Tuesday, January 19, 2016

China: Still Going Strong

(Drivebycuriosity) - There is a lot talk about "China is crashing". But this is bullshit. This morning we learned that China´s growth (BNP) had just slowed to 6.8% in Q4 2015, still about 3-times the current US growth rate. In December the Chinese retail sales rose 11.1% compared to a year ago (plus 11.2% in November tradingeconomics) and industrial production advanced 5.9% (after 6.2% in November tradingeconomics ). This numbers are by far better than the data from the US and Europe and light years away from the alleged crash landing.

China´s is slowing down moderately because the economy is transforming from an emerging country which is focused on manufacturing & exports towards a modern economy like the US which is mainly driven by services and the domestic demand. The still strong retail sales are a sign that China is right on track. The country also is adapting to a slow growing global economy. 

I think that the many official stimulating programs (lower interest rates, billions into infrastructure and more) and cheap oil & other commodities will generate enough tailwinds to rekindle the Chinese growth rates in the course of the year.

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