GDP grew 6.7% y/y in Q2, the same rate as in Q1. There’s downward pressure on future growth, though we also expect growth to stabilize. Industrial output was up 6.1% y/y. Though growth was 0.3 pps faster than in Q1, the recovery is weak.

Fixed asset investment rose 8.2% y/y in real terms, down 2.5 pps from Q1, and at the end of June was up only 7.4% y/y. In particular, private investment was up just 1.4% y/y, down 4.3 pps from Q1, and even shrank -0.1% y/y in June.

Retail sales of consumer goods were up 10.6% y/y in June in nominal terms, and up 0.6 pps from May. In Q2, imports fell -6.8% y/y, up 6.7 pps from Q1. After taking out seasonal factors, imports have been recovering since March. Import recovery is not due to stronger demand, but to firms’ substitution of overseas goods, considering the increase of domestic producer goods’ prices due to continuing supply-side reform. Exports were down -4.6% y/y and, although up 5.1 pps from Q1, still face the risk of another dip.

CPI was up 1.8% y/y in June, decreasing for two consecutive months, down 0.4 pps from April. The declines are more related to seasonal factors, though. Producer prices are still in a recovery cycle. The ex-factory price index of industrial products in June fell -2.6% y/y, up 0.2 pps from May. PPI rose 0.2% m/m, and fell -3.4% y/y, trending up as well.

M1 and deposits from non-financial enterprises rose 24.6% y/y and 32.5% y/y in June, respectively, up 20.3 pps and 30.5 pps from June 2015. Such large increases amid a weak economy demonstrates the diminishing effect of monetary policy on the real economy. Supply-side reforms to eliminate excessive capacity leaves firms reluctant to invest, easy credit notwithstanding.

The results of the June 23rd Brexit referendum triggered a series of financial and economic consequences, such as the drop of pound sterling. If the UK leaves the EU, that would certainly diturb British trade with China, though it also creates an opportunity for China’s heated overseas enterprise expansion into the rest of the world. Pound depreciation will on the one hand put depreciation pressure on the yuan, considering the major roles of both in the currency basket, to which the yuan is pegging. On the other hand, the close relation between the United States and Europe will reduce the likelihood of the Fed hiking interest rates, given such high counterparty uncertainty. And that will reduce the prospects for yuan depreciation.

Fixed asset investment growth slowed significantly in April, rising by 10.1% y/y, down 0.6 pps from Q1. Value added for major industrial firms was likewise weak, at 6% y/y, down 0.6 pps from March -- and a break from the previous recovery. We expect private investment to pick up after industrial output shows clear signs of rebound – rising above 10% y/y, for example. More actions need to be taken to boost growth, and the Chinese government is advocating structural reforms, by encouraging more innovation. But we hope China does not deviate too much from its old path of investment.

Retail sales of social consumption goods were up 10.1% y/y in nominal terms, down 0.2 pps from Q1. Exports in dollar terms fell -1.8% y/y, up 7.8 pps from Q1. Imports fell -10.9% y/y, 2.6 pps more than in Q1. Both indicators are still in the negative zone, though narrowing to the zero line.  We do not expect trade to improve in the short term.

Prices are stabilizing, with CPI up 2.3% y/y in April, flat on March. In April, the ex-factory price index rose 0.7% m/m and fell -3.4% y/y. PPI rose 0.6% m/m and fell -4.4% y/y. The two indices’ y/y decreasing magnitudes fell by 0.9 and 0.8 pps, respectively.

M1 rose 22.9% y/y, up 0.8 pps from March, showing accelerated growth. But other major financial indicators are all declining. The broad money supply, M2, was up 12.8% y/y, down 0.6 pps from March. In April, total societal financing plunged by -28.9% y/y.

The People’s Bank of China made special announcements in response to the decline of financial indicators, emphasizing irregular factors underlying the drops. The Bank stressed that the general direction of monetary policy hasn’t, and wouldn’t, change.

China’s tax system underwent a major shift on May 1st, when the VAT system was extended to all sectors of the economy. Previously, firms paid tax based on their revenue; they’ll now enjoy a large tax reduction. We estimate that business taxes will fall by over RMB 300 billion. But the VAT reform will also generate enormous growth opportunities, especially for mid-sized firms that are mostly private, and will generate more jobs. The government budget won’t suffer, as VAT reform will attract more firms into business, and raise the output of existing firms – which will all increase government revenue.

