China - Domestic Demand Indicators

(y/y)

5

7

9

11

13

15

17

Oct

10

Jan

11

Apr

11

Jul

11

Oct

11

Jan

12

Apr

12

Jul

12

Oct

12

Jan

13

Apr

13

Industrial Production, y/y Real Retail Sales, y/y

China - Inflation

(y/y)

-6

-4

-2

0

2

4

6

8

10

Oct

10

Jan

11

Apr

11

Jul

11

Oct

11

Jan

12

Apr

12

Jul

12

Oct

12

Jan

13

Apr

13

CPI PPI

Taiwan - Contributions to GDP Growth

(ppt)

-6

-4

-20

2

4

6

810

12

14

Jun

10

Sep

10

Dec

10

Mar

11

Jun

11

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13

Private Consumption Government Consumption

Investment Change in Stocks

Net Exports y/y

Hong Kong - Contributions to GDP Growth

(ppt)

-10

-5

0

5

10

15

Sep

10

Dec

10

Mar

11

Jun

11

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13Private Consumption Government Consumption

Investment Changes in Inventories

Net Exports Total, y/y

Sources: Bloomberg, CEIC, ANZ
https://anzlive.secure.force.com/servlet/servlet.FileDownload?file=00PD000000HV4kmMADhttps://anzlive.secure.force.com/servlet/servlet.FileDownload?file=00PD000000HV4kmMAD


4/23


CHINA

REAL ACTIVITY: THE ACTIVITY DATA IMPROVED MODESTLY ON BASE EFFECTS

Industrial production growth rebounded to 9.3% y/y in April, but was weaker than expected, compared

with Marchs 8.9%. Meanwhile, electricity production rose 6.2% y/y, up from 2.1% in the previousmonth.

Fixed asset investment decelerated to 20.6% y/y in January-April, below consensus forecasts, versus20.9% in January-March, indicating that Chinas fiscal spending could have slowed in the month.

Retail sales grew in line with market expectations, gaining 12.8% y/y in April, 0.2ppt higher thanMarch.

On a m/m basis, while industrial production picked up modestly in the month, retail sales and fixedasset investment slowed in April.

The official Purchasing Managers Index eased again to 50.6 in April, suggesting that Chinas economicrecovery remains tepid.

China - GDP Growth

0

2

4

6

8

10

12

14

16

18

20

2005 2006 2007 2008 2009 2010 2011 2012 2013

y/y q/q, saar

China - Contribution to GDP Growth

-5

0

5

10

15

20

02 03 04 05 06 07 08 09 10 11 12 13Q1

Consumption Investment Ne t Exports GDP, y/y

China - Electricity Production and Industrial

Production (y/y)

-5

0

5

10

15

20

25

Apr

10

Jul

10

Oct

10

Jan

11

Apr

11

Jul

11

Oct

11

Jan

12

Apr

12

Jul

12

Oct

12

Jan

13

Apr

13

5

7

9

11

13

15

17

19

Electricity Production Industrial Production (RHS)

China - Fixed Asset Investment

(ytd, y/y)

18

19

20

21

22

23

24

25

26

27

28

Oct

10

Jan

11

Apr

11

Jul

11

Oct

11

Jan

12

Apr

12

Jul

12

Oct

12

Jan

13

Apr

13

China - Retail Sales

(y/y)

10

15

20

25

Oct

10

Jan

11

Apr

11

Jul

11

Oct

11

Jan

12

Apr

12

Jul

12

Oct

12

Jan

13

Apr

13

China - Official Manufacturing PMI

45

47

49

51

53

55

57

59

61

Apr

10

Jul

10

Oct

10

Jan

11

Apr

11

Jul

11

Oct

11

Jan

12

Apr

12

Jul

12

Oct

12

Jan

13

Apr

13

Headline New Orders New Export Orders

Sources: NBS, CEIC, ANZ


5/23


CHINA

EXTERNAL TRADE: TRADE REMAINED STRONG ON HOT MONEY INFLOWS

Trade growth remained strong in April, following a surge in the past two quarters. Export growth

increased 14.7% y/y in April, compared with market expectations of a 9.2% gain and Marchs10.0%. Imports grew 16.8% y/y in April, following a 14.1% gain in the previous month, and higherthan consensus of a 13.0% gain. China registered a trade surplus of USD18.2bn, compared with adeficit of USD0.88bn in March.

Our previous study (ANZ Greater China Insight, 7 May 2013) found that much of the strong growthperformance was due to the sharp increase in Shenzhen-Hong Kong cross border trade. Meanwhile, theport throughput data remained soft for the past few months, suggesting that the real demand has notyet recovered. The inconsistency between port throughput and the headline trade growth shows thatmany Chinese exporters could have over-invoiced their trade value to take advantage of the interestrate differentials between onshore and offshore markets, and the RMBs steady appreciation since Julylast year.

