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nuridervis tarafından yazılmış tüm yazılar

Çin Ekonomisi 2017 Yılına İyi Başladı.

Çin’de büyüme ilk çeyrekte %6,9 ile son 1,5 yılın en yüksek seviyesinde gerçekleşti. Bu rakam piyasa beklentilerinin üzerinde, bizim ise üşengeçlikten daha önce yazmadığımız beklentimizle tam uyumlu gerçekleşti. PMI’nın son aylardaki seyri ve özel sektör yatırımlarındaki canlanmanın yanı sıra Mart ayındaki güçlü dış ticaret verileri sonrasında tam da bu rakam aklımıza gelmişti.

Büyümenin ayrıntılarına bakıldığı zaman son yıllarda ekonominin yükünü sırtlayan hizmet sektörünün bir miktar yavaşladığını ancak firmaların yeniden stoklarını artırmaya başlamasıyla sanayi sektörünün hızlandığını görüyoruz. Tüketim tarafında ise özel sektör yatırımlarında daha önce tahmin ettiğimiz ancak bizim beklentimizden bile daha hızlı gerçekleşen bir artış dikkat çekiyor. Sonuçta, hem stokların hem de sabit yatırımların gösterdiği şekilde özel sektör canlanıyor ve iç veya dış kaynaklı ciddi bir şokla karşılaşmadığı sürece Çin ekonomisinin 2017 yılının tamamı için hükümetin koymuş olduğu %6,5 civarı büyüme hedefini şimdiden garantilediğini söyleyebiliriz.

Piyasa yorumları, büyümenin ilk çeyrekte zirve yaptığı ve hükümetin konut sektörünü yeniden sıkması başta olmak üzere çeşitli sebeplerle önümüzdeki aylarda ekonominin yeniden yavaşlayacağı yönünde. Buna rağmen, 2017 ve 2018 büyüme tahminleri şimden 20-30 baz puan yükseltilmeye başladı bile…

Aslında son bir haftada açıklanan ekonomik veriler, büyümedeki ivmenin en azından ikinci çeyrekte de devam edeceğine işaret ediyor. Sanayi üretimi  yılın ilk iki ayında daha ılımlı ilerledikten sonra Mart ayında hız kazanıyor. Benzer şekilde perakende satışlar yoluyla takip ettiğimiz tüketim harcamaları da Mart ayında hızlanmış durumda. Ancak bizce en önemlisi yukarıda da belirttiğimiz şekilde, özel sektörün üzerindeki ölü toprağını atarak yeniden yatırım yapmaya başlaması. ÜFE’deki yükseliş sayesinde artık borçlarını nominal olarak eritebilme şansını elde eden özel sektör, bu fırsatı son yıllarda ertelemekte oldukları yatırımlara yeniden başlayarak değerlendiriyor.

ÜFE demişken, Ağustos ayından bu yana baz etkisi ve ham madde fiyatlarındaki yükselişle deyim yerindeyse “roketleyen” üretici fiyatları Mart ayında beklediğimiz şekilde yumuşamaya başladı. TÜFE enflasyonu da Şubat ayında kaydetmiş olduğu anormal düşüşün ardından bir miktar toparlandı, ancak ÜFE’nin “tüketim malları” alt kalemi ile TÜFE arasında süregelen sıkı ilişkideki kopma Mart ayında da sürüyor. Bu konuyu önümüzdeki aylarda da takip edeceğiz.

Büyüme dinamikleri bizim beklediğimiz şekilde gitse de özellikle tüketici enflasyonundaki yumuşaklık, bu yıl için faiz artırımı beklentilerimizi tehlikeye atmaya başladı. Şimdilik görünen o ki Merkez Bankası (PBOC), bu yılın geri kalanında para politikasını gösterge faizleri yükseltmeden sadece likidite araçları yoluyla yönetmeyi sürdürebilecek. Döviz rezervlerinin uzun düşüşünü son iki ayda sona erdirmesi ve ABD Hazine Bakanlığı’nın bir kez daha Çin’i “kur manipülatörü” olarak nitelendirmekten kaçınması da faizleri artırmama konusunda PBOC’nin elini rahatlacaktır.

