Bloomberg is starting the week off on a big China reporting spree, and the developments highlighted are positive!
- The ECB is considering adding the yuan to their currency reserve basket! (Whoa!)
- Premier Li Keqiang is executing some of the Third Plenum decisions in opening up the local bond market and forcing a bit more investor differentiation in the LGFV and SIV financing space, essentially allowing for more capital market opening and overall financing reform.
- It seems like import/export data at least has Li’s back for now!
This is all relatively positive, and I should really not bog this piece down with too much commentary. The really important takeaway from all of this is that the interplay of all these news – export data supporting the economy through a slightly tougher stance on local government financing that means forcing them to go to the bond market, thereby preparing capital market opening by expansion and allowing yuan internationalization in the long run – is perhaps the best indicator of where China’s top echelon sees the economy.