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China: Q4 looks encouraging after lacklustre Q3 GDP growth – Deutsche Bank

FXStreet (Delhi) – Research Team at Deutsche Bank, note that despite weak IP and FAI numbers, Q3 GDP growth slowed only moderately (6.9% yoy, consensus 6.8%).

Key Quotes

“The stronger-than-anticipated growth was driven by the primary sector (4.1% yoy in Q3, vs. 3.5% in H1) and the tertiary sector (8.6% yoy in Q3, vs. 8.3% in H1). Growth of secondary industries (including mining, manufacturing and construction), however, slowed down from 6.1% yoy in H1 to 5.8% in Q3.”

“On the other hand, some leading indicators seem to suggest that there will likely be an investment rebound in Q4. Most notable development include: (i) a strong pickup in floor space starts on the property market, and (ii) an improvement of the fiscal situation.”

“Both are consistent with our earlier projection that strong recovery of land sales since July signals a soon-to-come rebound in property investment and will bring the fiscal slide in 2015H1 to its end. We reiterate our view that GDP growth will pick up modestly in Q4 to 7.2% yoy (from 7.0% in Q2 and 6.9% in Q3), led by an investment recovery.”

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