Özel sektörün yatırımlarının büyüme için önemli katkı yapmaya başlaması, aslında hükümete maliye politikasında daha kontrollü bir gevşeme, KİT reformları ve yüksek borç oranlarıyla mücadele açısından da bir avantaj sağlıyor. Ancak, Ekim ayındaki çok önemli Komünist Parti Kongresi öncesinde hükümetin ekonomiyi rayından çıkarma riski içerecek en küçük bir adımdan bile kaçınacağını düşünüyoruz. Böyle adımlar için ekonominin en azından ikinci çeyrekte de yeniden kendi ayakları üzerinde durabildiği tatminkar bir performans göstermesi beklenecektir.

A Nowcasting Exercise for Emerging Markets

We have expressed our love in PMI data before. Today, we will try to employ it in our nowcasting exercise, which we will try to estimate current growth in emerging markets (EM’s). 

We start with calculating a composite GDP growth rate and PMI for 13 selected EM’s(*), taking the PPP GDP weighted average of individual countries. Next we use the quarterly average of composite PMI as the explanatory variable in an OLS model, with EM GDP growth at the left side. The results confirm the high correlation (0.85) between two series. Here, we want to note that a composite PMI we had calculated for Advanced Economies has failed to stay in the model, until its’ fourth lag. 

Our estimates show that EM economies has continued to pick up during the first quarter, with estimated GDP growth increasing to 5,1%, compared to 4,9% in 4Q2016. This is in tandem with the facts that the signs of recovery in China spilling over to other Asian economies and commodity exporters. Furthermore, Brazil and especially Russia is crawling out of recession. Finally, considering that we were yet to see the effects of Trumponomics, as well as the pick-up in EU and Japan, it is not hard to expect a good 2017 for EM economies. 

We will continue to nowcast EM growth in the coming months, while we try to further develop our model, in the coming months. 

(*): China, India, Indonesia, S. Korea, Taiwan, Brazil, Mexico, Hungary, Poland, Czechia, Russia, Turkey and S. Africa. These countries make up %75 of the whole EM economies. We have used the averages of two seperate PMI data, which are announced for each of China, Mexico and S. Africa.

Bir Kelime, Bir İşlem: Gelişmekte Olan Ülkeler İçin Bir Büyüme Tahmini

PMI verisine olan hayranlığımızı daha önce çeşitli kereler ifade etmiştik. Bu defa da gelişmekte olan ülkelerde (GOÜ) mevcut büyüme hızını tahmin etmek için PMI verilerinden başlayan bir egzersiz yapıyoruz. 

Son yıllarda ekonomi camiasında giderek yaygınlaşan ve yüksek frekanslı verilerle büyüme tahmini yapma işine ‘nowcasting’ adı veriliyor. Biz de devam etmeden önce buna Türkçe karşılık olarak da ‘angörü’ kelimesini öneriyoruz.

Angörü denememiz için 13* gelişmekte olan ülkeye ait imalat sanayi PMI verilerini Satın Alma Gücü Paritesine göre GSYİH kullanarak ağırlıklandırıp GOÜ PMI verisini oluşturuyoruz. Bu verinin çeyreklik ortalamasını aynı şekilde oluşturduğumuz yıllık % büyüme hızıyla eşleştirdiğimiz zaman 0,85 gibi yüksek bir korelasyon katsayısıyla karşılaşıyoruz.

OLS kullanarak oluşturduğumuz basit tahmin de bu korelasyonu teyit edecek ölçüde başarılı. Burada, yukarıdakine benzer yöntemle hesapladığımız gelişmiş ülkelere ait bileşik PMI verisinin dört çeyreklik gecikmeye kadar modelde kalmayı başaramadığını da not etmek gerek.

