China: Weaker indicators point to slowing Q4 economic growth - NAB

Gerard Burg, senior economist at NAB, China’s November data dump points to a negative trend as the industrial production was at a post-GFC low, trade activity slowed noticeably and the retail sector remains subdued.

Key Quotes

“Combined, these indicators point to slowing economic growth in Q4 – albeit within the bounds of our forecasts. Our forecasts remain unchanged, with China’s economy growing by 6.6% in 2018, down to 6.25% in 2019 and 6.0% in 2020.”

“China’s industrial production growth slowed considerably in November – increasing by 5.4% yoy (compared with 5.9% in October).”

“China’s nominal fixed asset investment grew a little more slowly in November. However, the sharp downturn in producer prices – which flow through into investment goods – meant that real investment growth increased, up by 5.6% yoy, from 5.3% in October.”

“In real terms, China’s retail sales growth edged marginally higher in November – to 5.8% yoy (from 5.6% in October), a historically weak result.”

“New credit issuance remained weak in November, with lending falling by around 20% yoy.”