Renewed Optimism Seen For Chinese Economy
In March of this year Chinese leaders detailed the nation’s 13th 5-year plan running from 2016 – 2020 which doubles-down on a long-stated commitment to “double 2010 GDP by 2020”.
The 2020 GDP goal would require annual growth rates of 6.5% to go from a nominal $10-T last year to over $12-T in Y 2020.
That is the equivalent of adding an economy the size of Switzerland’s every year.
China’s official GDP data showed growth of 6.7% Y-Y in Q-3, boosted by stimulus measures introduced by Beijing that driven a number of metrics improve dramatically since the start of the year.
Manufacturing activity hit a more-than-2-year high in November, fixed asset investment and industrial output all improved while real estate statistics indicated stronger investment.
Imports of commodities including iron ore and coal came close to or hit monthly records and bank lending is growing at a solid clip despite restrictions designed to cool China’s credit markets.
A new survey by McKinsey & Company released last Thursday showed a marked difference in outlook compared to this time last year when a slowdown in China was the top concern of of global executives.
Now the heads of large corporations, especially in Asia are worried more about geopolitical instability, transition of political leadership and a slowdown in global trade.
About 26% of the more than 2,000 executives surveyed worry about the Chinese economy, compared to nearly 50% in the March 2015 survey:
“Respondents in China are much likelier now than they’ve been all year to say economic conditions at home have improved in the past six months: 29% say so, more than twice the share that said the same in June or March. And while these respondents most often expect stable conditions in coming months, they are increasingly optimistic about the future. Globally, executives are also bullish on China’s prospects. 53% of all respondents and 64% of those in China believe that in 2017, China will hit the annual growth targets of its current 5-year plan.”
China’s economy growing fastest since Y 2013
Growth hit 6.5% in November. That’s the fastest pace since Y 2013 using the Capital Economics gauge.
According to the report official GDP growth in Q4 is unlikely to be materially different with Capital Economics is forecasting 6.8%
Have a terrific week.
Latest posts by Paul Ebeling (see all)
- Donald Trump, ” I will turn it around, you are not forgotten anymore.” - January 19, 2017
- US Intelligence Sector in for a Trump Reformation - January 19, 2017
- Positive Big Bankers See Regulations Abating Under President Donald Trump - January 19, 2017