Elde ettiğimiz sonuca göre GOÜ’de 2016 yılının son çeyreğinde başlayan hızlanma 2017’nin ilk üç ayında da devam ediyor ve %4,9 olan büyüme hızı %5,1’e yükseliyor. Bu tahminimizin gerçekleşmesi hâlinde GOÜ’de büyüme 2,5 yıl aradan sonra ilk defa %5’i aşmış olacak. Özellikle Çin’de görülen canlanma işaretlerinin Asya-Pasifik ve emtia ihracatçısı diğer GOÜ’lere yansıdığına dair giderek artan yorumlar düşünülürse bu pek de şaşırtıcı değil. Ayrıca Brezilya ve özellikle Rusya da resesyon dönemlerini yavaş yavaş geride bırakıyor. Trumponomics’in etkilerinin henüz görülmediğini ve AB ile Japonya’da görülmeye başlanan olumlu gelişmeler de göz önüne alındığı zaman 2017’nin GOÜ için iyi geçeceğini öngörmek zor değil. 

Önümüzdeki dönemde angörülerimizi aylık olarak değerlendirmeye ve geliştirmeye devam edeceğiz. 

*: Çin, Hindistan, G. Kore, Tayvan, Endonezya, Brezilya,  Meksika, Çekya, Polonya, Macaristan, Rusya, G. Afrika ve Türkiye’den oluşan bu grup bütün gelişmekte olan ülkelerin %75’ini kapsamaktadır. Çin, Meksika ve G. Afrika’da çeşitli kaynaklarca yayınlanan ikişer PMI verisinin basit ortalamalarını kullandık. 

How to Save Capitalism: Treat Employees Better – Part 2

Recently, we had the chance to chat with a group of university students, who were going to earn their graduate degrees this summer. We were already interested in the different approach of younger generations to work and life, so we asked whether they would want to work one more hour, each day, to get a 10% more paycheck. Not surprisingly, only 3 out of 10 youngsters preferred that option. We even heard one of them mumbling ‘I have a life’. 

As of 2015, millenials (not to say ‘millenials and GenerationZ’ over and over again, we will combine them as millenials) are the largest generation in US workforce and by 2020 they will make up 50% of global total. This is a new generation, which differs from older ones in many aspects, like being a global citizen (at least online). We put great importance to this, because we think that even the wildest and wisest futurologists couldn’t have thought how internet and its’ offsprings, like smart phones and social media, changed and shaped the world. For us, the biggest change that we owe to internet might be the increased access to ALTERNATIVES, which we believe is the main factor shaping millenials’ approach to their careers and lives. 

There are lots of good articles, like this or this, about the millenials and how their approach to working differs from earlier generations. We do not want to fully repeat their ideas, but only to summarize some important findings and try to connect them with our emphasis on alternatives. 

First of all, although we have argued that corporates should pay workers more in Part-1, the millenials can not be easily tempted by money, as we have shown by our little survey above. There is a growing number of research concluding that flexbility is the top priority for millenial employees, even surpassing health benefits. Ever increasing number of employees want the chance of working flexibly, sometimes from their homes. This statement we’ve read somewhere strikingly sunmarizes the idea; ‘if you don’t trust me that I could be successful working flexibly, why did you hire me in the first place?’. In fact, flexible employees can also benefit the corporates, in terms of lower office costs. 

Employee friendly working environment is as important as flexiblity. More often than not, order generations fail to notice that we spend most of our lives in the workplace, more than our time with families or friends. Millenials seem to be better aware of this fact and they ask for more employee-friendly work environment. They see what working at Google is like and they dream of similar jobs. 

Next, millenials care for personal involvement and development in their jobs and they are not afraid of quitting, if they do not find a meaningful purpose or a goal. Research suggest that the average duration, which the millenials change jobs is only two years, compared to seven years for the baby boomers. Millenials also care for seeing the contribution they make to their jobs and, from a wider perspective, to the society and the world. 

Last but not least, the millenials want to get feedback for their work and they want it very fast. This is not surprising, if we consider the importance of being ‘Liked’ in almost every social media platform. We can add here the fact that the millenials prefer to see a leader rather than a boss. Another good expression we’ve come across about the millenials approach to their careers was; ‘They want to work WITH you, rather than work FOR you’. 

How to tie all together?

The baby boomers lived in an era during which their countries was trying to get back on their feet again, after a devastating first half of the 20th century. Thus, we believe their (subconscious) attitude was to ‘rise together’. Furthermore, they did not have the communication opportunities of todays’ generations, so they were less aware of what was going on out of their world. 

