October 18th 2019
China – This morning’s numbers
This morning we got more key indicators on the health of the Chinese economy. The economy grew by 6% in the third quarter, which while marginally weaker than the previous quarter, was reasonably expected by markets.
This was the lowest in 26 years.
There was better news from retail sales which grew by almost 8% in the third quarter .
Trade war concerns are holding back some investment plans, while weaker demand is impacting on Chinese exports generally
This follows on from Tuesday’s downgrade of China’s growth by the IMF, who now look for 6.1% this year, and an even lower 5.8% for 2020. The IMF also estimate that a trade war would knock Chinese growth by about 1% in the long term with a corresponding 0.6% hit to US growth.
While growth may slip further, Chinese policy makers are reluctant to act too aggressively, as tackling financial risk in the system remains the priority.
Tradewinds 