GDP rose 6.7% y/y in Q1. Although that is still slower than in Q4 2015, improved main indicators for growthbolster our confidence in future growth.

Industrial output rose 6.8% y/y in March, up 0.7 pps from the previousquarter. Fixed asset investment excluding agriculture rose 10.7% y/y in Q1, up 1.4 pps from Q4, and 11.1% y/y,with growth especially strong in March. In Q1, the real estate market heated up, and sales were up 33.1% y/y.

Retail sales of social consumption goods rose10.3% y/y in Q1 in nominal terms, up 0.1 pps from the previous quarter, and rose 10.5% y/y in March.

Exports in dollar terms fell -9.6% y/y in Q1, down 4.6 pps from Q4 2015. Imports fell -13.5% y/y, down 1.7 pps. However the monthly growth of exports in March was 18.7%, indicating a good possibility of further improvement.

In March, CPI rose 2.3% y/y, flat on February. One notable change was in industrial prices, which had been negative and falling for four years, but which turned upwards in March. The ex-factory price index rose 0.5% m/m, and PPI rose 0.3% m/m.

At the end of March, M1 rose 22.1% y/y, up a significant 6.9 pps from the end of 2015, and accelerating. M2 rose 13.4% y/y, which was quite stable. Savings deposits from non-financial enterprises rose 19.4% y/y, up 5.7 pps from the end of 2015 -- a major increase.

Prime Minister Li Keqiang announced in an address to Congress on March 5th that the economic growth target would be 6.5%-7% for 2016 - the first time a GDP growth target was set for a particular time frame. Industrial output rose 5.4% y/y, a new low in the current cycle of decline. Fixed asset investment shows positive signs, and was up 10.2% y/y, up 0.9 pps from Q4 2015. State investment has increased, in order to lift growth. For example, planned total investment for new projects increased 41.1% y/y in January-February, giving us confidence in future growth.

Retail sales of consumer goods rose 10.2% y/y in nominal terms, down 0.9 pps from Q4. In February, CPI rose 2.3% y/y, up 0.7 pps from December. The ex-factory price index of industrial products fell -4.9% y/y, and PPI fell -6.5% y/y, finally narrowing the gap to zero, partly due to supply-side reform.

Trade fell further. Exports decreased -17.8% y/y in January-February, and are probably down around -10% y/y, after adjusting for last year’s large base number. Imports fell -16.7% y/y.  

M1 was up 17.4% y/y at the end of February, up 1 pps from January, after factoring in the Chinese New Year effect. This shows that monetary policy is still loosening. Total loan size and societal financing scale have returned to normal levels.

Shenzhen, Beijing and Shanghai were in the headlines, as housing prices in first-tier cities have surged. Of particular note, housing prices in Shenzhen have risen more than 50% over the past year. Moreover, the real estate market recovered nationally. All this is contrary to the oft-heard pessimistic forecast in recent years, and is consistent with our previous forecasts.

Buyers’ strong expectations are based on their 10% per year increasing income. China still has probably the world’s strictest housing purchase entry regulations. The housing price surge is not surprising any more, viewed in light of the biggest rural-to-urban migration in human history, and the migration between cities (big cities are seen as more attractive, because of better public resources and job prospects). We do not rule out the risks of empty towns, but these mainly exist around a very limited number of small cities, and their systemic risk is quite low. We are still confident about China’s housing market, as long as the Chinese economy is growing at a moderate rate.