The millenials, on the other hand, are living in a relatively more stable world. The baby boomers have done a great job in creating a generally solid economic foundation for them. They figuratively have created a machine, which can operate as a whole, independent from its’ parts. Consequently, todays’ newer generations can think more about their personal well-being, without giving much thought about the overall system. Hence, the ‘individualist’ youngsters, as they hate being labelled as ‘selfish’ or even ‘narcissistic’. 

Furthermore, not only millenials but anyone, can literally reach anything they want today, using internet. They know more about the world, other people, other cities and other countries. They can see what good or harm their (or firms’) actions were doing on others. They have access to lots of different life-styles, societies or leisure options. Most of all, they can look for better jobs for them, even while they are sitting in their offices. Hence, the ALTERNATIVES.! Todays’ employees, and people in general, have much more alternatives than older generations, or at least they like to think so. They feel that they did not have to sell their souls to company store anymore.

After a long story that had to be divided in two, we can sum up our thoughts about how capitalism should change, in order to continue to dominate the world. The corporates should pay more attention to employees overall well-being. More inclusive and responsive governance, increased flexibility, happier offices and more space for work-life balance are the keywords. We believe that todays’ employee generation will be the last to work 9-5 hours. Of course, a more equal share of wealth would never hurt. 

İpek Yolu’nun İki Ucu Yine Birleşti

Daha önce İpek Yolu’nun iki ucundaki Türkiye (TCMB) ve Çin Merkez Bankaları’nın (PBOC) benzer para politikaları benimsediğini yazmıştık. Bugün de hem TCMB hem de PBOC, FED’in dün akşam almış olduğu faiz artırım kararına benzer şekilde cevap verdi; politika faizlerini yükseltmeden likidite koşullarını sıkılaştırmak. Daha doğrusu TCMB şimdilik sadece bunu yapmak için kendisine manevra alanı yarattı. 

TCMB’yi burada bırakıp yolumuza sitemizin esas çatısı olan Çin’le devam ediyoruz. Henüz birkaç gün önce yazdığımız  yazıda, Çin’de giderek düzelen büyüme görünümünün politika yapıcılara, ekonomik risklerle mücadele etmek için gerekli alanı yarattığını yazmıştık. PBOC de yılbaşından bu yana iki defa atmış olduğu adımı bir kez daha tekrarladı ve Açık Piyasa İşlemleri yoluyla mali sisteme likidite sağladığı kısa ve orta vadeli araçların faiz oranlarını 10’ar bp yükseltti.

Kendileri bu kararın piyasa şartlarına cevaben alındığı ve bunun politika faizlerinde bir artış olarak algılanmaması gerektiğini açıkladı. Bunun Türkçe meali; FED’in faiz artırımı sonrası, yeni yeni toparlanmaya başlamış yuanın yeniden düşüş baskısı altına girmesi ve sermaye çıkışlarının yeniden hızlanması tercih edilmiyor. Analistler ayrıca, PBOC’nin son verilere göre canlanma işareti veren emlak sektörü başta olmak üzere finansal riskleri kontrol altına almak istediğini ifade ediyorlar. 

Görünen o ki PBOC, büyüme ve enflasyonun mevcut uysal seyri bozulana kadar temel kredi/mevduat faizleri yerine mali sisteme yönelik sıkılaşma adımlarını tercih etmeyi sürdürecek. Bu süreç ayrıca Merkez Bankası’nın modern anlamda kurmaya çalıştığı parasal aktarım mekanizması için de bir laboratuar görevi görüyor. 

The Sun is About to Rise on China

For China-watchers, the first half of March is always exciting. It starts with National People’s Congress, during which the government announces its’ economic targets. After that, we get the picture for the first two months of the year, as January-February figures for industrial production, retail sales and fixed asset investment are released. We want to analyze these, with other economic data as a whole. However, before we move on, we want to emphasize that most of the Chinese economic data for the first two months of the year could be misleading, due to distortion effects of the Chinese New Year holiday. 

The growth target for 2017, pronounced as ‘6,5% and higher if possible’, sets the tone for 2017 policies. The government also have increased its’ budget deficit target. This means, the fiscal stimulus will support economic growth to reach governments’ target, in the year of the key Communist Party Meeting. However, the economy might not need heavy stimulus, if the positive trend in the first two months of 2017 continues. On the other hand, lower in M2 money supply growth target means tighter monetary policy, as we have seen recently. 