China - Trade Developments

-40

-30

-20

-10

0

10

20

30

40

50

Oct

10

Jan

11

Apr

11

Jul

11

Oct

11

Jan

12

Apr

12

Jul

12

Oct

12

Jan

13

Apr

13

-40

-30

-20

-10

0

10

20

30

40

50

Trade Balance, $bn (RHS) Exports, y/y Imports, y/y

China's exports vs regional exports

(y/y, 3mma)

-10

-5

0

5

10

15

20

25

30

35

Oct

10

Jan

11

Apr

11

Jul

11

Oct

11

Jan

12

Apr

12

Jul

12

Oct

12

Jan

13

Apr

13

China Hong Kong Korea Taiw an

China - Exports by Destination(y/y, 3mma)

-20

-10

0

10

20

30

40

50

60

Oct

10

Jan

11

Apr

11

Jul

11

Oct

11

Jan

12

Apr

12

Jul

12

Oct

12

Jan

13

Apr

13

US EU NIE ASEAN

China - Imports by Origin(y/y, 3mma)

-10

0

10

20

30

40

50

Oct

10

Jan

11

Apr

11

Jul

11

Oct

11

Jan

12

Apr

12

Jul

12

Oct

12

Jan

13

Apr

13

US EU NIE ASEAN

China - Trade Balance

($bn 12m rolling sum)

100

120

140

160

180

200

220

240

Oct

10

Jan

11

Apr

11

Jul

11

Oct

11

Jan

12

Apr

12

Jul

12

Oct

12

Jan

13

Apr

13

-70

-60

-50

-40

-30

-20

-10

0

EU US Japan (RHS)

China - Trade Balance

($bn 12m rolling sum)

-200

-180

-160

-140

-120

-100

-80

-60

-40

-20

0

Oct

10

Jan

11

Apr

11

Jul

11

Oct

11

Jan

12

Apr

12

Jul

12

Oct

12

Jan

13

Apr

13

ASEAN-5 AU+NZ NIE ex HK



6/23


7/23


CHINA

MONETARY POLICY: MILD INFLATION AND SLUGGISH GROWTH PAVES WAY FOR A RATE CUT

The mild inflation outlook, together with sluggish domestic demand, has set the right conditions for a

rate cut. The RMB is under significant appreciation pressure owing to the widening interest ratedifferentials between RMB and other key currencies in the world, especially after the recent ECB, RBAand BoK's rate cuts. Lowering the interest rate differentials will help dampen the capital inflows, whilefalling inflation will offset the risk of negative carry in deposit rates. Meanwhile, the PBoC could allowbanks to raise their deposit rates to up to 1.2 times the policy rate. This policy will not only pushforward interest rate liberalisation but also reduce the possibility of a negative real interest rate.

New yuan loans were RMB792.9bn, lower than Marchs RMB1.06trn, but higher than the marketexpected. Social financing, a measure of funds raised by entities in the real economy, amounted toRMB1.75trn in April, an increase of RMB783.3bn from last year. By the end of April, the broad measureof money supply (M2), which covers cash in circulation and all deposits, increased 16.1% y/y toRMB103.3trn, compared with Marchs 15.8%.

China - PBoC 1-year Lending Rate

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

2006 2007 2008 2009 2010 2011 2012 2013

China - Reserve Requirement Ratio

4

6

8

10

12

14

16

18

20

22

24

2006 2007 2008 2009 2010 2011 2012 2013

China - M2 and Credit

10

15

20

25

Oct

10

Jan

11

Apr

11

Jul

11

Oct

11

Jan

12

Apr

12

Jul

12

Oct

12

Jan

13

Apr

13

M2, y/y Credit, y/y

China - Total Social Financing

(RMB bn)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

TotalSocial

Financing

R

MBLoan

Foreign

Currency

Loan

E

ntrusted

Loan

Tr

ustLoan

B

anker's

Acceptance

Draft

NetCorp

Bond

Non-

Financial

Equity

Jan-Apr 2012 Jan-Apr 2013

China - New Yuan Loans

(RMB bn)

0

200

400

600

800

1,000

1,200

Apr

10

Jul

10

Oct

10

Jan

11

Apr

11

Jul

11

Oct

11

Jan

12

Apr

12

Jul

12

Oct

12

Jan

13

Apr

13

China - PBoC Weekly Open Market Operations

(RMB bn)

-1,000

-800

-600

-400

-200

0

200

400

600

800

1,000

03

Dec

17

Dec

31

Dec

14

Jan

28

Jan

11

Feb

25

Feb

11

Mar

25

Mar

08

Apr

22

Apr

C B Bill Matured Repo Matured Reverse Repo

CB Bill Repo Rev. Repo Matured

Net

Liquidity Injection

Liquidity Withdrawal

Sources: Bloomberg, CEIC, PBoC, ANZ


8/23


9/23


CHINA

PROPERTY MARKET: PRICES PICK UP FURTHER IN MARCH

The ANZ property price index rose 4.2% y/y in March, up from 2.2% the previous month, indicating a fast

acceleration in price momentum.

New residential property prices rose in 68 of 70 cities m/m in March, compared with 66 in February. On ay/y basis, prices increased in 67 cities. Notably, housing prices surged in first tier cities, with Beijing,Shanghai, Guangzhou and Shenzhen up 8.6% y/y, 6.4%, 11.1% and 8.9% respectively.

Property transactions in major cities slowed down significantly in April, after a strong performance inMarch, as more curbing policies gets rolled out.