2017

1 Study on Shenzhen Establishing Demonstration Zone on Sustainable Development (2017-2030)
2 Study on Opening-up Economy System of Shenzhen
3 Study on Practical Experience of Beibu Gulf Economic Zone
4 Study on Revitalization of Northeast China and Innovation Development of Changchun New District
5 Master Plan for Luoyang Area of China (Henan) Pilot Free Trade Zone
6 Study on Sino-Singapore Tianjin Eco-City
7 Development Plan of Guangzhou-Foshan-Zhaoqing-Qingyuan-Yunfu-Shaoguan Economic Circle
8 Urban Development Strategy of Huizhou City Guangdong Province
9 Development Plan of Guangzhou Airport Economic Demonstration Zone
10 Study on Positioning of Six Major Zones in Dongguan City Guangdong Province
11 Consultation for Dongguan Water Township Economic Zone Management Committee
12 Revision of 13th Five-Year Plan for Economic and Social Development of Chancheng District Foshan City Guangdong Province
13 Study on Industry and Land in Southwest Pioneering Area of Shunde District Foshan City Guangdong Province
14 Study on Frontier Business Environment Index 2017
15 Strategy of Qingyuan City to Spare Guangzhou of Functions
16 Strategic Cooperation on Poverty Alleviation between CDI and Heyuan City Guangdong Province
17 Development Strategy of Jianjiang and Luojiang Leisure Industry Belt in Huazhou City Guangdong Province
18 Industrial Plan of Dupont Chemical Area in Shenzhen
19 Industrial Plan of Chengjianmeiyuan Project in Shenzhen
20 Study on Positioning and Industrial Planning of Reserve Land in Shenzhen Futian Free Trade Zone
21 Study on Improvement of Shenzhen Futian Free Trade Zone
22 Industrial Plan of Kaisa Project in Anliangbacun Villiage Henggang Town Shenzhen
23 Industrial Plan of Sunac Guanying Project in Pingshan District Shenzhen
24 Industrial Plan of Developing Group of China Project in Nanshan District Shenzhen
25 Industrial Plan of Country Garden Project in Huizhou South Railway Station Area
26 Industrial Plan of Luotian No.1 Industrial Zone in Yanluo Subdistrict Baoan District Shenzhen
27 Study on Old Factory Area Renewal of Gaofa Science Park
28 Industrial Plan of Jiandachuang Reweal Project in Longhua District Shenzhen
29 Study on Industrial Planning and Investment Promotion for Guangxi Industrial City in Longhua District Shenzhen
30 Study on Industrial Renewal of Zhili Town Huzhou City Zhejiang Province
31 Industrial Plan of Fu'an No.1 and No. 3 Industrial City in Baoan District Shenzhen
32 Industrial Development Strategy of Deai Project in Longhua District Shenzhen
33 Industrial Plan of Meilin Urban Renewal Unit in Futian District Shenzhen
34 Industrial Plan of Times China Project in Longhua District Shenzhen
35 Study on Industrial Upgrading of Beidou Area Luohu District Shenzhen
36 Industrial Plan of Nanbo Electronic Tower Urban Renewal Unit in Nanshan District Shenzhen
37 Study on Shum Yip Terra Project in Chegongmiao Area Futian District Shenzhen
38 Industrial Plan of Urban Renewal Unit in Nanshan District Shenzhen
39 Industrial Plan of Urban Renewal Unit in Longgang District Shenzhen
40 Industrial Plan of Banxuegang Science and Technology City in Longgang District Shenzhen
41 Industrial Plan of Tiantangwei Project in Fenggang Town Dongguan City Guangdong Province
42 Study on Property Management of Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone
43 Study on Shenzhen Eastward Expansion in Pingshan District Shenzhen