Almost all economic data for the first two months of 2017 painted a better picture for Chinese economy, except year-on-year growth in retail sales, which was 1,4 % points lower than December 2016 figure. However we don’t put much importance in this unexpected slowdown, since we think it was partly due to the sharp decrease in inflation, as retail sales are announced in nominal terms. 

Moving on to inflation, the fast increase in producer prices during Febduary, was mostly due to base effect (6,4 points of 7,8% yoy), which will gradually vanish in the coming months. Nevertheless, we start to observe that the firms were starting reflect higher costs in their prices. That’s why, we mostly ignore the unexpected fall of consumer inflation, as it is at odds with the strongly correlated PPI’s “Consumption goods” sub-item. The official explanation is ‘cold weather and lower food prices’, but we simply think the Lunar New Year struck again, until we see the inflation figures for March. 

When we wrote about our 2017 expectations, we have argued that the positive surprise in terms of growth would come from private investment. However, the speed it arrives is beating our expectations so far, led by property investment. The recovery in private investment and economic activity would support growth and lead to a wider space for policy makers, enabling them to focus on risk control and structural reforms. 

Looking at external indicators, the eye-popping growth in imports was cheered around the world, while exports have dissappointed. Once again, we remember the effects of Lunar New and, thus, prefer looking at smoothed data, which looks good. Meanwhile, the FX reserves have stopped falling in February, reflecting the effect of capital controls. 

Tying all together, we think the silver-lining in Chinese economic outlook is slowly turning into a sun-rise. Looking at all economic data as a whole, we think China will grow around 6,6-6,8%, in 2017. The improving outlook also confirms our view and opens the space for the People’s Bank of China to start rate hikes, sooner than our initial expectation. Depending on inflation outlook, we now expect the first rate hike anytime after mid-July, when second quarter GDP growth will be announced. Of course, if inflation stays under control, PBOC can opt for tightening liquidty conditions, as it did in early February.

How to Save Capitalism: Treat Employees Better – Part 1

Several months ago, a friend had argued that, after the collapse of communism as an anti-thesis, capitalism had no reason to favor the labor force anymore. We don’t know whether he was the original owner of this idea or he had read it somewhere. Nevertheless, given the increasing inequality and rising populist waves around the world, this was a striking argument and clearly worth thinking about it. 

We have previously written about the inequality debate in this years’ Davos WEF meetings. At that time, we have argued that the current corporate governance system, which awards the high-level management, sometimes at the expense of regular employees, could be the key cause of the problem. Today we will further explore the subject, in light of economic data. 

We will employ the US data here for several reasons: (1) the extent of data, which is like the Disneyland(*) for economists, (2) the facts that US being kind of synonymous with capitalism and (3) that Mr. Trump’s victory being the current and hardly contestable pinnacle of populism. 

All the figures below are annual data in current dollars, unless noted otherwise. We have indexed them as 1965=100, in order to eliminate the differences in scales. 

The first two graphs compare the growth rates of overall vs. per capita GDP. The left-side shows that overall economic growth had outpaced the increase in GDP per capita, during the past 50 years. Furthermore, the divergence seems to have picked up speed during 1980’s, the decade during which USSR was collapsing(**) However the left side suggests that the difference in growth rates of two series were continuously declining through past 50 years (***). This may be due to declining growth in population, as the denominator of per capita GDP.  However, these pictures are yet far from giving us a convincing evidence about our question at hand. 

Next, we try to understand whether the corporate sector was indeed not favoring the employees since 1990’s. First we compare the development of corporate profits against overall economic growth. Here, we can see that corporate profits have started to outpace GDP growth since late 1980’s and then sky-rocketted since early 2000’s.

Such a great increase in corporate profits should not be a bad thing for any country, as long as it is distributed fairly (not necessarily equally). Let’s see if it is the case for the US. 

The next graph plots the past 50 years of corporate profits vs. compensation of employees. The picture is quite similar to what we have seen above. Corporate profits grow higher than compensation since 1985 with an almost uninterrupted increase in difference. Here, we should note that the compensation of employees in the National Accounts includes all employees, i.e. CEO’s, as well as regular workers.