China - Property Price Index

(y/y)

-4

-2

0

2

4

6

8

10

12

14

16

18

2005 2006 2007 2008 2009 2010 2011 2012 2013

Official Property Price Index ANZ Property Price Index

China - First Tier City New Residential Property

Prices (y/y)

-4

-2

0

2

4

6

8

10

12

Jan

11

Mar

11

May

11

Jul

11

Sep

11

Nov

11

Jan

12

Mar

12

May

12

Jul

12

Sep

12

Nov

12

Jan

13

Mar

13

Beijing Shanghai Guangzhou Shenzhen

China - 70 City New Residential Property Price

(number of cities m/m change)

0

10

20

30

40

50

60

70

Mar

11

May

11

Jul

11

Sep

11

Nov

11

Jan

12

Mar

12

May

12

Jul

12

Sep

12

Nov

12

Jan

13

Mar

13

Decrease No C hange Increase

NumberofCities

China - 70 City New Residential Property Price

(number of c ities y/y change)

0

10

20

30

40

50

60

70

Mar

11

May

11

Jul

11

Sep

11

Nov

11

Jan

12

Mar

12

May

12

Jul

12

Sep

12

Nov

12

Jan

13

Mar

13

Decrease No Change Increase

NumberofCities

China - First Tier City Property Transactions

(thousand sq m, 30-day moving sum)

0

500

1,000

1,500

2,000

2,500

3,000

Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13

0

100

200

300

400

500

600

700

Beijing Shanghai Guangzhou Shenzhen (RHS)

China - Floor Space Started and Sold

(y/y)

-40

-30

-20

-10

0

10

20

30

40

50

60

Sep

10

Dec

10

Mar

11

Jun

11

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13

Floor Space Started Floor Space Sold



10/23


11/23


TAIWAN

REAL ACTIVITY: Q1 GDP DRAGGED BY POOR GLOBAL DEMAND

Q1 GDP (advance estimate) slowed to 1.54% y/y, from 3.72% in Q4, much lower than market

expectations of 3.1%. Sequentially, the economy contracted 0.81% saqr or 3.21% saar. Globaleconomic recovery failed to gain traction and weak external demand dragged on the economy, reflectingthe slowdown in Mainland China and the EU.

We believe momentum will pick up mildly in Q2 and accelerate through the rest of the year, inconjunction with the pick up in China and the US. Domestically, investment should continue to be themain driver, as investment from electronic producers remains upbeat.

Industrial production declined 3.28% y/y in March, from an 11.61% contraction in February. Meanwhilecommercial sales fell 0.65% y/y, from -6.00% previously, but still below market expectations. Globaland regional economic conditions have weighed on the domestic economy.

Taiwan - Real GDP Growth

-10

-5

0

5

10

15

20

25

Mar

09

Jul

09

Nov

09

Mar

10

Jul

10

Nov

10

Mar

11

Jul

11

Nov

11

Mar

12

Jul

12

Nov

12

Mar

13

y /y q/q, saar

Taiwan - Contributions to GDP Growth

(ppt)

-6

-4

-20

2

4

6

810

12

14

Jun

10

Sep

10

Dec

10

Mar

11

Jun

11

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13


Investment Change in Stocks

Net Exports y/y

Taiwan - Economic Activities

(y/y)

-25

-20

-15

-10

-5

0

5

10

15

20

25

May

11

Jul

11

Sep

11

Nov

11

Jan

12

Mar

12

May

12

Jul

12

Sep

12

Nov

12

Jan

13

Mar

13

Commercial sales Industr ial production

Exports Imports of Machineries

Export orders

Taiwan - Commercial Sales

(y/y)

-15

-10

-5

0

5

10

15

20

25

Sep

10

Dec

10

Mar

11

Jun

11

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13

Commercial Sales Wholesale Trade Retail Trade

Taiwan - Industrial Production Index

-20

-15

-10

-5

0

5

10

15

20

25

Sep

10

Dec

10

Mar

11

Jun

11

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13

40

60

80

100

120

140

160

y/y Index (RHS)

Taiwan - Industrial Production

of Major Sectors

(y/y)

-30

-20

-10

0

10

20

30

40

50

Sep

10

Dec

10

Mar

11

Jun

11

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13

Electronic Parts Basic Metal

Chemical Materia ls Tech Products

Sources: CEIC, ANZ


12/23


TAIWAN

EXTERNAL TRADE: EXPORTS CONTRACTED IN APRIL

Exports contracted by 1.9% y/y in April, from a 3.3% gain in March, reflecting a general softening ofglobal demand. Electronic exports, however, remained resilient and gained 3.4% y/y. Imports

contracted 9.2% y/y in April, from a 0.2% increase in March. The sharp decline of imports was largelydue to a 21% y/y reduction in oil imports. The trade surplus narrowed to USD2.27bn, from USD3.20bn.

Exports to the Mainland and Hong Kong edged up 0.2% y/y. Exports to US, Japan and ASEAN6 gained4.9%, 1.9% and 0.6% respectively. However, shipments to Europe declined sharply by 19.3% y/y. JPYweakness appeared to affect Taiwans exports and export orders differently. As shipments to Japan rose

9% y/y in the first four months while sales order from Japanese buyers declined in Q1, suggesting thatthe weak yen has affected Taiwans manufacturers at the regional level instead of domestic producers.

Export orders fell 6.6% y/y in March, following a 14.5% contraction in February and much lower thanthe market expectation of a 1.9% increase. Notably, orders from Japan dropped 15.6% y/y, suggestingthe weakening JPY is starting to have an impact on export orders on a weaker JPY/USD valuation.

