Taps Coogan – April 5th, 2022

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Leland Miller, the man who runs the largest private in-country data-collection network in China – China Beige Book International, has been notably sour on the Chinese economy for the past couple years, but in his latest interview with Bloomberg he sounded notably more dovish.

Some excerpts from Leland Miller:

“I’ve had all these things to say about downward pressure in services and retail looking bad. Property was actually an upside surprise for us (in the latest data). It looked a lot better. People see the headlines, the very high profile companies that are in terrible danger and looking like they are (at) the verge of default. Fair enough, but overall we actually saw an improving property sector this quarter. It’s the one thing people are skeptical of… but we saw significant improvement… in all of our indicators in the first quarter. The housing sector is still not looking good but overall property is looking better, but people don’t understand it because they are looking at a handful of the larger companies right now.”

“Loan demand right now at firms has been going up. It’s interesting because loan applications have been going down and down… Why are firms applying for loans less and less but reporting to us that they want to borrow more and more? Well, it’s because rates are curiously high right now, some of the highest rates we’ve seen in years. So, if the PBOC… wants to push rates down right now – has the wherewithal to push rates down – you actually have returning corporate loan demand and that could show a recovery in the Spring a lot quicker than people expect.”

There is more to the interview, so enjoy it above.

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