RHB | China | Muted Industrial Growth, Showing Sluggish Economic Recovery

Economic Research	02 November 2015
China
Economic Highlights
Muted Industrial Growth, Showing Sluggish Economic Recovery China’s manufacturing PMI stayed unchanged in Oct 2015, but surprised the market on the downside. The index has already stayed in contractionary zone for three consecutive months, indicating industrial growth was still muted and would remain as the major drag for the economic recovery. Policy wise, we still expect monetary easing will continue in the medium term. Although the central bank is likely to keep benchmark interest rate unchanged in the near term to allow more time to evaluate the impact on its real economy, the authority will not hesitate to further lower RRR by another 25bps in 4Q15 and 200-250bps in 2016 to sterilise the loss in capital outflows. Meanwhile, we expect to see more supports to come from policy banks as well as from the central government to directly lower funding cost for corporates and cushion the economic slowdown. Economist:  Zhang Fan| +8621 6288 9611 ext 105
To access our recent reports please click on the links below: 26 Oct: Not The End Of Monetary Easing 19 Oct: Heading South 15 Oct: Mild Inflation Provides Room For Easing 12 Oct: Remain Cautious For China’s Trade Condition 01 Oct: Slightly Improved, But Far From Enough 23 Sept: Downside Pressure Remains For Manufacturing Sectors 14 Sept: Economic Growth Remained Muted