Taiwan - Trade Developments

-20

-10

0

10

20

30

40

50

Apr

11

Jun

11

Aug

11

Oct

11

Dec

11

Feb

12

Apr

12

Jun

12

Aug

12

Oct

12

Dec

12

Feb

13

Apr

13

-2

-1

0

1

2

3

4

5

Trade Balance, $bn (RHS) Exports, y/y Imports, y/y

Taiwan - Exports Comparison with South Korea

(y/y)

-20

-15

-10

-5

0

5

10

15

20

25

30

Apr

11

Jun

11

Aug

11

Oct

11

Dec

11

Feb

12

Apr

12

Jun

12

Aug

12

Oct

12

Dec

12

Feb

13

Apr

13

Taiwan South Korea

Taiwan - Exports by Destination

(y/y)

-40

-30

-20

-10

0

10

20

30

40

50

Apr

11

Jun

11

Aug

11

Oct

11

Dec

11

Feb

12

Apr

12

Jun

12

Aug

12

Oct

12

Dec

12

Feb

13

Apr

13

Asia ex Mainland & HK HK Mainland Europe US

Taiwan - Imports by Origin

(y/y)

-40

-30

-20

-10

0

10

20

30

40

50

60

Apr

11

Jun

11

Aug

11

Oct

11

Dec

11

Feb

12

Apr

12

Jun

12

Aug

12

Oct

12

Dec

12

Feb

13

Apr

13

-90

-60

-30

0

30

60

90

120

150

180

Asia ex Ma inland & HK Ma inland Europe US HK (RHS)

Taiwan - Export Orders

-20

-10

0

10

20

30

40

50

Mar

10

Jun

10

Sep

10

Dec

10

Mar

11

Jun

11

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13

20,000

23,000

26,000

29,000

32,000

35,000

38,000

41,000

44,000

y/y Export Orders in USD (RHS) Export Orders 12mma

Taiwan - Export Orders by Market

(y/y)

-30

-20

-10

0

10

20

30

40

May

11

Jul

11

Sep

11

Nov

11

Jan

12

Mar

12

May

12

Jul

12

Sep

12

Nov

12

Jan

13

Mar

13

China/HK Europe Japan ASEAN6 US

Sources: CEIC, ANZ


13/23


TAIWAN

PRICES: INFLATION REMAINED BENIGN IN APRIL

Headline inflation rose 1.04% y/y in April, down from 1.37%. Core CPI excluding vegetables and energy

climbed only 0.86% y/y. Food price rose 2.36% y/y, underpinned by the sharp increase in weatheraffected vegetable prices which surged 8.23%. Medical and health expenses increased 1.35% y/y duepartly to rising prices for Chinese herbs. Housing costs increased by 1.23% y/y, due to the low base ofcomparison after gas prices were allowed to rise by 6.35% last June.

Headline producer prices continue to drop further by 3.69% y/y. For the first 4 months of 2013, WPIdropped 3.23% y/y. Prices of metal, chemical and petroleum products dropped. The decline should havebeen wider as there was a lower base prior to the electricity rate rise in June 2012.

Inflation is not likely to be a concern for Taiwans economy. The weak yen and subsided commodityprices should continue to lower imported inflation in the coming months. As the upward adjustment ofelectricity fees was made last June, the base effect will begin in June this year.

Taiwan - CPI Momentum & Output Gap

-10

-8

-6

-4

-2

0

2

4

6

2006 2007 2008 2009 2010 2011 2012

GDP Actual-Po tential Gap, % CPI

Taiwan - Contribution to CPI Inflation

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.54.0

Jun 12 Aug 12 Oct 12 Dec 12 Feb 13 Apr 13

Food Rental

Housing ex . Rental Transportation

Education & Entertainment Other

CPI, y/y

Taiwan - Headline and Core CPI

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Oct

10

Jan

11

Apr

11

Jul

11

Oct

11

Jan

12

Apr

12

Jul

12

Oct

12

Jan

13

Apr

13

CPI

CPI ex Food & Energy

CPI ex Fruits, Vegetables, Fish, Shellfish & Energy

Taiwan - CPI and Real Interest Rate

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Oct

10

Jan

11

Apr

11

Jul

11

Oct

11

Jan

12

Apr

12

Jul

12

Oct

12

Jan

13

Apr

13

Real interest rate: 1-year Term Deposits minus CPI Inflation 3mmaCPI y/y 3mma

Taiwan - WPI

-6

-4

-2

0

2

4

6

8

10

Oct

10

Jan

11

Apr

11

Jul

11

Oct

11

Jan

12

Apr

12

Jul

12

Oct

12

Jan

13

Apr

13

-3

-2

-1

0

1

2

3

4

5

m/m sa (RHS) y/y

Taiwan - Import Price Index

(y/y)

-10

-5

0

5

10

15

20

25

Oct

10

Jan

11

Apr

11

Jul

11

Oct

11

Jan

12

Apr

12

Jul

12

Oct

12

Jan

13

Apr

13

ImPI in TWD ImPI in USD

Sources: CEIC, ANZ


14/23


TAIWAN

MONETARY AND RATE POLICIES: CBC TO HOLD IN JUNE

We believe the CBC will not cut rates in response to sluggish growth given generally relaxed liquidity

conditions. With a stable CPI, the central bank will be inclined to hold the policy rate at its June meeting.We believe the increasingly volatile currency market will prompt the CBC to watch for a stable exchangerate regime. We maintain our forecast that the first policy rate hike will occur in Q4 2013 at the earliest.

On the exchange rate front, the CBC has recently issued a report which suggests that it is not worriedabout losing export competitiveness in view of the yen weakening as the KRW appears to appreciateagainst the JPY more than that for the TWD. We believe the central bank will continue to ensure anorderly function of the foreign exchange market and will emphasize stability in response to globalcurrency volatility.

