Hi, I’m Paul Cavey, and I founded East Asia Econ in 2022.
I've been an economist looking at Asia for almost 30 years, as chief China economist at the Economist Intelligence Unit, head of China economics at Macquarie Securities, and a macro strategist in the global bond team at Wellington Management, where I led the firm’s macro forecasting and research for China, Japan, and Korea.
I studied undergraduate at Bristol University, and then finished a master’s in Chinese studies at SOAS in London. In two stints, I’ve completed over two years intensive Chinese language study at National Taiwan University.
My first visit to China was teaching English for a year in Henan in the mid-1990s. I moved to Asia in 2000, and have been here almost continuously since then, living in Taiwan, Hong Kong, Beijing and Tokyo. I now live in Taipei with my wife and parrot.
East Asia Econ is based on a very strong data infrastructure that enables a close analysis of economic cycles and lays the foundation for thinking about deeper structural and thematic issues. My market focus is fixed income and currencies, but the work has relevance for other investors, and anyone generally interested in the Asia element of global macro.
Covering all the data, there can be several cycle update emails in a day. They are summarized in an East Asia Today note that I aim to publish at 6pm Taiwan time. All the charts are available interactively on this website. I also publish a weekly, as well as periodic “Taking stock” notes to summarise my cycle view, and a thematic piece at least every couple of weeks.
Samples of all these can be seen below. Financial institutions that subscribe to my service receive everything. If you are interested, contact me for details. Individuals can sign up via the portal to receive East Asia Today and access the interactive data.
Short summary and charts of latest data releases, and links to fuller notes that day. Published around 6pm Taiwan.
In Korea, we've had the BOK minutes (published yesterday), and June JOLTS data. In Japan, the only releases have been 10D trade data for July and June Toyota sales. China's July Politburo was also released. That doesn't look to contain surprises, but I'll be going through it later.
China's foreign trade data for July, where I think imports are more interesting than exports; consumption trends for Japan in June; and Korea's BOP data, also for June, which showed the NPS outflow remaining large.
Many updates today. In China, property prices and the outlook for CPI, as well as the official activity data for July. The overall tone remains weak. By contrast, the first estimate of Q2 GDP data for Japan was solid. And detailed Q2 data for Taiwan, together with 2H25 forecasts, were more bullish.
East Asia Today, and access to visualisation and data tools that are updated as soon as new data are released:
Click for examples
Analysis of all data at time of release. Short, unless there is more to say.
Unusually, the BOJ's quarterly outlook report doesn't focus on wages and inflation. Instead, it looks at this year's two shocks – tariffs, and food prices. The bank argues that the rise in the part rate, seen again in today's June labour market data, has helped offset the impact of food prices.
Property prices and sales, investment and retail sales all deteriorated in July. It is at least possible to argue that the worst of the drop in property activity is now completed. That creates room for second-derivative improvement, but even that could be offset by slowing manufacturing capex.
Business confidence remains extremely weak, and consumer confidence isn't a whole lot better. That being the case, the BOK is going to want to cut further, but inflation readings in the sentiment surveys aren't giving the all-clear for an aggressive loosening.
Stepping back from the daily noise to summarise positioning in the cycle and market implications
Does anti-involution produce macro turnaround when the September combination of stock market and local government bail-out failed? The markets are hopeful. I am more cautious, given China's macro problems are weak demand as well as strong supply. I'd be wrong if household savings behaviour shifts.
Like most other observers, I think it unlikely that the BOJ changes policy this week. But given domestic price developments, there isn't much room for dovishness. And if the US really wants to tackle global imbalances, it has an interest in creating the conditions that allow the BOJ to hike further.
The economic environment for Korea is about as bad as it can get. Despite the short-term rebound in house prices, that suggests more rate cuts, starting at this week's meeting, that will ultimately take the policy rate below neutral. The one caveat I have is the stickiness of services inflation.
Longer pieces thinking about thematic and structural issues
Deflation looks like 1990s Japan. But China's exchange rate doesn't. Real CNY depreciation helps exports substitute for the weakness of domestic demand in a way that didn't happen in Japan. It also postpones the sort of stimulus that would ease deflation and provide more direction for markets.
Beijing will be very wary of all the talk of a Plaza II agreement. Plaza I is widely seen as a successful effort to stop Japan's economic rise. That imbalances have nonetheless persisted suggests US macro policy has a role to play, but why would US promises to get fiscal under control be credible?
There's rarely much interest in Taiwan macro. But 2025 could be different: with post-2020 domestic economic lift-off, and the return of Trump, the circumstances that have kept the TWD undervalued for 20 years might be changing. This is a detailed chart pack looking at the issues involved.
Summary of everything from last seven days, and outlook for the next seven. Published around 8am Monday morning.
While fundamentals remain weak, onshore China's markets have a tailwind from the H-A premium. In Japan, growth is ok and inflation firm, but the JPY needs more direction from the BOJ. In Taiwan, the export cycle is holding up, which should set the stage for more TWD strength.
Data themes remain unchanged. As tariffs – perhaps – stabilise, official sentiment is catching up to the data in Japan, with growing concern about inflation. In China and Korea, market sentiment has improved ahead of the data. Given Trump's desire for a deal, that's probably more justified in China.
A summary of what happened on East Asia Econ last week, and what to look for in the next seven days.