The only disruptions in the break-neck speed of corporate profit growth during the past 35+ years, were crisis periods. We can count the China’s accession in the WTO, at least as a factor that contributed to the resumption of the trend in 2000’s, if not the leading cause. 

The corporate growth trend since late 80’s did not seem to lead new jobs either. The graph below, shows that neither of these show an upwards break, similar to corporate profits, during the period we analyze. In fact, second order polynomial trend show that job creation is slowly decreasing, while number of firms seems to fare better. 

To summarize, we see a clear break in wealth distribution structure in the US, since mid-80’s. This break is also reflected in the shares of different income strata within the economy. The lower 60% of the economy is clearly and continuously losing ground against the upper 40% (****) . Consequently, the Gini Index shows a sudden shift in 1990, which is confirmed by Chow break test we have run on the linear trend. 

Of course, we would never argue that the structural break in the corporate profit growth, since 1990’s, was only due to the fall of communism. The past 30 years have seen big transformations in the global economy; globalization, technological advance, the rise of China and productivity gains being among the first ones that come to mind. Nevertheless, the timing of the take off in corporate profit growth is quite note-worthy, even it is a mere coincidence. Whatever the reasons are, there is a certain break.

All-in-all, the low and middle income class were unhappy about the current establishment and income distribution, so they have elected Mr. Trump the challenge it. Rulers of the corporate world, which did not voluntarily share the wealth with lower levels of income until now, are already feeling the arm-twisting from Mr. Trump. We will curiously monitor what will be the turn of events, in the coming months and years. 

The better income distribution is only one part of our argument that capitalism should treat better to employees, in order to survive. We will talk about the changing worker profile and their different motives in Part-2: Watch out, the millenials are here…!

(*): Being in Disneyland can be both great and painful. Children can be easily confused about which parts to visit, in their limited time. Similarly, dealing this much data contains the risk of not looking every available indicator, thus maybe being led to false conclusions. 

(**): Although USSR has officially ended in 26 December 1991, setting the date of the collapse in one particular year would not be the best choice. Today, historians prefer different intervals, which cover at least between 1985-1991. Thus, we generally look for a structural break in US data between 1980-91, rather than only 1991. 

(***): The GDP-income difference seems to have stalled decreasing during 1980’s. This is particularly interesting, since this was the period of Reaganomics, which is today being likened to economic plans of Mr. Trump. 

(****): One can argue that the wealth of American people can not only be measured by wages or total compensation, given the countless investment opportunities and capital gains. Having lived in the US for two years, we can comfortably say that higher levels of income were the ones, who mostly enjoyed those opportunities. Anyways, we all know how it ended in 2008, after the years that lower levels of income were increasingly included in Wall Street gimmicks. 

Şubat Ayı PMI Verileri Üzerine Düşünceler

Çin ekonomisine ilişkin 2017 beklentilerimizi paylaştığımız yazımızda, Merkez Bankası’nın (PBOC) beklenen faiz artırımlarına başlamak için, büyüme hızının hükümet hedefine ulaşacağından emin olmak isteyeceğini ve ilk faiz artırımının 3. çeyrek sonundan önce gelmeyeceğini savunmuştuk. Şubat ayı PMI verileri bu tahminimizi yeniden gözden geçirmemize neden oldu. 

Hem resmî hem de özel sektör PMI verileri (*) Şubat ayı da piyasa beklentilerinin üzerinde gerçekleşti. Özellikle Markit’in yayınladığı özel PMI verisinin 2010 yılından bu yana en uzun kesintisiz genişleme dönemine işaret etmesi dikkat çekici. Bu veriler, son haftalarda okuduğumuz ve Çin ekonomisinin son birkaç yıldır içinde olduğu ‘L şekilli’ yavaşlamanın sonuna geldiğimizi ileri süren yazıları da teyit eder nitelikte. 

