19 Jan 2016
Chinese growth extends its journey southwards – NAB
FXStreet (Delhi) – Tony Kelly, Senior Economist at NAB, suggests that China’s latest national accounts data showed a slowing trend for China’s economy in the December quarter – with gross domestic product rising by 6.8% yoy – down from 6.9% in the September quarter.
Key Quotes
“The services sector - the main engine for growth over 2015 – also slowed in the December quarter.
• China’s industrial production growth weakened in December – down to 5.9% yoy (from 6.2% in November) and below market expectations (6.0%). Nevertheless, the December result was equal to the average growth rate between July and November, suggesting industrial production growth may have stabilised.
• After improving over the previous two months, fixed asset investment softened in December. Growth in manufacturing has shown some improvement recently but investment in real estate is contracting.
• China’s retail sales growth was slightly lower in December, rising by 11.1% yoy (from 11.2% in November). The slowdown in real retail sales was slightly greater (10.9% to 10.7% yoy) but remains around its trend level over the past few years.
• China’s trade surplus improved in December, with both imports and exports strengthening in month-on-month terms. There are tentative signs that exports may be stabilising but given the volatility of, and other issues with, the data it is still too early to be sure.
• New credit expanded rapidly in December – totalling RMB 1.8 trillion (compared with RMB 1.0 trillion in November) – an increase of 7.1% yoy. However, for the year as whole, new credit was down, but with a shift towards traditional bank financing and away from the shadow banking sector.”
Key Quotes
“The services sector - the main engine for growth over 2015 – also slowed in the December quarter.
• China’s industrial production growth weakened in December – down to 5.9% yoy (from 6.2% in November) and below market expectations (6.0%). Nevertheless, the December result was equal to the average growth rate between July and November, suggesting industrial production growth may have stabilised.
• After improving over the previous two months, fixed asset investment softened in December. Growth in manufacturing has shown some improvement recently but investment in real estate is contracting.
• China’s retail sales growth was slightly lower in December, rising by 11.1% yoy (from 11.2% in November). The slowdown in real retail sales was slightly greater (10.9% to 10.7% yoy) but remains around its trend level over the past few years.
• China’s trade surplus improved in December, with both imports and exports strengthening in month-on-month terms. There are tentative signs that exports may be stabilising but given the volatility of, and other issues with, the data it is still too early to be sure.
• New credit expanded rapidly in December – totalling RMB 1.8 trillion (compared with RMB 1.0 trillion in November) – an increase of 7.1% yoy. However, for the year as whole, new credit was down, but with a shift towards traditional bank financing and away from the shadow banking sector.”