2016

1 Study on Pathways and Strategies for Development of Great Bay Area of Guangdong, HK and Macau
2 A Series of Studies on Hong Kong Issues after Failure of Political Reform in 2015
3 Policy Suggestions for the Development of Border Regions of Shenzhen and HK
4 Study on Making New Breakthroughs in Major Areas of Cooperation between Shenzhen and HK
5 Study on Development Strategy of Shenzhen and Hong Kong Port (2016-2030)
6 Study on Great Bay Area of Guangdong, HK and Macau and Regional Development of Zhuhai
7 Study on Coordinated Development of the Economic Circle of Guangzhou, Foshan, Zhaoqing, Qingyuan, Yunfu, and Shaoguan
8 Coordinated Development Strategy for Daya Bay Rim in the “13th Five Year Plan” Period
9 Study on Innovation Schemes of Institutions and Mechanisms in Daya Bay Rim
10 Study on Building “A Port-City Integration Eco-Area” in Daya Bay Rim
11 Study on Coordination between Huizhou Daya Bay Economic and Technological Development Zone and East Shenzhen Development Strategy
12 Industrial Planning for Ganzhou, Jiangxi as An Industry Transfer Demo Base for Processing Trade
13 Industrial Planning for Guangdong-Fujian Economic Cooperation Zone in Raoping County
14 Implementation Plan to Build Luoyang as A Pilot City for “Made in China 2025” (2017-2019)
15 Implementation Plan to Build Luoyang as A Pilot City for Industry-Finance Cooperation (2017-2019)
16 Nurturing Fortune 500 Enterprises in Shenzhen: A Study of the Target Path
17 2030 Agenda for Sustainable Development: Wuhan as the City of Design
18 Strategy Research on Increasing Effective Investment in Zhangzhou, Fujian Province
19 Study of Dongguan in Achieving Higher Level Development in a Higher Position
20 13th Five Year Plan of Qianhai Shenzhen-Hong Kong Modern Service Cooperation Area
21 Study on Significance of Qianhai-Shekou Free Trade Zone to East Shenzhen Development Strategy
22 East Shenzhen Development Strategy and Action Plan
23 Action Plan for Building Pingshan District as the Northeastern Gate of Shenzhen
24 Consultation for the Research Center for East Shenzhen Development Strategy
25 Study on Building Nanshan District, Shenzhen as an Economic, Scientific, Cultural and International Communication Center
26 Analysis of Economic Performance of Luohu District, Shenzhen in 2016
27 Master Plan for Qujiang Economic Belt in Hechuan District, Chongqing
28 Study on Development Strategy and Financing Model of Binhai Development Zone in Dongguan City
29 Study on City Operation Framework of China Fortune Land Development Co., Ltd
30 Industrial Plan of Urban Renewal for Meilin-Caitian Area in Shenzhen
31 Industrial Plan of Urban Renewal Program for Shangliao Area in Bao’an District, Shenzhen
32 Industrial Plan of Urban Renewal Unit of Huanhonghua Land Parcel in Longhua District, Shenzhen
33 Industrial Plan of Urban Renewal for Shajing-Houting Industrial Area in Bao’an District, Shenzhen
34 Industrial Plan of Urban Renewal for Hezheng-Guanlan-Tianbei Industrial Area in Longhua District
35 Industrial Plan of Urban Renewal for Xinli Factory in Bantiannan Area, Longgang District, Shenzhen
36 Industrial Plan of Urban Renewal Unit of Huafa Area in Guangming New District, Shenzhen
37 Industrial Plan of Urban Renewal Unit of Maliushe Industrial Area in Yantian District, Shenzhen
38 Industrial Plan of Urban Renewal Unit of Lijia Industrial Area in Shenzhen
39 Industrial Plan of Urban Renewal for Vanke SDDG Program
40 Industrial Plan of Urban Renewal Program of Shijing in Pingshan District, Shenzhen
41 Industrial Development and Functional Orientation of A907-0123 Land Parcel in Guanhu Avenue, Longhua District, Shenzhen
42 Industrial Plan of Urban Renewal and Investment Attraction for Shenzhen Bus Station Area
43 Industrial Plan for Renovation Project of Bantian Niuguling Industrial Area of Kaisa Group
44 Industrial Plan for Upgrading of Longcheng Industrial Park of Kaisa Group
45 Industrial Development Orientation for Longbi Industrial Area in Longgang District, Shenzhen
46 Functional Orientation Research of Urban Renewal Program for SCC Cultural Innovation Center
47 Industrial Plan of Urban Renewal Unit of Airmate Industrial Area
48 Industrial Plan of Urban Renewal Unit of Yuesite Industrial Area
49 Industrial Plan of Urban Renewal Unit of Peihong Electronics Industrial Area

