The following is an extract from the August 2014 edition of China+ Economics.
The latest economic data out of China continues to show that growth is comfortably within the government’s preferred range of being above an annualised rate of 7%.
+ for the first half it was up 7.4% year on year
+ manufacturing is still expanding according to both official and unofficial PMI measures
+ retail sales growth has slowed considerably but remains strong, increasing 12.1% year on year
+ corporate profits are also recovering, including in the steel sector
+ inflation remains low, only 2.3% in July
+ external sector is strengthening with exports up 14.1% in July over the prior year. This is at least partly due to the recovery of the US economy.
+ Also contributing to the economy are selective policy easing and micro stimulus packages.
Unfortunately, debt overhang in the shadow-banking sector for many private sector firms and among local and municipal governments has constrained investment as balance sheets are being repaired. These, together with greater uncertainty about the economic outlook and oversupply, are forcing an adjustment in the property sector.
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