Short term disruptions add some uncertainty to extent of China’s economic slowdown

• Weak production and import numbers continue to suggest slowing conditions in the industrial sector, however this signal was less clear in August, due to disruptions related to the Tianjin port explosion and industrial shutdowns ahead of the World War 2 anniversary military parade in Beijing. Next month’s data should provide a better indicator of underlying conditions.

• China’s 2014 GDP was revised lower in September – with growth down to 7.3% (compared with 7.4% previously) – due to weaker growth in services.

• China’s industrial production growth remained weak in August – at 6.1% yoy (up marginally from 6.0% last month).

• Growth in fixed asset investment slowed further in August – down to 9.2% yoy (from 10.3% previously) – the lowest rate of growth since December 2012.

• A sharp drop in imports led to another widening in China’s trade surplus in August – out to US$60.2 billion (from US$43 billion in July). This level was only marginally below the all time high recorded in February.

• There was a slight increase in headline inflation in August, although the rate remained around the modest trend levels seen over the past eighteen months – with the CPI rising by 2.0% in August (compared with 1.6% in July). Pork prices remain the key influence.

• New credit was stronger in August – almost 13% higher in year-on-year terms. However, it remains around -10% yoy lower over the first eight months of 2015.

For more details, please see attached document

China economy at a glance  – 13th September 2015 (PDF, 667KB)