China Beige Book says China economy dropped significantly in Q4, Q1 recovery unlikely

China Beige Book International (CBBI) adapts methodology used by the U.S. Federal Reserve’s “Beige Book”

• its a quarterly report
• using quantitative & qualitative data to track conditions within the Chinese economy

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The firm’s latest China Beige Book shows that China’s manufacturing, services, and real estate sectors all experienced significant declines in Q4 2022, citing Covid-19 disruptions.

• CBBI says that its indexes tracking earnings, sales, and employment at manufacturing and service companies declined in Q4 2022 compared to the prior quarter and a year earlier

• Metrics for the real estate market, such as sales and prices, fell almost to record lows
• CBBI said China’s GDP probably decreased in real terms in Q4 y/y and was up only 2% for 2022 as a whole.

CBBI comment:

• “With the ongoing Covid tidal wave, investment sliding to a 10-quarter low, and new orders continuing to get battered, a meaningful first-quarter recovery is increasingly unrealistic”