China Picks Up The Pace
China, the world’s second largest and soon to be largest economy, has provided a couple of very positive updates this morning that bode well for not only the Asian but also the global economic recovery.
Headlining the release, and of particular importance for countries that export raw materials, is the Industrial Production number, year on year this is showing 8.8% growth which is an improvement on the prior month’s 8.7% reading and exactly in line with market consensus estimates. A year to date version of this number has also been made public, this is showing growth in Industrial Production of 8.7% which is consistent with both expectations and with the April reading. Comparing the 12 month reading to the year to date reading reveals a minor but nonetheless obvious slowing in the rate of Industrial Production growth from the world’s largest manufacturer.
There is clear evidence that domestic Chinese demand is continuing to expand at an impressive rate. Retail Sales data is now showing growth of 12.5% year on year, this is up on the 11.9% experienced in April and well ahead of market consensus estimates for 12.1% growth. The calendar year to date version of the Retail Sales number is also showing a moderate pick up, this is now reading at 12.1% compared to 12.0% in April, markets had not expected this 0.1% increase on the month.
China is still targeting 7.7% growth this year despite the latest estimates placing this more in the region of 7.4%. The early month’s of this year brought some significant concerns around China’s ability to come close to their growth targets. Geopolitical tensions drove up commodity prices which hampered the manufacturing sector, this was compounded by the implementation of some challenging structural reforms as China took steps to modernize it’s economy. Today’s figures confirm that the pace of expansion in China has picked up over the past couple of month’s and this makes the 7.7% growth target a realistic goal.
Sorry. No data so far.