This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.

Retail Sales & Industrial Output Slow in August, PBOC Indicates Policy Support


Chief Investment Officer

Key News

Asian equities were mostly lower overnight on continuing delta concerns and lower-than-expected economic data coming out of China. US-listed China internet stocks were down yesterday on SEC Gary Gensler’s op-ed in the Wall Street Journal reminding us that the clock is ticking for US-listed Chinese companies to allow their audit papers to be reviewed by the PCAOB. As I said yesterday, this is nothing new and regulators from both countries need to develop a solution.

August tyear over year

Retail sales were disappointing and can be linked to the worst outbreak of Covid-19 in the country since early 2020. Online retail sales most likely rose. China’s industrial output also came in below estimates and July’s 6.4% reading. We knew this was going to be a less than ideal release as massive flooding and lockdowns in August were bound to hurt production. From a long-term perspective, China is transitioning from being the world’s factory. Therefore, industrial production is likely to fall before rising again as the government supports the domestic semiconductor industry. The transition will take some time and cause some disruption.

Perhaps in response to the nonideal economic release, the People’s Bank of China (PBOC) rolled over RMB 600 billion worth of medium-term lending facilities (MLF) that came due today, in a sign of continuing policy support. As a reminder, the central bank has ample dry powder to counteract economic slowdowns.

Embattled developer Evergrande saw its shares fall -5.4% overnight as the government announced that its creditors should not expect interest payments due next week.

Macau gaming stocks were sold off overnight on news of new regulations for the casino industry. New rules include the requirement of government approval for profit distributions. The gaming industry has been a key target of Xi’s anti-corruption campaign and these regulations appear to be the final word. As we have noted in multiple commentaries, we believe regulators will focus on industries other than the internet sector to close out 2021.

MSCI china all shares index
Asia country index ticker and 1-day percent change
stock 1-day percent change

H-Share Update

The Hang Seng Index fell -1.84% on volume that was +11% higher then yesterday. The Hang Seng Tech Index fell -3.14% overnight. The most heavily traded stocks by Mainland investors via Southbound Stock Connect were Tencent, which fell -4.10%, Meituan, which fell -4.49%, Sunac, which fell -5.15%, and Dongyue Group, which gained +4.43%.

A-Share Update

Shanghai, Shenzhen, and the STAR Board closed -0.17%, -0.11%, and -0.87%, respectively, overnight. The most heavily traded stocks by foreign investors via Northbound Stock Connect were Kweichow Moutai, which fell -2.49%, Longi Green Energy Technology, which gained +2.67%, China Merchants Bank, which fell -1.34%, and Jiangxi Ganfeng Lithium, which gained +7.91%.

Last Night’s Exchange Rates, Prices, & Yields

  • CNY/USD 6.44 versus 6.43 yesterday
  • CNY/EUR 7.60 versus 7.61 yesterday
  • Yield on 1-Day Government Bond 1.78% versus 1.83% yesterday
  • Yield on 10-Year Government Bond 2.90% versus 2.89% yesterday
  • Yield on 10-Year China Development Bond 3.22% versus 3.21% yesterday
  • Copper Price -0.54% overnight

Originally Posted on September 15, 2021 – Retail Sales & Industrial Output Slow in August, PBOC Indicates Policy Support

Author Positions as of 9/15/21 are KBA, KALL, KCNY, KFYP, KCNY, KEMQ, BZUN, HSBC, KWEB

Disclosure: KraneShares Advisors LLC

Content on China Last Night is for informational purposes only and should not be construed as investment advice. This material represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results; material is as of the dates noted and is subject to change without notice. This information should not be relied upon by the reader as research or investment advice regarding the funds or any security in particular.

This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities. Investing involves risk, including possible loss of principal.

This material contains general information only and does not take into account an individual’s financial circumstances. This information should not be relied upon as a primary basis for an investment decision. Rather, an assessment should be made as to whether the information is appropriate in individual circumstances and consideration should be given to talking to a financial advisor before making an investment decision.

Forward-looking statements (including Krane’s opinions, expectations, beliefs, plans, objectives, assumptions, or projections regarding future events or future results) contained in this presentation are based on a variety of estimates and assumptions by Krane. These statements generally are identified by words such as “believes,” “expects,” “predicts,” “intends,” “projects,” “plans,” “estimates,” “aims,” “foresees,” “anticipates,” “targets,” “should,” “likely,” and similar expressions. These also include statements about the future, including what “will” happen, which reflect Krane’s current beliefs. These estimates and assumptions are inherently uncertain and are subject to numerous business, industry, market, regulatory, geo-political, competitive, and financial risks that are outside of Krane’s control. The inclusion of forward-looking statements herein should not be regarded as an indication that Krane considers forward-looking statements to be a reliable prediction of future events and forward-looking statements should not be relied upon as such. Neither Krane nor any of its representatives has made or makes any representation to any person regarding forward-looking statements and neither of them intends to update or otherwise revise such forward-looking statements to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying such forward-looking statements are later shown to be in error. Any investment strategies discussed herein are as of the date of the writing of this presentation and may be changed, modified, or exited at any time without notice.

Disclosure: Interactive Brokers

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from KraneShares Advisors LLC and is being posted with permission from KraneShares Advisors LLC. The views expressed in this material are solely those of the author and/or KraneShares Advisors LLC and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

In accordance with EU regulation: The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.

Disclosure: Forex

There is a substantial risk of loss in foreign exchange trading. The settlement date of foreign exchange trades can vary due to time zone differences and bank holidays. When trading across foreign exchange markets, this may necessitate borrowing funds to settle foreign exchange trades. The interest rate on borrowed funds must be considered when computing the cost of trades across multiple markets.

Disclosure: Futures Trading

Futures are not suitable for all investors. The amount you may lose may be greater than your initial investment. Before trading futures, please read the CFTC Risk Disclosure. A copy and additional information are available at

trading top