CHINA:

• CPI inflation will likely fall to 3%yoy in Q2 next year. Beneficiaries of disinflation will include oil refining, power companies, food processing, among others. Monetary policy easing will likely be gradual and modest, within the framework of being "prudent".
• Recent PMI for small firms improved significantly, suggesting that SME funding stress as a source of pressure for policy easing may not be as important as previously thought. Despite slowing real estate investments, real estate policies will likely remain firm for a long time.
• We address a number of China “hard landing” fears. We argue that China is more leveraged than many other EM economies, but the situation looks far better than what doomsayers suggest.

HONG KONG:

We think the economy eked out growth in Q3 and will grow a little faster in Q4, but the outlook is clearly one of below-potential growth over the next year or so. Uncertainty about the European economic outlook is the main risk for Hong Kong.
UserFiles/News/aem china nov 11.pdf
pls see attachment issued by Deutche BankUserFiles/News/aem hk nov 11.pdf

• [Editor:editor]