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Fast Comment ChinaA few positive signs amid general growth slowdown

  1. Official GDP growth at slowest pace since 2009, as expected
  2. Growth should stabilise later this year
Official GDP growth at slowest pace since 2009, as expected
Official GDP growth slowed as expected by consensus to 6.4 percent y-o-y in Q4 from 6.5 percent in Q3. This was the slowest pace since the global financial crisis. The monthly activity figures for December delivered a few positive surprises, but we doubt these are signs of stimuli already having stabilised overall economic growth. Industrial production growth increased to 5.7 percent y-o-y in December from 5.4 percent against expectations of a decline. We note that the increase was driven by mining and not manufacturing. Retail sales growth also surprised by increasing, but car sales were still very weak. Growth of fixed investment was weaker than expected in December, as stimuli-driven infrastructure projects failed to counter weak fixed investments within manufacturing and property.
Growth should stabilise later this year
We expect to see more policy easing from China’s authorities ahead, which should stabilise overall growth temporarily around Q2 of this year. We note that China’s authorities room for manoeuvre is more limited than in earlier economic downturns, and that one should not expect a repeat of the very large stimuli packages that China has come up with in the past. Thus, the stimuli measures in 2019 will mitigate but not avoid the growth slowdown.


Bjarke Roed-Frederiksen

Senior Economist

Latin America and China

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