Tag Archives: China growth forecast

The authorities are growing more tolerant of lower headline growth, which is already showing early signs of declining.The latest Chinese economic data for October indicate the moderate deceleration in growth already seen in Q3 is extending into Q4. Both exports and domestic demand have slowed, particularly in terms of fixed-asset investment. National fiscal spending has shown signs of slowing, and central government has cut off support for some regional infrastructure projects on concerns of...

The latest data releases seem to confirm our view that Chinese growth is decelerating, but our GDP forecast of 6.8% growth for 2017 remains unchanged.The latest data on China’s economic activity point to a slowdown in China’s growth momentum in the third quarter, after the positive surprise of the first half of the year. We expect growth to continue to moderate for the rest of 2017 and into 2018, but the pace of deceleration may be fairly modest. We have thus decided to keep our GDP forecast...

August manufacturing PMI showed solid industrial activity, while domestic demand is holding up well. We are keeping our Chinese GDP forecast unchanged.China’s official manufacturing PMI in August came in at 51.7, rising slightly from July (51.4), and remaining firmly in expansionary territory. The Markit PMI extended its ascendance for the third consecutive month to reach 51.6 in August.Domestic demand seems to be holding up well. The production, new orders and imports sub-indices of the...

Chinese GDP higher than forecast in Q2; we expect 2017 GDP growth of 6.8%.Chinese GDP for Q2 2017 grew by 6.9% year-on-year (y-o-y) in real terms, the same pace of expansion as in Q1. The growth figure beats both the consensus forecast and our own estimate. We have decided to revise our Chinese GDP growth forecast for 2017 to 6.8% from 6.5%, and the forecast for 2018 to 6.3% from 6.2%. These revisions reflect both the stronger-than-expected growth in Q2 and a better outlook for the near term...

June PMI surveys suggest that economic activity moderated only slightly in the last quarter, but we maintain our view the deceleration in Chinese growth will be more notable in the second half.China’s official manufacturing PMI rose to 51.7 in June, the second highest reading in 2017. The Markit manufacturing PMI also rebounded to 50.4 in June after having dropped below the 50 threshold in the previous month. The rise in both indices in June suggests that China’s growth momentum in the...

Growth momentum in China has softened a bit after a strong first quarter. Meanwhile, US-China trade relations look like they might be improving.Economic indicators for April point to some softening in growth momentum in China. Hard data confirm the moderation seen in manufacturing and non-manufacturing PMIs released earlier this month, and the direction of change is consistent with our expectation that Q1 marked the peak of growth momentum in China for 2017.In our view, the deceleration in...

China’s Q1 GDP higher than forecasts, but we maintain our view that growth will start to slip, especially in the second half of 2017.Chinese GDP grew 6.9% year-over-year (y-o-y) in real terms in Q1 2017, up from 6.8% in Q4 2016 and 6.7% for the full year of 2016. The strong  growth figure beats both the consensus forecast (6.8%) and our own estimate (6.7%).  In nominal terms, the rise in GDP was even more significant, growing 11.8% over the year to March 31, mainly driven by higher prices...

PMI data in China has continued to move higher, meaning the near-term outlook is strong, but tighter controls on the property sector and on monetary policy point to a slowdown in the second half.The official PMI figures for manufacturing and nonmanufacturing rose again in March, extending a rebound that has been evident since early 2016. Sub-indices also remain on a solid upward trend, with the production and new order sub-indices reaching their highest levels since mid-2014 and the new...

Data shows strong fixed investment and industrial production, but consumption has weakened. We still expect 2017 GDP growth of 6.2%.The first batch of hard data on domestic activity for 2017 point to strong momentum in fixed-asset investment (FAI) and industrial production, while consumption has been on the weak side. In the first two months of 2017, FAI grew by 8.9% y-o-y, compared to 6.5% for December 2016 and 8.1% for 2016 as a whole. As FAI has been the key variable that drives China’s...

Solid PMI figures indicate stable growth for the Chinese economy in Q1 2017, but we maintain our below-consensus forecast for GDP growth this year.China’s official manufacturing purchasing managers’ index (PMI) in February came in at 51.6, compared with 51.3 in January, while the Caixin (Markit) manufacturing PMI rose by 0.7 from the previous month to 51.7. The official non-manufacturing PMI in February remained an elevated 54.2, only slightly below the reading of 54.6 in January.In summary,...