All signs point to an impending economic slowdown in China
Retail, property and fixed-asset investment growth have slowed down this year, while worsening trade ties with the US could weigh down the economy further
The outlook for China’s economy remains uncertain in the months ahead amid a slowdown in the pace of real estate investment, continuing financial deleveraging and patchy trade relations with the US, analysts warn.
“There are signs of headwinds developing as the housing market strength is expected to wane and Beijing’s risk control on local government debt will weigh on infrastructure spending,” said Aidan Yao, emerging Asia economist at AXA Investment Managers, on Thursday. “Significant uncertainties also exist on the external front, with the Sino-US trade tensions casting a cloud over China’s export outlook.”
Yao expects economic growth to moderate to 6.5 per cent in 2018.
China’s economy grew 6.8 per cent in the first quarter, exceeding expectations, after expanding by 6.9 per cent in 2017.
Recent economic data from other areas suggest a slowdown is likely.
While industrial output has exceeded expectations, growing 7 per cent in April from 6 per cent in March, retail sales growth dipped to 9.4 per cent year on year in April, down 0.7 percentage points from a month earlier.