China's
Bidding for dollars to keep the dollars out of settlement (and thus out of the PBOC/ whoever now helps the PBOC warehouse the fx bought in settlement) is one of China's oldest tricks -- 1/2
April Equity Flows Don’t Explain KRW Weakness
really enjoy the work of East Asian Econ -- I will just add that in April the equity flow (whether Koreans buying foreign equities or foreigners selling Korean equities) doesn't seem to account for KRW weakness 1/2 https://t.co/8xAF2xvq8U
Creative Policy Needed to Support Korean Won, Test US Intervention
Indeed Probably time for some creative policy making to support the won in Korea (a pause in NPS outflows is the obvious variable) and perhaps test the willingness of the US to engage in joint intervention? 1/
China’s New Export Surge Outpaces Imports, Unlike First Shock
Useful note from the Fed highlighting how China's current export led expansion differs from the first China shock -- China is bigger, China produces more advanced goods and China's trade is increasingly asymmetric (export growth but no import growth) 1/ https://t.co/8hzMVtk8Yn
European Car Output Drops Despite Rising Sales, Demand Steady
The fall in Europe's motor vehicle output since 2023 is not explained by a fall in underlying European demand -- auto sales are up, industrial production in the sector is down 10 pps 1/2
Excess US Capital Inflows Fueled Crisis Amid China’s Low‑Value Exports
I actually did worry about imbalances when China was mostly producing low value added goods -- the financial inflow into the US prior to the global financial crisis was excessive, and was among the factors (leveraged financial institutions were another)...
China’s EV Success Stems From Self‑contained Strategy, Not Rule‑following
Not sure about this diagnosis China didn't succeed in autos/ EVs by playing inside the rules (very obvious national preferences; high legacy tariffs) and the striking thing about Chinese EV production is how self contained it is ... https://t.co/Kcke0msSTo
China’s Auto Policy Leans on Tariffs and Subsidies
Worth remembering that tariffs (25% in autos for a very long time) and national preference (subsidies only to Chinese made EVs with Chinese made batteries) were a big part of China's industrial policy tool kit --
China’s Auto Market Exports Surge While Imports Plunge
German firms do make EVs too -- and Tesla's German factory could export to China if China's currency was more fairly valued. But the core "macro" issue is that China exports but doesn't import -- import volumes are declining in the...
Trade Wars Yield No Winners, Export Bans Backfire
Excellent essay from Soumaya Keynes in the weekend FT "You can see why the line “no one wins a trade war” is so appealing. It’s basically correct. Export restrictions are cumbersome weapons, with unpredictable effects that can easily spiral out of...
Emerging Chemical Dependency Mirrors Chinese Rare‑earth Risk
Striking. Suspect there is a growing risk of dependency in certain chemicals that generates the same supply chain dependencies that developed from Chinese dominance of rare earth processing.
European Car Makers Boost Output in China, Shipments Surge 61%
"Momentum is increasing. Shipments for the first four months of 2026 stood at 3.1mn cars, up 61 per cent on the same period a year earlier." Great piece in the FT -- Would have called it "the growing Chinese production base of...
China Counters German Engineering Surplus with Aggressive Industrial Policy
China didn't respond to Germany's "engineering" surplus by sitting on its hands -- it had a rather active industrial policy to substitute Chinese production for German imports (including by buying and digesting Kuka), and now it turbocharges its exports with...
Europe Must Choose: Keep Auto Industry or Shift to China
Europe needs to decide whether it wants its auto industry to migrate to China or not -- almost that simple 1/2
China May Soon Fulfill Global EV Demand
If there is one thing that I hope European policy makers internalize it is that China's auto export wave picked up steam in the late 25 and early 26 -- and with Chinese internal demand for EVs cresting, China could...