Courtesy of Antony Barton at LiveSquawk comes this preview of the China Q1 GDP data due Friday 15 April, 0200GMT
You can get a free trial of Livesquawk here (tell 'em Eamonn sent you ... but maybe don't mention I nicked Antony's GDP preview, K?)
China's GDP growth is expected to slow to 6.7% YoY in Q1 from 6.8% in Q4 of last year, this would fall within the government's target range of 6.5%-7.0%, although such a print would also represent the weakest level of Chinese growth in seven years.
Bank of America expect that the slowdown will be present in both the secondary and tertiary sectors, on the back of "tepid industrial activity and a contraction in the financial sector, due in part to a high comparison base a year earlier on the back of a surge in stock trading volume."
Production and investment in the country remains sluggish, as the government tries to rebalance the economy amid structural overcapacity in the manufacturing sector.
The numerous interest rate and reserve requirement cuts, alongside the boosting of infrastructure spending, haveled to signals that growth is picking up. Survey measures of activity have improved recently and the property market has rebounded (in tier 1 cities at least).
The most recent trade data was encouraging for China, with a large jump in exports during March, although this was subject to weak base effects and questionable export levels to Hong Kong.
Looking forward, most see a modest pickup in growth during Q2 due to the aforementioned stimulatory measures, but whether this growth can continue over the next few years is another matter. BBVA are quite pessimistic on the outlook for the Chinese economy, suggesting that the "spill over effects of the turmoil in the stock, currency and other financial markets will make it difficult for China's growth to significantly pick up in the next two years."
HSBC also remain pessimistic, positing that "despite some signs of domestic demand stabilisation, risks to economic growth are still on the downside, as external demand was softer than expected and ongoing restructuring of the economy, such as the reduction of overcapacities will put additional pressure on growth in the near term. The recovery in the property market remains uncertain and dependent on further policy support."
Despite a relatively high degree of pessimism, few economists are expecting a hard landing in China, and earlier this week the International Monetary Fund (IMF) raised China's GDP growth target for 2016 to 6.5% from 6.3%. Although the fund noted that "the economy will remain in the slow lane due to its shift away from manufacturing to services and consumption."
Anthony Barton -- AnthonyBarton@Livesquawk.com (@AntBarton89)