Çin’de büyüme iyiye gidiyor gibi, peki PBOC faiz artırımlarını erkene çekebilir mi? Bunun cevabı enflasyon görünümünde saklı. Enflasyon denince akla gelen temel göstergeler olan ÜFE ve TÜFE’de resim henüz tamamıyla netleşmiş değil. Ocak ayında ÜFE yıllık %6,9 ile son yılların en yüksek seviyesine ulaşsa da bu rakamın 6,1 puanlık kısmının baz etkisinden kaynaklandığı açıklandı ve hemen herkes bu sert yükselişin önümüzdeki aylarda sona ereceği görüşünde. TÜFE’de ise yukarı yönlü sinsi bir hareket görülse de enflasyon oranı, hükümetin birkaç gün içinde 2017 yılının tamamı için açıklayacağını tahmin ettiğimiz %3’lük hedefin altında. 

Ancak emtia fiyatlarındaki yükseliş ve önümüzdeki dönem için artan enflasyonist baskılar Çin için giderek daha geniş kabul gören gerçekler. Biz de özellikle şirketlerin fiyat baskılarını tüketiciye ne derece yansıtabildiğini analiz etmek için resmî PMI verilerinin alt kalemlere bakıyoruz. 

Emtia fiyatlarındaki yükseliş, imalat sanayi PMI’nın ‘satın alınan hammadde fiyatları’ alt endeksinde kendisini açıkça belli ediyor. Ancak henüz bir yıllık mazisi olan ‘üretici fiyatları’ alt endeksindeki yükselişler henüz aynı hızda değil. Maalesef bu seri çok yeni olduğu için imalat sanayinde maliyetlerin fiyatlara yansıması konusunda tarihsel bir ilişki aramak mümkün olmuyor. 

İmalat dışı sektörlere ait PMI verilerinde ise bu handikaptan kurtuluyoruz. İnşaat ve hizmet sektörlerini kapsayan bu verinin maliyetleri ölçen alt endeksi 2016 başından; nihaî fiyatları ölçen alt endeksi ise 2016’nın ikinci yarısından bu yana giderek artan bir hızda yükselmeye başlamış durumda (hatırlatma: PMI verilerinin ölçtüğü değişkenin arttığını söylemek için endeksin 50’nin üzerine geçmesi gerekiyor). 

Sonuç olarak, ekonomi giderek daha güçlü istikrar işaretleri veriyor ve enflasyonda bir hareketlenmenin ilk işaretleri görülüyor. Bunlara bağlı olarak daha önce 3. çeyreğin sonundan itibaren beklediğimiz ilk faiz artırımının birkaç ay daha erken gelme ihtimalinin arttığı düşüncesindeyiz. Önümüzdeki iki hafta boyunca açıklanacak olan hükümetin 2017 büyüme hedefi ve Ocak-Şubat ekonomik verilerinin ardından bu konuya tekrar döneriz. 

(*): Çin’de açıklanan resmî ve özel PMI verilerinin benzerlikleri ve farkları üzerine yazımıza buradan ulaşabilirsiniz.

Similar Monetary Measures at Both Ends of the Silk Road

The land route of the ancient Silk Road starts from eastern China and ends at the Mediterranean shores of the Asia Minor. Going as early as 2nd century BC, today it is largely a romantic story for us, with its’ economic and cultural significance generally overlooked. China’s effort to revive it in the 21st century is another story.

As the People’s Bank of China (PBOC) recently took some measures to tighten financial system liqudity, we have somehow remembered the Silk Road. This is because, at the both ends of the Silk Road, the PBOC and the Central Bank of Turkey (CBRT) are doing their best not to increase policy interest rates, while trying to maintain financial stability.

The motives of PBOC and CBRT, look both similar and different. On one hand, both central banks are trying to defend their currencies and prevent capital outflows, under pressure from slowing economies and FED tightening. China also aims to discourage asset bubbles, which seemed to be financed via interbank lending. Furthermore, both countries face the risk of high corporate leverage, domestic debt in China and external debt in Turkey. However, the PBOC and CBRT are reluctant to hike policy rates, except a 50bp hike in November from the CBRT, since they do not want to hurt their already gloomy economic outlooks. This reluctance is also being fed by very important political events in both countries; a critical Communist Part meeting in China and a constitutional referendum in Turkey.