2015

1 Study on B&R Initiative and the Great Bay Area of Guangdong, HK and Macao
2 Study on Shenzhen’s Port and Shipping Cooperation along the 21st Century Maritime Silk Road
3 Study on Shenzhen-Hong Kong Customs Declaration Innovation
4 Study on Accelerating Integrated Development of Shenzhen, Dongguan and Huizhou
5 Study on Dongguan’s Integration with Guangdong’s Free Trade Zones
6 13th Five Year Plan for Shenzhen-Shantou Special Cooperation Zone
7 Industrial Plan for Shenzhen-Shantou Special Cooperation Zone (2015-2030)
8 2014 Annual Report on Construction of Key Areas in Shenzhen
9 Study on Shenzhen’s Role in Solving Hong Kong’s Youth Problems
10 Overall Plan for Dire Dawa Special Economic Zone of Ethiopia
11 Spatial Plan for Dire Dawa Special Economic Zone of Ethiopia
12 Feasibility Study on Investment in Dire Dawa Special Economic Zone of Ethiopia
13 13th Five Year Plan of Quanzhou City, Fujian Province
14 13th Five Year Plan of Shishi City, Fujian Province
15 13th Five Year Plan of the 6th Division of Xinjiang Production and Construction Corps
16 13th Five Year Plan of Nong'an County, Jilin Province
17 13th Five Year Plan of Longnan County, Jiangxi Province
18 13th Five Year Plan of Futian District, Shenzhen
19 13th Five Year Plan on Industrial Development of Luohu District, Shenzhen
20 13th Five Year Plan of Bao'an District, Shenzhen
21 13th Five Year Plan on Major Projects of Bao'an District, Shenzhen
22 Evaluation on the Implementation of 12th Five Year Plan of Bao'an District, Shenzhen
23 13th Five Year Plan of Longhua New District Administration Office, Shenzhen
24 Study on Economic Growth Trends of Longhua New District, Shenzhen
25 13th Five Year Plan of Pingshan New District, Shenzhen
26 13th Five Year Plan on Major Projects of Guangming New District Administration Office, Shenzhen
27 13th Five Year Plan of Dadukou District, Chongqing Municipality
28 13th Five Year Plan of Bishan District, Chongqing Municipality
29 Construction and Development Plan of Dashihua New District, Chongqing Municipality
30 13th Five Year Plan of High-tech Industrial Development Zone, Chongqing Municipality
31 Overall Plan of Changji New District, Jilin Province
32 13th Five Year Plan of Daya Bay Rim, Huizhou City
33 13th Five Year Plan of Jinkou Sub-District Office, Wuhan City
34 Short and Medium Term Urban and Industrial Development Strategy for Beijiao Township, Foshan City
35 Urban Renewal Plan for Badaitou Binjiang Area, Shanghai
36 Transformation and Upgrading Plan for the Eastern Area of High-Tech Zone, Chongqing
37 Urban Renewal Strategy for the Western Area of Shiwan, Foshan City
38 Investigation on Transformation of Policy Demands of Residents in Meilin Area, Futian District, Shenzhen
39 Implementation Plan for Upgrading and Transformation of Meilin Area, Futian District, Shenzhen
40 JoinCare Industrial Plan for the Urban Renewal in the Northern Part of High-Tech Zone, Shenzhen
41 Yudashun Industrial Plan for the Urban Renewal Unit in High-Tech Zone, Nanshan District, Shenzhen
42 Action Plan for the Transformation and Upgrading of Industrial Zone, Longgang, Shenzhen
43 Industrial Plan for Shenzhen Luhu Scientech Services Industrial Park
44 Industrial Plan of Urban Renewal for 01-16 Parcel of Shenzhen Luhu Scientech Services Industrial Park
45 Industrial Plan of Urban Renewal for Shenzhen Tianzhong Scientech Park
46 Industrial Plan of Urban Renewal for Silian Village, Henggang Town, Longgang District, Shenzhen
47 Industrial Plan of Urban Renewal for Baodian Area, Longgang District, Shenzhen
48 Industrial Plan of Urban Renewal for Shenzhen Buji Wholesale Vegetable Market

