20 Jul 2015
China's tricky balancing act - ANZ
FXStreet (Guatemala) - Analysts at ANZ explained that China is facing a tricky balancing act between managing a growth transition and the aftermath of a credit boom and enacting structural reform at the same time. It seems likely that China will not be far from the headlines for quite some time.
Key Quotes:
"Encouragingly, last week’s China economic data were better than expected. Q2 GDP growth was a bit above market expectations at 7% y/y, supported by stronger growth in the services sector."
"Retail sales, fixed asset investment and industrial production growth in June were all better than expected, particularly production. While this is good news, our China economics team still expects China’s authorities will need to be proactive with both fiscal and monetary policy to support growth this year, including a further 25bp rate cut in Q3 and 100bps of RRR cuts across Q3 and Q4."
"We still expect full-year GDP growth of 6.8% y/y for 2015. Back on confidence, businesses appear a bit more upbeat currently than consumers. Unfortunately, business confidence in June, which rose, was surveyed prior to the two-week period that saw consumer confidence fall sharply."
"Surveyed business conditions also improved to relatively healthy levels and it’s not clear that events in Greece and China would have adversely affected reported trading conditions anyway."
Key Quotes:
"Encouragingly, last week’s China economic data were better than expected. Q2 GDP growth was a bit above market expectations at 7% y/y, supported by stronger growth in the services sector."
"Retail sales, fixed asset investment and industrial production growth in June were all better than expected, particularly production. While this is good news, our China economics team still expects China’s authorities will need to be proactive with both fiscal and monetary policy to support growth this year, including a further 25bp rate cut in Q3 and 100bps of RRR cuts across Q3 and Q4."
"We still expect full-year GDP growth of 6.8% y/y for 2015. Back on confidence, businesses appear a bit more upbeat currently than consumers. Unfortunately, business confidence in June, which rose, was surveyed prior to the two-week period that saw consumer confidence fall sharply."
"Surveyed business conditions also improved to relatively healthy levels and it’s not clear that events in Greece and China would have adversely affected reported trading conditions anyway."