Mounting Risk Of Moderation

Economic Research	03 May 2016
China
Economic Highlights
Mounting Risk Of Moderation China’s manufacturing PMI missed market expectation in Apr 2016. Although the index stayed in its expansionary territory for two straight months due to recent pro-growth policies, rising fiscal expenditure and solid infrastructure investment, sluggish recovery of demand remains as major headwind for industrial sector. In a longer term, we remain cautious on the outlook for expansion in the sector, as de-capacity and de-inventory will be two major tasks for policymakers to carry on their economic restructuring process. Also, if government fiscal expenditure, which was the main driver for 1Q16’s growth, slows down, we believe China’s economic growth will continue its down trend in the coming quarters. Economist:  Zhang Fan| +8621 6288 9611 ext 105
To access our recent reports please click on the links below: 15 Apr: A Temporary Relief, But Headwind Remains 13 Apr: Improved Trade Numbers, But With Cautious Outlook 11 Apr: Mild Inflationary Pressure And Monetary Easing To Continue 01 Apr: Improvement Unlikely To Be Sustainable Due To Structural Problem 08 Mar: China Foreign Trade Tumbles On Waning Demand 07 Mar: A Slower Growth With More Help From Active Fiscal Policies