Greater China Sales Traders
Monthly Macro Outlook: Reminiscent of 2016
Looking at China’s data, the evolution reminds us a lot of that of 2016 – another year of soft growth and exports. The comparison is interesting as it suggests that the outlook is not as bad as many believe. Retail sales and auto sales are much weaker this time, pointing to weak domestic demand, but industrial production, capacity utilization and confidence indicators are better. Concerning exports, the trend is negative but no worse than in 2016. As was also the case in 2016, the state sector has started to serve as a shock absorber, with state investment growth moving higher to offset the deceleration in private investment. This trend is likely to become clearer as the global macroeconomic outlook remains gloomy.