Chart of the week: China’s smog index heralds weakness

Smog levels in five major Chinese cities climbed along with house prices in early 2017 and late 2018. Now, it's pointing down.

Chart of pollution and house prices in China

Trying to gauge the state of the Chinese economy is often like peering through smog; official statistics are widely deemed unreliable. But smog itself, or rather the absence of it, backs up other recent signs that growth has come off the boil, as Nathaniel Taplin points out in The Wall Street Journal.

Air pollution correlates best with the "housing-driven heavy industry sector". Pollution levels in five major cities climbed along with the "last two big run-ups" in house prices in early 2017 and late 2018.

Pollution levels are "now trending sharply lower again". The PMI survey tracking construction is down sharply year-on-year, and overall house price growth has eased to an annual pace of 8%, compared with 11% in mid-2019.

Viewpoint

John Mauldin, Mauldin Economics

Recommended

Inflation looks likely to take off this year – but there’s one key risk
Inflation

Inflation looks likely to take off this year – but there’s one key risk

With the world’s governments spending money hand over fist, inflation looks certain to take off at some point. But China could change all that. John S…
19 Jan 2021
Post-Covid-19, China’s markets are back to square one
China stockmarkets

Post-Covid-19, China’s markets are back to square one

2020 has been a landmark year for Chinese markets, with foreign investors snapping up more than ¥1trn of local assets.
19 Dec 2020
Nasty surprises in Chinese corporate bonds
Corporate bonds

Nasty surprises in Chinese corporate bonds

Beijing is allowing more state-owned firms to default on their debt, leading to some nasty surprises.
12 Dec 2020
Asia's RCEP: free trade without the red tape
Global Economy

Asia's RCEP: free trade without the red tape

Regional Comprehensive Economic Partnership (RCEP), Asia's new trading block, shows that it is possible to create large single markets without making …
22 Nov 2020

Most Popular

The FTSE 100 is set for a makeover with an influx of new tech stocks
UK stockmarkets

The FTSE 100 is set for a makeover with an influx of new tech stocks

The FTSE 100 – the dullest index in the world – is about to reinvent itself as a host of new firms list on the market. The change is long overdue, say…
24 Jan 2021
Think Tesla is a bubble? This might be the best way to bet on it bursting
Oil

Think Tesla is a bubble? This might be the best way to bet on it bursting

The huge rise in Tesla’s share price means that, by market value, it’s now the sixth-largest company in the US and and the world’s biggest car-maker. …
25 Jan 2021
Why we won’t see a house-price crash in 2021
House prices

Why we won’t see a house-price crash in 2021

Lockdown sent house prices berserk as cooped up home-workers fled for bigger properties in the country. And while they won’t rise quite as much this y…
18 Jan 2021