On the other hand, inflationary pressures are building up in both countries. In fact, Turkey is clearly at a worse position, already suffering an inflation shock, mainly due to currency depreciation. Meanwhile, although the PPI is recording a fast increase in China, most of this is due to base effect and we don’t think inflation is an immediate threat, at least for the first half of the year.

Given these backgrounds, both CBRT and PBOC have taken some steps in the first two months of 2017, which appear to have similar and different effects until now.

One of the similar results can be seen at the upwards shift in market rates. In both countries, the interbank rates have rapidly increased following the central bank moves. Meanwhile, CNY and TRY recently show some signs of stability, with some additional help from increased risk appetite in global markets.

 

On the other hand, the yield curves in Turkey and China show different moves. The short end of the yield curve has clearly moved up in Turkey, while the long end went down. This indicates that the markets expect the CBRT to take back recent measures in the future and maybe cut rates, once the currency volatility and inflation has been controlled. However, in China, middle part of the yield curve has clearly increased and the overall curve has shifted up slightly, meaning anticipated policy tightnening ahead. This expectation is also being increasingly pronounced by economists.

 

To summarize, we think the monetary policies in Turkey and China will diverge in the coming months. Nevertheless, we wanted to point to the similarity for now. In fact, looking at current or past unorthodox monetary policies in emerging markets, we have started thinking whether using only one benchmark interest rate for these countries was the optimal monetary policy. Maybe we will visit the subject again in the future.

A Trouble of Its’ Own: Chinese New Year Data

First of all, Happy Year of the Rooster to all Chinese friends, colleagues and others.

According to this article, 乱七八糟 (luàn qī bā zāo), meaning “a total mess”, ranks #2 at list of “the common and useful Chinese idioms”. Just as China comes back from a long holiday, it reminds us the distortion in economic data, which is caused by this break. This one is among many difficulties of dealing with Chinese economic figures (*), but for today, we will only talk about the New Year effect.

While, we are happy to share positive thoughts and best wishes for the Chinese New Year, any economist covering China probably can not help feeling a little unease nowadays. This is because the Lunar New Year holiday does not go very well with economic data.

Seasonal or working-day adjustments are always easier, when some holiday always falls into the same month of the calendar. However things get a little tricky, when these holidays, especially long ones, shift around the calendar. Eid al-Fitr and Eid al-Adha are two most common examples, which are celebrated by Islamic countries. Still, even these holidays can be adjusted in terms of economic data, since their movement around the calendar is almost mechanical. The hardest of all, should be a week-long holiday, which alternates between two months each year, namely the Chinese New Year.

Take this: this year the Chinese New Year was between 27 January and 2 February. Last year, it was 7-13 February. In 2012, it was 22-27 January, etc. Please add the fact that some factories or workers extend the holiday for one more week, on either end (lesser number of others do it on week-long National Day holidays, in early October). We hope by now, you can imagine how big is the distortion in economic data during the first two months of the year. If you haven’t, lets take a look at yoy % change in China’s foreign trade.

At the first two months of each year, the data makes such a blip that it looks more like a heart graph, rather than an economic figure. This can be seen in any data, especially if they are expressed in nominal terms.

The distortion caused by the Lunar New Year on Chinese economic data is so big that even the National Bureau of Statistics opts for not releasing seperate data for key activity indicators, such as year on year change of industrial production, fixed asset investment or retail sales. That’s why, we won’t be seeing any January figures for these and some other data in the coming days, as it has been every year.

Maybe, merging two months’ data for a single indicator solves the problem of seeing a highly volatile data for January and February, every year. However, it creates a new one, which is the mismatch between the number of observations among different series. For example, we have 12 monthly data for yoy % change on trade, but industrial production data includes only 11 observations. Even for the easiest task of putting these two in the same graph, will require an extra observation for industrial production. Here we employ two different solutions depending on which one gives us the smoothest line: (1) duplicating the January-February figure for both months or (2) we take the average of December and January-Febraury figure and put it on January, (or January-February and March average figure and put it on February).

We wonder what other China economists are doing to fix it?

 

*: We are not, in any way, referring to the doubts the authenticity of official numbers. Although we loosely buy the idea that some economic data could be ‘smoothened’, we think that Chinese economic data are still the best we have at hand.