As a recent report by the
Intesa Sanpaolo Study Centrein the first three months of the year
China's GDP rose 6,7%, a moderate slowdown compared to the previous quarter (+6,8%):
the decline concerned all sectors, with the exception of construction and the real estate sector. And the subsequent data made available point to a stabilization of growth from April to June just below the first quarter. However, the deceleration of investments in the private sector, especially in manufacturing, leaves intact the prospects for a slowdown in economic growth in the second half of the year and during 2017.
Industrial production China rose 6,0% in May, stable from April, thanks to an acceleration in private sector output. A similar trend characterized retail sales, stable in real terms at 9,7% compared to March despite a slight deceleration in nominal terms, also supported by the recovery in car sales. At the same time, the job market appears in a path of moderate and slow slowdown, difficult to reconcile with an acceleration of the private consumption. In turn, fixed investments they decelerated to 9,6%, from a growth just above 10% maintained in the first four months of the year.
To the stabilization of investments in residential construction and in the real estate sector was countered by a slowdown of the investment in construction. From a sector perspective, while central government investment recovered and state-owned enterprise investment momentum remained high, particularly in transport infrastructure, investments by local governments and especially those of the private sector they slowed down. In particular, the decline continues in the mining and manufacturing sectors, mainly in chemicals, metal products and manufactured goods; Positive notes come, however, from pharmaceuticals and machinery.
Foreign trade recorded a stabilization of exports and an improvement of imports in the last months analysed. but since August, exports have reversed the trend with a drop of 2,2% which even became 10% in September, triggering the alarm of the analyzes on the possible bearish repercussions on the yuan. And to think that
le exports they had risen by 1% in May after 12 months of trend declines thanks to the better performance of ordinary goods compared to manufactured goods. Exports had benefited in part from a strong favorable base effect but the seasonally adjusted data nonetheless reveal a stabilization of exports between March and May.
Export volumes had risen by 6,9% in April in line with the dynamics of foreign orders which remain marginally improving compared to the first quarter. But since August and above all since September, the music has changed for Chinese exports. Imports they still recorded a tendential decline of 6,4% in May, however a clear improvement from the minimum of 13,5% in March, and the volume of both energy and food raw materials maintains a positive trend.
During the same period
inflation it fell to 2%, after having been stable at 2,3% in the previous three months, due to the drop in food prices, mainly fruit and vegetables, and domestic utilities. Prices in the meat sector continue to grow at high rates (20,8%) and the trend could continue to remain the same at least until the autumn. Producer price inflation is still negative (-2,6%) but is up sharply compared to the December lows (-5,9%), driven by the rebound in raw material prices.
The increase in the prices of some services (in this regard see medicines, education and rents) and the unfavorable base effect in the fuel sector supports analysts' forecast of a moderate increase in inflation in the coming months.
After the marginal acceleration of the second half of 2015 and the rebound in the first months of this year, the stock of bank credit has stabilized at the December growth rates (14,4% in May).
The Chinese authorities appear to be oriented towards recalibrating credit growth as emerged from an interview in the “People's Daily” at the beginning of May and from
Bloomberg News, which expresses the need for the country to address the problem of
problem credits and
excessive level of corporate debt. The recovery in credit has not yet supported the dynamics of investments by private companies and seems to have mostly been concentrated in medium-long term credit to households, see in this regard the item mortgages. However, the recovery of investments in the real estate sector appears to be transitory, given the levels of unsold stock.
Analysts continue to believe that in the next two years the increase in non-performing loans will limit credit dynamics despite the support from monetary policy, whose room for maneuver appears limited in any case. The slowdown in investments will continue throughout 2016, eventually impacting the job market and lastly on consumption. Investments in infrastructure, moreover, will hardly be able to sustain the pace of 2015 if not leading to a more abrupt collapse in the medium term. They are therefore maintained growth forecasts unchanged at 6,3% in 2016 with a marginal deceleration to 6,1% in 2017, while the risks on the short-term scenario are on the upside but remain on the downside in the medium term.