Taiwan - Money Supply

(y/y)

0

2

4

6

8

10

12

14

Sep

10

Dec

10

Mar

11

Jun

11

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13

M1b M2

Taiwan - Money Market Interest Rates (bps)

0

20

40

60

80

100

120140

160

180

200

Aug

10

Nov

10

Feb

11

May

11

Aug

11

Nov

11

Feb

12

May

12

Aug

12

Nov

12

Feb

13

May

13

90-day Commercial Paper Interbank Overnight Rate

Rediscount Rate 10 y r Gov 't Bond Yield

Taiwan - TWD Exchange Rates

95

97

99

101

103

105

107

Feb

11

Apr

11

Jun

11

Aug

11

Oct

11

Dec

11

Feb

12

Apr

12

Jun

12

Aug

12

Oct

12

Dec

12

Feb

13

Apr

13

28

28

29

29

30

30

31

BIS NEER BIS REER TWD/USD Spot (RHS, inverted)

Taiwan - USDTWD vs USDKRW

(One year rolling index)

92

94

96

98

100

102

104

106

May

12

Jun

12

Jul

12

Aug

12

Sep

12

Oct

12

Nov

12

Dec

12

Jan

13

Feb

13

Mar

13

Apr

13

May

13

USDTWD USDKRW

Taiwan - RMB Deposits

(RMB mn)

0

10,000

20,000

30,000

40,000

50,000

60,000

Aug

11

Oct

11

Dec

11

Feb

12

Apr

12

Jun

12

Aug

12

Oct

12

Dec

12

Feb

13

Taiwan - Real Estate Loans

-30

-20

-10

0

10

20

30

40

50

60

70

80

Sep

10

Dec

10

Mar

11

Jun

11

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13

42.0

42.2

42.4

42.6

42.8

43.0

43.2

43.4

43.6

43.8

44.0

Real Estate Loan, TWD bn

RE Loan as % of Banks' Loan Book (RHS)

Sources: CEIC, ANZ


15/23


HONG KONG

REAL ACTIVITY: THE ECONOMY FLATTENED IN Q1

GDP grew 2.8% y/y in the first quarter. Sequentially, the economy barely expanded with a 0.2% q/q sagain. This is in line with the downside surprise we saw for China and Taiwan. Private consumption rose7.0% y/y, while investment contracted 2.2%. Goods exports and services exports rose 8.8% and 4.9%respectively, while imports of goods and services grew by 9.6% and 1.2% respectively.

Retail sales growth moderated to 9.8% y/y in March, compared with 22.7% in February. In Q1 retailsales increased 13.9% y/y, from 7.6% in Q4, reflecting better domestic consumption and inbound touristspending.

The unemployment rate edged up 0.1ppt to 3.5% (sa) in March. Non-seasonally adjusted constructionunemployment rate rose further, consistent with past seasonal factors.

Hong Kong - Contributions to GDP Growth

(ppt)

-10

-5

0

5

10

15

Sep

10

Dec

10

Mar

11

Jun

11

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13


Investment Changes in Inventories

Net Exports Total, y/y

Hong Kong - GDP

-4

-2

0

2

4

6

8

10

12

Mar

10

Jun

10

Sep

10

Dec

10

Mar

11

Jun

11

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13

y/y q/q, saar

Hong Kong - Retail Sales

(y/y)

0

5

10

15

20

25

30

35

Sep

10

Dec

10

Mar

11

Jun

11

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13

Value Volume

Hong Kong - Retail Sales Components

(y/y)

-20

-10

0

10

20

30

40

50

6070

Dec

10

Mar

11

Jun

11

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13

Clothing & Footwear Moto r Vehic le s

Jewellery, Watches & C locks

Hong Kong - Unemployment Rate

0

2

4

6

8

10

12

14

Mar

09

Jul

09

Nov

09

Mar

10

Jul

10

Nov

10

Mar

11

Jul

11

Nov

11

Mar

12

Jul

12

Nov

12

Mar

13

Construction Overall economy Finance & Bus. Services

Hong Kong - Logistics Activities

(y/y)

-20

-15

-10

-5

0

5

10

15

20

25

May

11

Jul

11

Sep

11

Nov

11

Jan

12

Mar

12

May

12

Jul

12

Sep

12

Nov

12

Jan

13

Mar

13

Container Throughput (Sea) Passenger Movement (Air)

Air Cargo Throughput

Sources: CEIC, ANZ


16/23


HONG KONG

EXTERNAL SECTOR: EXPORTS REBOUNDED IN MARCH ON CROSS-BORDER TRADE

Export growth rebounded to 11.2% y/y in March, from a 16.9% contraction February, driven by exports

to China. CNY effects subsided in March as exports to Mainland China rebounded strongly by 16.5% y/y,following a 23.1% drop in February. Exports to the US registered a modest growth of 0.4% y/y, from a4.6% decline. However shipments to Japan declined 0.6%, compared with -19.2 previously.

Imports increased 11.3% y/y, compared with -18.3% in the previous month. The trade deficit widenedto HKD49.1bn, from HKD34bn.

Our recent study (ANZ Greater China Insight 7, May 2013) found that the cross-border trade betweenHong Kong and the Mainland might reflect the problem of over-invoicing and was motivated by financialgains. As the Chinese authorities start to tighten regulations against non-genuine trades, these type offlows are likely to decline going forward.

