China: Economy is weak - ING

In view of Iris Pang, economist at ING, China’s November activity data shows that the economy is weakening.

Key Quotes

“Industrial production growth fell to 5.4% YoY from 5.9% in October. Retail sales only rose by 8.1% YoY, from 8.6% last month. The only positive note is on fixed asset investments, growing at 5.9% YoY from 5.7%, with growth up for a fourth month in a row.”

“Retail sales of automobile fell 10% YoY in November, worse than the 6.4% fall in October. The sector has suffered from competition from ride-sharing activities, which lowers demand for a second car.”

“But surprisingly, infrastructure investment grew only by 3.7% YoY, flat vs the previous month. As local government infrastructure projects start construction activities infrastructure investment should grow faster. If the growth rate continues at a low-single-digit level then we may need to revise our GDP forecasts downward.”