Outlook for China

Apollo Chief Economist

Our outlook for China is available here, and there are three conclusions:

1) Data for Chinese exports and US imports show that China and the US are now less dependent on each other, and the US is now importing more from Mexico than from China, see the first and second chart.

2) China continues to sell US Treasuries, and foreign purchases of US Treasuries are coming from the foreign private sector and not from the foreign official sector, suggesting that recent demand for US Treasuries has come from yield-sensitive buyers, see the third and fourth chart.

3) China has recently seen a trend increase in the share of private sector firms with negative earnings, see the fifth chart.

US and China less dependent on each other for trade
Source: IMF, Bloomberg, Apollo Chief Economist
US importing more from Mexico than China
Source: Census Bureau, Bloomberg, Apollo Chief Economist
China is selling Treasuries and buying fewer mortgages and fewer non-US bonds
Source: Treasury, Haver Analytics, Apollo Chief Economist
Foreign purchases of Treasuries come from the private sector
Source: Treasury, Haver Analytics, Apollo Chief Economist
A trend increase in the share of Chinese private firms that are loss-making
Source: Bloomberg, Apollo Chief Economist. Note: CNBUPRTD Index, CNLBPRTD Index used.

Download hi-res chart(s)

This presentation may not be distributed, transmitted or otherwise communicated to others in whole or in part without the express consent of Apollo Global Management, Inc. (together with its subsidiaries, “Apollo”).  

Apollo makes no representation or warranty, expressed or implied, with respect to the accuracy, reasonableness, or completeness of any of the statements made during this presentation, including, but not limited to, statements obtained from third parties. Opinions, estimates and projections constitute the current judgment of the speaker as of the date indicated. They do not necessarily reflect the views and opinions of Apollo and are subject to change at any time without notice. Apollo does not have any responsibility to update this presentation to account for such changes. There can be no assurance that any trends discussed during this presentation will continue.   

Statements made throughout this presentation are not intended to provide, and should not be relied upon for, accounting, legal or tax advice and do not constitute an investment recommendation or investment advice. Investors should make an independent investigation of the information discussed during this presentation, including consulting their tax, legal, accounting or other advisors about such information. Apollo does not act for you and is not responsible for providing you with the protections afforded to its clients. This presentation does not constitute an offer to sell, or the solicitation of an offer to buy, any security, product or service, including interest in any investment product or fund or account managed or advised by Apollo. 

Certain statements made throughout this presentation may be “forward-looking” in nature. Due to various risks and uncertainties, actual events or results may differ materially from those reflected or contemplated in such forward-looking information. As such, undue reliance should not be placed on such statements. Forward-looking statements may be identified by the use of terminology including, but not limited to, “may”, “will”, “should”, “expect”, “anticipate”, “target”, “project”, “estimate”, “intend”, “continue” or “believe” or the negatives thereof or other variations thereon or comparable terminology.