2014

1 Study on Shenzhen Economic and Trade Cooperation under the Framework of 21st-Century Maritime Silk Road
2 Master Plan of Changchun-Jilin-Tumenjiang North Asian Cooperation Pilot Zone
3 Strategy and Policy for Shenzhen’s Participation in Building 21st-Century Maritime Silk Road.
4 Analysis of the Impact of New Trade Rules of TPP and TTIP on Shenzhen
5 Study on Shenzhen-Hong Kong Cooperation for the Development of Gulf Economy
6 Study on Promoting Trade and Investment Liberalization and Facilitation with Gulf Economy
7 Analysis of the Impact of Hong Kong's Occupy Central Movement on Shenzhen
8 Development Strategy for Shenzhen as a Hub City along the 21st-Century Maritime Silk Road
9 Economic Development Strategy for Shenzhen during the 13th Five-Year Plan Period
10 Shenzhen Planning of New-Style Urbanization (2015-2020)
11 Study on the Innovation of Social and Economic Indicator System for the 13th Five-Year Plan
12 New-Style Urbanization Planning of Quanzhou, Fujian Province
13 2014-2020 Development Plan of Beitun City, Xinjiang Uyghur Autonomous Region
14 Development Strategy of Dongguan City, Guangdong Province in the 13th Five-Year Plan Period
15 Socio-Economic Development Goals of the 13th Five-Year Plan of Dongguan City
16 Master Plan for Changji New District, Changchun City, Jilin Province
17 Comprehensive Development Strategy for Chang’an Township, Dongguan City
18 Study on City-industry Integration of Hangzhou Bay New Zone, Ningbo City
19 Conceptual Study of the 13th Five-Year Plan of Longhua New District, Shenzhen
20 Study on Economic Growth Trend of Longhua New District, Shenzhen
21 Preliminary Study on the 13th Five-Year Plan of Pingshan New District, Shenzhen
22 Study on Economic Growth Potentials of Baoan District, Shenzhen
23 Proposal for the 13th Five-Year Planning of Futian District, Shenzhen
24 Study on Orientation and Industry Selection of Xiangmihu Area, Shenzhen
25 Industrial Plan of B301-0030 Land Parcel of 05-02 (Zhuzilin) Area in Futian District, Shenzhen
26 Urban Renewal Project of 01-03 Land Block of Caitian Industrial Park, Futian District, Shenzhen
27 Renewal of Guangtong Area, Meilin Subdistrict, Shenzhen
28 Industrial Plan of China National Pharmaceutical Group's Land Use in Bagualing Area, Shenzhen
29 Industrial Plan of Sinotrans & CSC Logistics Center in Luohu District, Shenzhen
30 Industrial Plan of the Urban Renewal Unit of Qingshuihe Area, Luohu District, Shenzhen
31 Industrial Plan of Renewal of Subunit 9 of Sungang-Qingshuihe Area, Luohu District, Shenzhen
32 Industrial Plan of Land Block of Yutaiyuan Real Estate Co., Ltd. in Qingshuihe Area, Shenzhen
33 Renewal Plan of Old Factory Area of Gaofa Hi-Tech Park, Shenzhen
34 Industrial Plan of Renewal of Honghualing Subdistrict, Longgang District, Shenzhen
35 Industrial Plan of Renewal of Jiuweixincun, Xixiang Subdistrict, Bao’an District, Shenzhen
36 Industrial Plan of Renewal of Wanfeng Community, Shajing Subdistrict, Shenzhen
37 Upgrading and Renewal Plan of Industrial Park in Songgangxitou Village, Shenzhen
38 Industrial Plan of Yousong Industrial Park in Longhua New District, Shenzhen
39 Study on Transformation and Upgrading of Community Enterprises in Dashuitian, Longhua New District, Shenzhen
40 Renewal Plan of Huafa Area, Guangming New District, Shenzhen
41 Industrial Plan of Nanmenshan Area, Guangming New District, Shenzhen
42 Renewal Plan of Shansha Industrial Park in Pinghu Subdistrict, Shenzhen

The book comprises of 15 typical cases of economic restructuring and transformation in Changsha County over the past decade.

The CFCI comprehensively evaluates 31 financial centers on the Chinese mainland, using 85 indicators in the four broad areas of financial industry performance, financial institutions’ competitiveness, financial market size and financial dynamics. Since it was first released in 2009, the CFCI has been updated annually.

The book is compiled based on the proceedings of the Silver Lake Salon meetings, under the themes of public affairs of Shenzhen and common prosperity of urban and rural areas in the urbanization process of China respectively.

The book is compiled based on the proceedings of the Silver Lake Salon meetings, under the themes of public affairs of Shenzhen and common prosperity of urban and rural areas in the urbanization process of China respectively.

The book systematically analyzes Hong Kong economy in terms of structure, growth rate, competitiveness, function, people’s livelihood, free market, policy implementation, development trends, innovation, and relationship between Hong Kong and the mainland.