China: Economic stability continued but Trump poses downside risks to the outlook - NAB

Gerard Burg, Senior Economist at NAB, suggests that the unexpected election of Donald Trump as the next United States President provides greater downside risk to NABs China forecasts – however the uncertainty around policy means that for now they are unchanged (6.5% growth in 2017, 6.25% in 2018).

Key Quotes

“It is too early to know if election rhetoric will translate into policy. The proposal during the campaign to impose a 45% tariff on all Chinese imports to the United States would have a significant impact on China’s economy – but would also negatively impact the US.”

“China’s industrial production growth was unchanged in October – increasing by 6.1% yoy. Construction related industries – steel and cement – recorded stable growth.”

“China’s trade surplus widened slightly in October – to US$49.1 billion. In monthly terms, both imports and exports were considerably weaker – however this largely reflected the impact of the Golden Week holidays at the start of the month.”

“Retail sales growth was weaker in October, increasing by 10.0% yoy (down from 10.7% in September). Given the strengthening in inflation this month, real retail sales fell from around 9.5% yoy to an estimated 8.9% – the slowest rate of growth since August 2004.”

“Headline inflation accelerated in October – with the Consumer Price Index increasing by 2.1% yoy. Producer prices rose comparatively strongly in October – rising by 1.2% yoy – the largest increase since December 2011.”