Macroscope | However the trade war goes, China’s mixed growth numbers suggest authorities will continue intervening in its economy

Industrial production and infrastructure investment slipped, the trade war outlook is murky and consumer spending mixed

Therefore, look for Beijing to continue policy easing and to boost bonds for infrastructure spending early in 2020

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A staff member works at an engineering machinery company in Tangshan, in northern China’s Hebei province. Photo: Xinhua

Published: 3:00am, 21 Nov 2019Updated: 5:01am, 21 Nov 2019

China’s October activity data, released last week, showed that economic growth was moderate after the uptick in September, repeating a peculiar seasonality that end-quarter strength tends to give way to renewed weakness as the new quarter begins.

Industrial production relinquished most of its rebound from the previous month, with year-on-year growth sliding to 4.7 per cent from 5.8 per cent.

A score goes to the National Bureau of Statistics purchasing manager’s index (PMI), which correctly picked the direction of industrial production moves, given the survey’s focus on medium and large industrial enterprises.

In contrast, the gain in the Caixin PMI, which focuses more on private-sector exporters, has coincided with improved trade growth in October.

The upcoming signing (or not) of a US-China trade deal will be the key to determine the policy trajectory for the first half of next year

Hence, the divergence of the two PMIs – underscored by the sampling differences – seems to corroborate well with other activity data.

.css-1m2rp1p{color:#34b8b5;}Macroscope | However the trade war goes, China’s mixed growth numbers suggest authorities will continue intervening in its economy

Macroscope | However the trade war goes, China’s mixed growth numbers suggest authorities will continue intervening in its economy