Private survey: China economy improves in Q2, but deleveraging poses risks - RTRS
|Reuters reports the quarterly survey of thousands of Chinese firms, published by China Beige Book International (CBB), showing that while the property sector slowed, manufacturing improved further and the retail and services industries bounced back after a bleak Q1.
Key Points via Reuters:
“The survey showed surprisingly strong performance in the commodities sector despite some price weakness in the second quarter, with the aluminium sector particularly strong.
CBB said there are signs tougher times could be ahead for Chinese companies during a period of deleveraging and rising interest rates.
The CBB survey showed the corporate sector started to feel the effect of tighter credit conditions in the second quarter after escaping relatively unscathed in the first three months of the year, with the cost to take a bank loan the highest since 2014.
But borrowing was not impacted much, CBB said, likely due to firms' positive business outlook for the next six months, though CBB said that this may not last if tightening persists.”
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