June 03, 2021
China’s latest macro numbers are still very strong, but moderating from their highs due to the waning base effect. Money and credit aggregates have continued to decelerate. As a key leading indicator, slowing credit growth raises a red flag for China’s cyclical outlook and deserves close attention. Meanwhile, CPI inflation has remained muted despite the sharp increase in producer prices, underscoring little passthrough of higher input costs to generalized consumer prices.