Nomura cuts its China GDP forecast — again

[Lava820]

• As of Tuesday, about 12% of China’s total GDP is affected by Covid controls on a weighted basis — up from 5.3% last week, Nomura’s chief China economist Ting Lu and a team said.
• Nomura cut its full-year GDP forecast to 2.7%, down from the 2.8% estimate set in August.
• Several cities including the tech hub of Shenzhen have tightened Covid controls in the last few weeks after reports of new local infections.

BEIJING — Nomura has cut its China GDP forecast again due to new Covid lockdowns.
Several cities including the tech hub of Shenzhen have tightened Covid controls in the last few weeks after reports of new local infections. Since last week, the central Chinese city of Chengdu has ordered people to stay home while authorities conduct mass virus testing.

As of Tuesday, about 12% of China’s total GDP is now affected by such Covid controls — up from 5.3% last week, Nomura’s chief China economist Ting Lu and a team said in a report. That’s according to the analysts’ new model that weights the GDP of affected areas by how stringent the measures are.
Based on that increase, Nomura cut its GDP forecast to 2.7%, down from the 2.8% estimate set in August.

We did not expect growth to worsen at such a pace.
Ting Lu
NOMURA’S CHIEF CHINA ECONOMIST

“Back [on Aug. 17], when we cut our Q3 and Q4 GDP growth forecasts, we did not expect growth to worsen at such a pace,” the analysts said.
Major investment banks have repeatedly cut their China GDP forecasts this year, especially after the metropolis of Shanghai locked down for about two months. Nomura has had the lowest forecast and has typically cut its estimates before other firms have.
Restrictions on business and social activity vary by region. While many cities such as Beijing may only require regular virus tests, other parts of the country have delayed the reopening of schools or even ordered people to stay home.

“What is becoming increasingly concerning is that Covid hotspots are continuing to shift away from several remote regions and cities – with seemingly less economic significance to the country – to provinces that matter much more to China’s national economy,” the Nomura analysts said.

They warned their new model showed the Covid impact on China’s GDP was quickly nearing levels seen during the lockdown of Shanghai in April and May. At the time, the weighted impact on GDP was just over 20%, according to Nomura’s analysis.

Nomura cuts its China GDP forecast — again

As of Tuesday, about 12% of China's GDP is affected by Covid controls on a weighted basis — up from 5.3% last week, Nomura analysts said.

www.cnbc.com

 

[Chat SAMOSA]

To be accurate, it is not Chinese GDP but rather what CCP will admit it to be.

 

[beijingwalker]

IMF projections: Chinese economy in 2027 will be 93 percent of the US​

The IMF’s World Economic Outlook says central banks should ignore the demand for a pivot and instead focus on getting inflation under control​

MANAS CHAKRAVARTY

OCTOBER 12, 2022 / 08:56 AM IST

The Chinese economy was 61 percent of the US economy in 2015 but is expected to be 81 percent of the US economy this year : Reuters​

Highlights China is already the biggest economy in purchasing power parity terms and it is increasing its lead from the US In current dollars too the Chinese economy is rapidly catching up with the US This has immense geopolitical implications That is why the US is desperate to contain the rise of China Chinese growth will continue to be investment-led US growth will falter due to the Fed’s monetary tightening While over-tightening could lead to a recession, the IMF says central banks should not pivot and instead focus on getting the inflation under control.

IMF projections: Chinese economy in 2027 will be 93 percent of the US

The IMF’s World Economic Outlook says central banks should ignore the demand for a pivot and instead focus on getting inflation under control

www.moneycontrol.com

 

[Beast]

Maybe US will suffer a recession of 5-6% while China attain a 5.5% growth. The gap will be shorten very fast.

 

[Dungeness]

IMF projections: Chinese economy in 2027 will be 93 percent of the US​

The IMF’s World Economic Outlook says central banks should ignore the demand for a pivot and instead focus on getting inflation under control​

MANAS CHAKRAVARTY

OCTOBER 12, 2022 / 08:56 AM IST

The Chinese economy was 61 percent of the US economy in 2015 but is expected to be 81 percent of the US economy this year : Reuters​

Highlights China is already the biggest economy in purchasing power parity terms and it is increasing its lead from the US In current dollars too the Chinese economy is rapidly catching up with the US This has immense geopolitical implications That is why the US is desperate to contain the rise of China Chinese growth will continue to be investment-led US growth will falter due to the Fed’s monetary tightening While over-tightening could lead to a recession, the IMF says central banks should not pivot and instead focus on getting the inflation under control.

IMF projections: Chinese economy in 2027 will be 93 percent of the US

The IMF’s World Economic Outlook says central banks should ignore the demand for a pivot and instead focus on getting inflation under control

www.moneycontrol.com

Never underestimate US' determination to stay on top. Imputed rent is already a part of US GDP, and they are now discussing the value of "unpaid housework". What's next, "Yard Sale", "Craigslist transactions", or "cash transaction of unregistered contractors", such as house painting and gardening? They will do anything to stay on top. They might even learn from India, and include cow dung into their calculation.

 

[beijingwalker]

To be accurate, it is not Chinese GDP but rather what CCP will admit it to be.

China's data was backed by total trade volumes, massive exports surpluses, industrial outputs... while India suffers enormous trade deficit every year yet still reports big GDP growth, can you explain how it worked?

 

[Mista]

Imputed rent is already a part of US GDP

Imputed GDP from owner-occupied dwellings are included in most countries' GDP, including Singapore and China. The ratio of owner-occupied to rented dwellings can vary significantly between countries and even over short periods of time within a country, so that both international and intertemporal comparisons of the production and consumption of housing services could be distorted if no imputation was made for the value of own-account housing services.

Eg; without imputation from owner-occupied dwellings, a country with higher home ownership would have lower GDP. Or a country would see their GDP drop if they built more housing for their residents to purchase. Doesn't make sense.

The difference is that different countries calculate their imputed owner-occupied GDP differently. The US with a robust rental market calculates owner-occupied GDP by benchmarking to similar dwellings that are actually being rented out, while China uses a property cost-amortized basis. Eg; all else being equal, the higher the rent the higher the GDP in the US; the higher the construction cost the higher the GDP in China.

China:

US:

Singapore:

The actual and imputed rent for ownership of dwelling as a share of GDP is around 11% for the US, 7% for China, and 3.8% for Singapore.

But it would be simplistic to just look at the figures for the US and thus conclude that their figures are more inflated than China's and Singapore's, because the quality of housing may vary between the countries. Eg; Americans generally live in houses and their housing are much more spacious/comfortable than apartments in China or Singapore.

 

[MajesticPug]

To be accurate, it is not Chinese GDP but rather what CCP will admit it to be.

Don't argue with dump (oops misspelling) Indian cyber keyboard warriors. LOL.

 

[Chat SAMOSA]

China's data was backed by total trade volumes, massive exports surpluses, industrial outputs... while India suffers enormous trade deficit every year yet still reports big GDP growth, can you explain how it worked?

When you encounter such seeming contradictions double check your premises. One or more will be wrong.

 

[nahtanbob]

China's data was backed by total trade volumes, massive exports surpluses, industrial outputs... while India suffers enormous trade deficit every year yet still reports big GDP growth, can you explain how it worked?

India's growth is driven by services and remmitances