Hong Kong - Trade Developments

-50

-40

-30

-20

-10

0

10

20

30

40

Sep

10

Dec

10

Mar

11

Jun

11

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13

Trade Balance, HKD bn Exports, y/y Imports, y/y

Hong Kong - Exports by Destination

(y/y)

-30

-20

-10

0

10

20

30

40

50

Sep

10

Dec

10

Mar

11

Jun

11

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13

US EU NIE ASEAN China

Hong Kong - Regional Contributions to ExportGrowth (ppt)

-20

-15

-10

-5

0

5

10

15

20

Mar 12 May 12 Jul 12 Sep 12 Nov 12 Jan 13 Mar 13

ASEAN EU US China

Japan NIEs Other Total, y/y

Hong Kong - Regional Contributions to ImportGrowth (ppt)

-25

-20

-15

-10

-5

0

5

10

15

20

25

30

Apr

12

May

12

Jun

12

Jul

12

Aug

12

Sep

12

Oct

12

Nov

12

Dec

12

Jan

13

Feb

13

Mar

13

ASEAN EU US China

Japan NIEs Other Total, y/y

Hong Kong - Product Contributions to Export

Growth (ppt)

-20

-15

-10

-5

0

5

10

15

20

Apr

12

May

12

Jun

12

Jul

12

Aug

12

Sep

12

Oct

12

Nov

12

Dec

12

Jan

13

Feb

13

Mar

13C hemicals Manufactures by Materials

Machinery, Transport Equip Misc Manufactures

Other Total, y/y

Hong Kong - Product Contributions to Import

Growth (ppt)

-25-20

-15-10-50

5101520

2530

Apr

12

May

12

Jun

12

Jul

12

Aug

12

Sep

12

Oct

12

Nov

12

Dec

12

Jan

13

Feb

13

Mar

13

C hemicals Manufactures by Materials

Machinery, Transport Equip Misc Manufactures

Other Total, y/y

Sources: CEIC, ANZ


17/23


HONG KONG

PRICES: PRICES DECLINE AFTER CHINESE NEW YEAR

Headline inflation eased to 3.6% y/y in March, from 4.4% in February, as prices retreated after the

Chinese New Year. Food prices eased 1.3ppts to 3.7%, reflecting prices declines after the festivals.Housing costs increased 5.2%, remaining the primary driver of inflation.

Looking ahead, inflationary pressures will remain as the labour market continues to be tight andresidential and commercial rents are still high. Hong Kong is unlikely to see its CPI dropping below 3.0%in 2013. CPI inflation may rise in the second half due to a relatively lower base last year.

Hong Kong - CPI Inflation

0

1

2

3

4

5

6

7

8

9

Sep

10

Dec

10

Mar

11

Jun

11

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13

Headline, y/y Excl. Gov't Relief, y/y

Hong Kong - Contribution to Inflation

-2

-10

1

2

3

4

5

6

May

12

Jun

12

Jul

12

Aug

12

Sep

12

Oct

12

Nov

12

Dec

12

Jan

13

Feb

13

Mar

13

Food Housing

Electricity, Gas & Water Transport

Misc services Others

y/y

Hong Kong - Inflation

(y/y)

-10

-5

0

5

10

15

20

Sep

10

Dec

10

Mar

11

Jun

11

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13

-40

-30

-20

-10

0

10

20

30

Food Housing Transport Elect., Gas & Water (RHS)

Hong Kong - CPI and CNY

0

1

2

3

4

5

6

7

8

9

Sep

10

Dec

10

Mar

11

Jun

11

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13

1.12

1.14

1.16

1.18

1.20

1.22

1.24

1.26

CPI, y/y HKD/CNY (RHS)

Hong Kong - CPI and Liquidity

0

2

4

6

8

10

12

14

16

18

1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013

-8

-4

0

4

8

12

16

3m HIBOR CPI, y/y (RHS)

Hong Kong - CPI and Unemployment Rate

0

1

2

3

4

5

6

78

9

Sep

10

Dec

10

Mar

11

Jun

11

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13

3.0

3.2

3.4

3.6

3.8

4.0

4.2

4.4

CPI, y/y Unemployment Rate, sa (RHS)

Sources: CEIC, ANZ


18/23


HONG KONG

MONEY AND BANKING: RMB DEPOSITS CONTINUED TO GROW ON A STRONG RMB

M2 money supply growth edged down to 9.5% y/y in March, from 9.7% in February. On a m/m basis,M2 contracted for the second straight month, by 0.6%.

RMB business continues to be a growth engine for the financial services. Hong Kongs RMB depositsincreased 2.2% to RMB668.1bn. RMB cross-border trade settlement rose to RMB340.8bn, fromRMB221.7bn.

Short term CNH interbank interest rates came off, following a jump on 8 May. The overnight interbankrates quoted by Hong Kongs banks on the TMAs platform jumped to around 4.5% on 8 May, as liquidityconditions tightened. However, the surge was short-lived as interbank rates quickly came down over thefollowing days.

Hong Kong - Money Supply

-5

0

5

10

15

20

Sep

10

Dec

10

Mar

11

Jun

11

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13

M2, y/y M2, m/m

Hong Kong - HKMA Aggregate Balance

(HKD bn)

0

50

100

150

200

250

300

350

May

2009

Nov

2009

May

2010

Nov

2010

May

2011

Nov

2011

May

2012

Nov

2012

May

2013

0

5

10

15

20

25

30

Daily Change (RHS) HKMA Aggregate Balance

Hong Kong - Hang Seng Index and HKD

18,000

19,000

20,000

21,000

22,000

23,000

24,000

May 12 Jul 12 Sep 12 Nov 12 Jan 13 Mar 13 May 13

7.745

7.750

7.755

7.760

7.765

7.770

7.775

Hangseng Index USDHKD (RHS)

