• Like

China supporting growth without reviving bubbles - Presented at www.minesandmoney.com

  • 298 views
Uploaded on

China supporting growth without reviving bubbles …

China supporting growth without reviving bubbles

Hard or soft landing? Assessing the facts and exploding the myths
Examining future demand for key commodities: Iron ore, copper and coal
Exploring the growth of a consumer-led economy in China
Why are there such wide-ranging views on China's outlook?

by Jing Ulrich, JP Morgan

More in: Business , Technology
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
298
On Slideshare
0
From Embeds
0
Number of Embeds
1

Actions

Shares
Downloads
16
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. March 2012China: Supporting Growth Without Reviving BubblesJing Ulrich Amir Hoosain Ling ZouManaging Director & Chairman (852) 2800 8641 (852) 2800 8962of Global Markets, China amir.h.hoosain@jpmorgan.com johnny.l.zou@jpmorgan.com(852) 2800 8635jing.l.ulrich@jpmorgan.com
  • 2. Export slowdown increases the need to boost consumption Contribution to China’s GDP Growth (%) Contribution to China’s GDP Growth (%) 10 8 Gross Capital Formation 6 4 Consumption 2China: Supporting Growth Without Reviving Bubbles 0 Net Exports -2 -4 2005 2006 2007 2008 2009 2010 2011 1
  • 3. Rate of fixed asset investment growth will slow in 2012 Fixed Asset InvestmentChina: Supporting Growth Without Reviving Bubbles Manufacturing Real Estate Transportation 34% of FAI 20% of FAI 9% of FAI 2
  • 4. China’s likely policy approach in 2012 Monetary Easing Income Tax Reform GrowthChina: Supporting Growth Without Reviving Bubbles Support of Spending Consumption Smaller Boost in Incentives Enterprises Strategic Areas 3
  • 5. Loan growth below expectations in Jan/Feb 2012 Loan growth: RMB and foreign currencies (YoY%) Loan growth: RMB and foreign currencies (YoY%) 40% 2006 2009 2012 35% 30% 25% 20%China: Supporting Growth Without Reviving Bubbles 15% 10% 5% 0% May-06 May-07 May-08 May-09 May-10 May-11 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 4
  • 6. More RRR cuts needed to support growth Reserve requirement ratio (%) Reserve requirement ratio (%) 24 22 20.5% 20 18 Large banks 18.5% 16 14China: Supporting Growth Without Reviving Bubbles 12 Small & medium banks 10 2005 8 6 4 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 5
  • 7. Tax reforms to play a more prominent role on the policy agenda Personal VAT Income Tax ReformChina: Supporting Growth Without Reviving Bubbles Consumption Resource tax tax 6
  • 8. Growth in floor space starts slowed sharply in 2H11 Monthly residential floor space starts (YoY%) Monthly residential floor space starts (YoY%) 100% 80% 60% 40% 20%China: Supporting Growth Without Reviving Bubbles 0% -20% -40% Jan-10 Jan-11 Jan-12 7
  • 9. China overtook Japan as the world’s top coal importer in 2011 China’s coal net imports since 2005 (million tons) China’s coal net imports since 2005 (million tons) 200 150 100 50China: Supporting Growth Without Reviving Bubbles +23.2% YoY 0 -50 2005 2006 2007 2008 2009 2010 2011 2012 Jan 8
  • 10. Copper imports dropped in 2011, but rose 46.2% YoY in Jan-Feb 2012 China’s copper imports since 2005 (million tons) China’s copper imports since 2005 (million tons) 5.0 4.5 4.0 3.5 3.0 2.5 2.0China: Supporting Growth Without Reviving Bubbles 1.5 +46.2% YoY 1.0 0.5 0.0 2005 2006 2007 2008 2009 2010 2011 2012 Jan-Feb Source: Bloomberg 9
  • 11. Iron ore imports rose 5.5% YoY China’s iron ore imports since 2004 (million tons) China’s iron ore imports since 2004 (million tons) 800 700 600 500 400China: Supporting Growth Without Reviving Bubbles 300 200 +5.5% YoY 100 0 2005 2006 2007 2008 2009 2010 2011 2012 Jan-Feb 10
  • 12. J.P. Morgan is a marketing name for investment banking businesses of JPMorgan Chase & Co. and its subsidiaries worldwide. JPMorgan Chase & Co. or any of its affiliates (collectively, "J.P. Morgan") makes no representation or warranty regarding the accuracy or completeness of the information herein. J.P. Morgan is not an advisor to any person in respect of any referenced transaction.China: Supporting Growth Without Reviving Bubbles This material is not the product of J.P. Morgans research departments and along with any associated verbal presentation (together the “Presentation”) is purely indicative and is based on current assumptions and market conditions. Although information contained herein has been obtained from sources which we believe to be reliable, none of J.P. Morgan, nor any person acting on their behalf, makes any representation or warranty, implied or express regarding the accuracy or completeness of the information contained herein. The Presentation is not intended as an offer or solicitation for the purchase or sale of any financial instrument, nor does it constitute a commitment by J.P. Morgan to enter into any transaction referred to in the Presentation. J.P. Morgan shall incur no responsibility or liability whatsoever to the client or to any other person in respect of the Presentation and in the event that J.P. Morgan enters into any transaction described in the Presentation then such transaction shall be governed exclusively by the relevant transaction documents. The recipient must make an independent assessment of any legal, credit, tax, regulatory and accounting issues and determine with its own professional advisors any suitability or appropriateness implications of any transaction referenced herein in the context of its particular circumstances. J.P. Morgan assumes no responsibility or liability whatsoever to any person in respect of such matters. This material is directed exclusively at market professionals and institutional investors and is not for distribution in any jurisdiction where such distribution contravenes applicable laws of any relevant jurisdiction, nor could it be distributed to any other person or replicated in any form without the prior written consent of J.P. Morgan. Notwithstanding any prior written consent provided by J.P. Morgan for the further distribution or replication of these materials and as consideration therefore, the initial recipient of these materials acknowledges to J.P. Morgan that it shall hold J.P. Morgan harmless for the consequences of such further distribution or replication (as the case may be). Copyright 2012 JPMorgan Chase & Co. All rights reserved. Additional information is available upon request. 11
  • 13. March 2012China: Supporting Growth Without Reviving Bubbles China: Supporting Growth Without Reviving BubblesJing Ulrich Amir Hoosain Ling ZouManaging Director & Chairman (852) 2800 8641 (852) 2800 8962of Global Markets, China amir.h.hoosain@jpmorgan.com johnny.l.zou@jpmorgan.com(852) 2800 8635 12jing.l.ulrich@jpmorgan.com