A Chill Wind Blowing

Economic Research	01 Jun 2016
China
Economic Highlights
A Chill Wind Blowing China’s manufacturing PMI remained unchanged in May 2016, but new orders continued its down trend for the second straight month, showing demand growth was still sluggish. Looking ahead, we remain cautious for the recovery among industrial sectors, as the government will continuously implement deleveraging and de-capacity process for traditional industries. In the meantime, funding cost is still on the rise due to more defaults in bond market and rising NPL for banks. Narrowing fiscal expenditure will be another overhang for the government to finance existing/new projects. Thus, we still believe the risk will be on the downside for the growth of China’s economy. Economist:  Zhang Fan| +8621 6288 9611 ext 105
To access our recent reports please click on the links below: 16 May: Moderating Growth Trend Continues 10 May: Easing Deflationary Pressure For Industrial Sector 09 May: A Challenging Trade Condition Ahead 03 May: Mounting Risk Of Moderation 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