Economy

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China GDP growth of 6.4% in Q4,  lowest since the global financial crisis, full year 6.6% GDP matches consensus also. Economists expect Beijing to increase stimulus measures ahead. December Industrial production and retail sales came in better, employment worse.

Stimulus measures include additional cuts to banks' required reserve ratio, however previous rounds of heavy stimulus have left policymakers with less flexibility to loosen credit given the massive debt burden overhanging China.  The positives are the December industrial production and retail sales beat (already lowered, expectations) and may help reduce some of the concerns of a growth slowdown becoming more entrenched this year. Unemployment however has edged up which figures towards more stimulus/

Fourth Quarter Economic Growth (GDP)

  • For Q4 6.4 % y/y as expected 6.4% y/y, prior 6.5%
  • For the full year, 6.6% as expected, prior 6.7%
  • For the Q4 q/q 1.5% expected 1.5%, prior 1.6%

Industrial Industrial Production

  • Industrial Production +5.7% y/y beat expected 5.3%, prior was 5.4%
  • industrial production YTD 6.2% y/y as expected 6.2%, prior was 6.3%

Fixed Asset Investment

  • Fixed Assets (excluding rural) YTD 5.9% y/y less than expected 6.0%, prior was 5.9%
  • Private sector investment +8.7% YTD

Retail Sales

  • Retail Sales 8.2% y/y beat expected 8.1%, prior was 8.1%
  • Retail Sales YTD 9.0% y/y as expected 9.0%, prior was 9.1%

Spokesman for the National bureau of Statistics

  • China sees complicated international and domestic economic conditions
  • Macro leverage ratio stabilised in 2018
  • The size of China's tax cuts are above expectations
  • US trade war has impacted China's economy, but its manageable
  • Economy has slowed but has stabilised in the past 2 month
  • Service sectors still operating ate high levels despite the December PMI slow down

From The TradersCommunity Research Desk

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