epa06772238 A Chinese man looks at an electronic board showing the stock index and prices at a securities brokerage in Beijing, China, 30 May 2018. China stock markets fell steeply on 30 May 2018 as fears of a trade war is renewed after US President Donald Trump announced punitive tariffs of 50 billion US dollar on Chinese imports.  EPA/HOW HWEE YOUNG
A Chinese man looks at an electronic board showing the stock index and prices at a securities brokerage in Beijing. Earliest indicators are showing Chinese economy is resisting a slowdown.  How Hwee YShow more

Chinese economy is resisting slowdown, economic indicators show

China’s economy is refusing to slow down without a fight.

That’s the picture that emerges this month from a new gauge of economic activity developed by Fielding Chen at Bloomberg Economics, which aggregates the earliest available indicators into one reading for the first time.

While an ongoing campaign to curb financial excess and deflate property bubbles is taking its toll on some parts of the economy, the damage is being mitigated by industry benefiting from increased pricing power and the recent strength of global trade, the dashboard shows.

The dashboard brings together eight readings from China’s trade partners, smaller businesses, sales managers, real estate, stocks and commodities to give an under-the-hood look at activity in the world’s second-largest economy, independent from - and before - the official data.

The gauge is based on the three-month weighted average of the changes of these indicators, smoothing out volatility in the single-month readings. A full dashboard, with five additional indicators, including the official purchasing manager indexes due May 31, plus South Korea exports, will be available from Bloomberg Economics early next month.

A moderation in the pace of growth for the world’s second-largest economy has been on the cards for some time, given 2017’s out-performance and the short-term costs of the effort to clean-up the financial sector. On the back of that concern, policy makers have acted to reassure that growth won’t slow too sharply, with the People’s Bank of China cutting reserve requirements in April.


Read more:


Combined PMI reports from the European Union, the United States and Japan point to a moderate slowdown, as do prices of real estate stocks and iron ore. Meanwhile, a survey of smaller companies and a tracker of factory inflation are still holding up.

Corporate profitability is also a bright spot that could carry momentum in the economy for longer than anticipated. Industrial profit growth accelerated to 21.9 per cent in April from a year earlier. That, plus signs that leading trade indicators like South Korea exports are headed for a strong performance, create some room for optimism.

Economists surveyed by Bloomberg see a 6.5 per cent expansion this year after 6.9 per cent in 2017, in line with the government’s own target.

The early indicators offer signals of a slowdown underway, not a definitive account. Factories might still be humming along, even while demand from the property sector and the rest of the world starts to lose steam. Industrial indicators for April surprised to the upside, though trade indicators in the month’s PMI readings softened.

The dashboard data based on real-time market prices and business surveys depict more of the on-the-ground situation in the private sector, while the official gauges tend to lean towards the state sector, Mr Chen said.

“The surprising strength in factory activities in April may not be sustained a few months down the road,” Mr Chen said, adding that the activities will be more in line with the slowing property, infrastructure and consumption demand. “We are expecting a gradual slowdown this year.”


Catchweight 60kg: Mohammed Al Katheeri (UAE) beat Mostafa El Hamy (EGY) TKO round 3

Light Heavyweight: Ibrahim El Sawi (EGY) no contest Kevin Oumar (COM) Unintentional knee by Oumer

Catchweight 73kg:  Yazid Chouchane (ALG) beat Ahmad Al Boussairy (KUW) Unanimous decision

Featherweight: Faris Khaleel Asha (JOR) beat Yousef Al Housani (UAE) TKO in round 2 through foot injury

Welterweight: Omar Hussein (JOR) beat Yassin Najid (MAR); Split decision

Middleweight: Yousri Belgaroui (TUN) beat Sallah Eddine Dekhissi (MAR); Round-1 TKO

Lightweight: Abdullah Mohammed Ali Musalim (UAE) beat Medhat Hussein (EGY); Triangle choke submission

Welterweight: Abdulla Al Bousheiri (KUW) beat Sofiane Oudina (ALG); Triangle choke Round-1

Lightweight: Mohammad Yahya (UAE) beat Saleem Al Bakri (JOR); Unanimous decision

Bantamweight: Ali Taleb (IRQ) beat Nawras Abzakh (JOR); TKO round-2

Catchweight 63kg: Rany Saadeh (PAL) beat Abdel Ali Hariri (MAR); Unanimous decision

Energy This Week

Expert analysis on oil & gas renewables and clean energy

      By signing up, I agree to The National's privacy policy
      Energy This Week