China Growth Slowing Down
China Q2 GDP growth was reported at 10.3%, slowing down from Q1 growth rate of 11.9%. The slowdown came despite exports were stronger in Q2, meaning internal demand has weakened.
Chart 1. China GDP Quarterly Growth¸
Source: Bloomberg
Urban fixed assets investments growth rate also slowed down to 23.5%. The May reading was at 25.9%.
Chart 2. Fixed Assets Investment
Source: Bloomberg
Inflationary pressures are slowing down. Consumer price inflation in June was at 2.9% vs. 3.1% in May. June producer price inflation was at 6.4% compared with 7.1% in May. Again producer prices are growing faster than consumer prices squeezing profit margins.
Chart 3. Producer & Consumer Price Indexes
Source: Bloomberg
Industrial production growth also decreased to 13.7% in June vs. 16.5% in May.
Chart 1. China Industrial Production
Source: Bloomberg
All in all, question remains is this slowdown a result of intentional tightening induced by Chinese government or is the Chinese economy growth slowing down because of its unsustainable structure.
China, China CPI, China Fixed Assets Investment, China GDP, China Industrial Production, China PPI