Offshore CNH O/N HIBOR

(Fixing of individual banks)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Apr

12

May

12

Jun

12

Jul

12

Aug

12

Sep

12

Oct

12

Nov

12

Dec

12

Jan

13

Feb

13

Mar

13

Apr

13

May

13

Hong Kong - RMB Trade Settlement

0

50

100

150

200

250

300

350

400

Sep

10

Nov

10

Jan

11

Mar

11

May

11

Jul

11

Sep

11

Nov

11

Jan

12

Mar

12

May

12

Jul

12

Sep

12

Nov

12

Jan

13

Mar

13

0

20

40

60

80

100

120

140

Ratio to HK-China Trade (RHS)

Ratio to Total HK Trade (RHS)

Ratio to China Total Trade (RHS)Trade settlement amount (3mma), RMBbn

Hong Kong - RMB Deposits and Cross-Border

Trade Settlement

0

100

200

300

400

500

600

700

800

Mar

09

Jul

09

Nov

09

Mar

10

Jul

10

Nov

10

Mar

11

Jul

11

Nov

11

Mar

12

Jul

12

Nov

12

Mar

13

0

2

4

6

8

10

12

Deposit, RMBbn

Trade settlement amount, RMBbnRMB as % of To tal Deposits (RHS)

Sources: CEIC, ANZ


19/23


HONG KONG

REAL ESTATE: PROPERTY PRICES DECLINED FROM THE PEAK

Government tightening measures have started to bite. Property price have begun to pull back as banks

started to raise mortgage interest rates. Centa-City Leading Index declined from its peak on 17 March at123.66, to 118.51 on 5 May.

A gradual reduction in property price should help lower the risk of a real estate collapse as propertyprices should soon return to fair value. In our view, stable residential prices are a pillar supportingprivate consumption as property constitutes a substantial portion of household wealth. Even thoughrising household debt has become an increasing concern, the government needs to proceed with itsproperty tightening policy in an orderly and flexible manner in order to avoid a sharp contraction ofhousehold wealth.

Hong Kong - Centa City Leading Index

0

20

40

60

80

100

120

140

1997 1999 2001 2003 2005 2007 2009 2011 2013

Hong Kong - Residential Property Transactions

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Apr

10

Aug

10

Dec

10

Apr

11

Aug

11

Dec

11

Apr

12

Aug

12

Dec

12

Apr

13

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Number of Transactions (RHS) Value, HKD mn

Hong Kong - Housing Market

140

160

180

200

220

240

260

Oct

10

Jan

11

Apr

11

Jul

11

Oct

11

Jan

12

Apr

12

Jul

12

Oct

12

Jan

13

Apr

13

30

32

34

36

38

40

42

44

46

48

50

Property Price Index (1999=100)

Centaline Affordability Ratio, All Households (RHS)

Hong Kong - Property Price and Unemployment

0

50

100

150

200

250

300

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

0

1

2

3

4

5

6

7

8

9

Property Price Index (1990=100)

Unemployment Rate (Reverse Scale) (RHS)

Hong Kong - Real Property Price Index

Actual vs. Fair Values(Jul 97 = 100, CPI adjusted)

20

30

40

50

60

70

80

90

100

110120

1994 1997 2000 2003 2006 2009 2012

Actual Fair Value

Hong Kong - Consumption and Property Price

(y/y)

-10

-5

0

5

10

15

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

-50

-40

-30

-20

-10

0

10

20

30

40

5060

Private Consumption Residential Property Price (RHS)

Sources: CEIC, ANZ


20/23


CHINA LIQUIDITY REPORT

China - PBoC Open Market Operations Gross

Liquidity Injection (RMB bn)

0

50

100

150

200

250

01 Mar15 Mar 29 Mar12 Apr 26 Apr 10 May24 May 07 Jun 21 Jun

CB Bill Matured Repo Matured Reverse Repo

China - PBoC Weekly Open Market Operations

(RMB bn)

-1,000

-800

-600

-400

-200

0

200

400

600

800

1,000

10

Dec

24

Dec

07

Jan

21

Jan

04

Feb

18

Feb

04

Mar

18

Mar

01

Apr

15

Apr

29

Apr

C B Bill Matured Repo Matured Reverse Repo

CB Bill Repo Rev. Repo Matured

Net

Liquidity Injection

Liquidity Withdrawal

China - 7-day Repo Rate

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

Sep

12

Oct

12

Nov

12

Dec

12

Jan

13

Feb

13

Mar

13

Apr

13

May

13

China - Shanghai Interbank Offered Rate

0

1

2

3

4

5

6

Jul

12

Aug

12

Sep

12

Oct

12

Nov

12

Dec

12

Jan

13

Feb

13

Mar

13

Apr

13

May

13

O/N One W eek Tw o W eek One Month

Sources: CEIC, Bloomberg, ANZ

PBoC Resumed 3-month bill issuance last week

The PBoC resumed the issuance of the 3-month bills for the first time since December 2011, to offset the

capital inflows as the overseas investors pump money into the country to take advantage of the yuans rise.

For the whole week, the central bank injected RMB84bn into the open market. Overall market liquidity

conditions remain plentiful.

April monetary data stronger than expected

China released April monetary data last Friday:

New yuan loans were RMB792.9bn, lower than Marchs RMB1.06trn, but higher than the marketexpected.

The country's social financing, a measure of funds raised by entities in the real economy, amounted to

RMB1.75trn in April, an increase of RMB783.3bn y/y.

