Catch Up On The Latest Chinese News With These Seven Bullets

With China offline for the next seven days as its celebrates its Lunar New Year, here are 7 bullets from Evercore ISI to get everyone up to speed on the latest developments in the world’s most troubled “growth” economy.

Evercore ISI China Weekly Summary

No one can remember (and we can’t think up) more than 7 bullets on anything.  Here, this week’s top China 7.

• Lunar New Year, Feb 7 – 13.  All markets, business and gov’t closed the entire week.  There will be little news.  All on vacation; many headed home.  Jan-Feb data are always fouled up.    
• Beijing says 6.5 – 7.0% is the 2016 Real GDP growth target.  In China — targets ‘set’ are targets ‘met.’  But actual economic growth this rapid — implausible to us.     
• We have seen a giant rise recently in cheerleading stories in China’s media by many officials – claiming all is OK in the economy, finance and currency.  This is jawboning up confidence.  Not convincing to anyone.      
• China’s domestic equity markets remain broken.  Friday close 2763 — down 21.9% YTD; down 46.5% since Jun 2015 peak of (5166).  The State is in charge; not investors.            
• The Chinese citizenry can’t find enough attractive destinations for their savings.  So, creative new instruments are arriving just in time to fill the vacuum in an environment of — doubtful regulation, unsophisticated investors, a weak economy and a leadership elite with little ‘appreciation of’ or ‘experience with’ market forces.   
• CNY is still on a downward path, albeit with interruptions.  We are using 6.80/USD year-end 2016; now 6.53/USD.  Forex Reserves Jan, down $99 bln, vs. Dec, down $108 bln.  We are not alarmed.        
• New housing stimulus this last week.  A five percentage point reduction in minimum down-payment for both first home and second home buyers.  Small help.