December 10, 2012
Chinese Monthly Update – November 2012
China’s economy showed further signs of steadying in October with most of the partial indicators recording an improvement. Year-ended growth in production, retail sales, fixed investment and exports all accelerated in the month. In contrast, bank credit came in below expectations.
- China’s economy showed further signs of steadying in October with most of the partial indicators recording an improvement in the month. Year-ended growth in production, retail sales, fixed investment and exports all accelerated in the month. In contrast, bank credit came in below expectations.
- The new members of the Politburo Standing Committee were revealed following the National Congress meeting. As expected, Xi Jinping looks set to replace Hu Jintao as President next March, while Li Keqiang will likely replace Wen Jiabao as Premier. The new group are considered to be relatively conservative, suggesting Chinese economic reforms may be more gradual than previously thought.
- We have kept our forecast for China’s GDP growth at 7½% in 2012 as the final quarter recovery will likely be modest. Growth should start to pick up in 2013 as recent policy stimulus gains more traction. We no longer expect any more cuts to interest rates this year, but a 50bp cut to reserve requirements is still possible.
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