By the end of April, the broad measure of money supply (M2), which covers cash in circulation and all

deposits, increased 16.1% y/y to RMB103.3trn, compared with Marchs 15.8%.

Chinas monetary data suggests that credit expansion remains strong, supported by relaxed market liquidity

conditions. The Chinese authorities are likely to continue the accommodative monetary policy in the

foreseeable future.

Li-Gang Liu, Hao Zhou


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FORECASTS

y/y, unless otherwise noted Forecasts

Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 2013

Real GDP

China 9.2 8.9 8.1 7.6 7.4 7.9 7.7 7.8Taiwan 3.53 1.21 0.59 -0.12 0.73 3.72 1.54 3.60

Hong Kong 4.4 3.0 0.7 1.1 1.4 2.5 2.8 2.5

Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13

Consumer Price Index

China 1.9 1.7 2.0 2.5 2.0 3.2 2.1 2.4*

Taiwan 2.96 2.34 1.59 1.60 1.13 2.96 1.37 1.37*

Hong Kong 3.8 3.8 3.8 3.8 3.0 4.4 3.6 3.6*

Producer Price Index

China -3.6 -2.8 -2.2 -1.9 -1.6 -1.6 -1.9 -2.6*

Unemployment Rate, %

Taiwan 4.28 4.28 4.24 4.21 4.20 4.16 4.18 4.19

Hong Kong 3.3 3.4 3.4 3.3 3.4 3.4 3.5 3.5

Exports

China 10.0 11.6 2.9 14.8 25.2 21.8 10.0 14.7*

Taiwan 10.3 -1.9 0.8 8.9 21.6 -15.8 3.3 -1.9*

Hong Kong 15.2 -2.8 10.5 14.4 17.6 -16.9 11.2 10.6

Imports

China 2.3 2.4 0.0 6.0 28.8 -15.2 14.1 16.8*Taiwan 1.2 -1.8 0.1 1.6 22.2 -8.5 0.2 -8.2*

Hong Kong 14.9 3.3 9.0 11.9 23.9 -18.3 11.3 8.2

Trade Balance

China, USD bn 27.7 32.0 19.6 31.6 29.1 15.2 -0.8 18.2*

Taiwan, USD bn 4.09 3.3 3.4 4.1 0.5 0.9 3.2 2.3*

Hong Kong, HKD bn -45.2 -42.7 -44.1 -48.0 -27.5 -34.0 -49.1 -40.1

PMI and Export Orders

China Manufacturing PMI 49.8 50.2 50.6 50.6 50.4 50.1 50.9 50.6*

Taiwan Export Orders 1.91 3.16 11.12 8.51 17.95 -14.47 -6.60 -4.72

Industrial Production

China 9.2 9.6 10.1 10.3 - 9.9 8.9 9.0

Taiwan 2.97 4.83 5.71 2.05 19.05 -11.61 -3.28 5.70

Electricity Production

China 1.5 6.4 7.9 7.6 - 3.4 2.1 -

Retail Sales

China 14.2 14.5 14.9 15.2 - 12.3 12.6 12.8

Taiwan (Commercial Sales) -1.50 -0.68 1.66 1.49 7.80 -6.00 -0.65 3.20

Hong Kong 9.5 3.9 9.5 9.1 10.5 22.7 9.8 14.5

M1 Growth

China 7.3 6.1 5.5 6.5 15.3 9.5 11.9 11.9

Taiwan (M1 B) 3.35 3.6 3.7 4.9 4.0 5.7 6.0 -

Hong Kong 10.3 13.1 15.3 15.9 20.2 13.6 17.6 -

M2 Growth

China 14.8 14.1 13.9 13.8 15.9 15.2 15.7 16.1

Taiwan 3.96 3.3 3.3 3.7 3.0 3.5 3.8 -

Hong Kong 11.0 10.0 11.0 12.1 14.1 8.5 9.2 -

2007 2008 2009 2010 2011 2012 2013

Current Account, % of GDP

China 10.1 9.3 4.9 4.0 1.9 2.3 2.6*

Taiwan 8.9 6.9 11.4 9.3 8.9 10.5 10.8

Hong Kong 13.0 15.0 9.5 6.6 4.8 1.3 2.8

Foreign Reserves, USD bn

China 1,528 1,946 2,399 2,847 3,181 3,312 3,443*

Taiwan 270 292 348 382 386 403 405*

Hong Kong 153 183 256 269 285 317 304*

Government Fiscal Surplus/Deficit, % of GDPChina 0.2 -0.8 -2.8 -2.5 -1.8 -1.5 2.0

Taiwan 0.9 0.9 -2.2 -1.2 -1.1 -2.6 -

Hong Kong (FY ending in March) 3.8 7.3 0.1 1.5 4.1 3.8 -

Forecasts

13 May-13 Jun-13 Sep-13 Dec-13 Mar-14

Foreign Exchange Rate

USD/CNY 6.146 6.20 6.17 6.15 6.13

USD/TWD 29.819 - - - -

USD/HKD 7.761 - - - -

Policy Interest Rate

China PBOC 1-year Lending Rate 6.00 6.00 6.00 6.00 6.25

Taiwan CBC Discount Rate 1.875 1.875 1.875 2.000 2.125

Hong Kong Base Rate 0.50 0.50 0.50 0.50 0.50

Shaded cells and column refer to forecast; *Indicates actual released data or YTD

Sources: CEIC, Bloomberg, ANZ


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ANZ Greater China Economic Insight Incl Regional Chartbook - 14 May 2013

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