China: A controled slowdown in growth


Last week saw the release of a new set of statistics on China’s economy, which showed GDP expanding in line with expectations, at 6.7% year-on-year compared to the forecast of 6.6%.

Business data for June was on the right track at the end of the quarter:

  • Retail sales and industrial production exceeded expectations.
  • The industrial production growth rate seems to have stabilised at around 6% since 2015.
  • Investment data was slightly disappointing, but the slowdown in manufacturing investment, as certain sectors reduce overcapacity levels, was partially offset by an increase in infrastructure spending.chart week 28
    OUR ANALYSISIn addition, June data on the economy’s finances came out better than expected. After a very healthy start to the year, April and May numbers had been weaker.

    This bounce indicates that the authorities are still buoying the economy, but are aiming to stabilise growth rather than accelerate it.

    The opinion expressed above is dated July 15th, 2016 and is liable to change.

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