Daily Management Review

Reuters: China will report a steady growth in January


02/05/2018


This week, China is expected to announce a steady growth in January amid mild inflation and growth in bank lending. However, the celebration of the lunar New Year will make it difficult to determine clear trends in the second world economy for at least another month, Reuters reports.



Gene Zhang
Gene Zhang
Business surveys show a steady start of the Chinese economy in 2018, with further expansion of production and sustained growth in services. Yet, most economists still expect a gradual loss of momentum in the coming months, as borrowing costs are rising and the real estate market cools.

In the coming weeks, China will release data on currency reserves, trade, inflation and bank lending in January, but there will be no official data on industrial production, retail sales and investments in January-February; these data will appear in March to smooth seasonal fluctuations.

Hundreds of millions of Chinese people prefer to travel during the celebration of the lunar New Year, and many factories and businesses are closed for several weeks. This year, the holidays start on February 16, while last year they started on January 28.

Nevertheless, experts will analyse what data is available for information on the state of both global and domestic Chinese demand.

As expected, exports in January rose by almost 10% in annual terms, according to a survey of Reuters 55 economists. This will be a slight softening compared to December, but will still indicate a solid start to the year, which is expected to lead to an increase in trade disputes between China and the United States.

China's imports may attract more attention, after a sharp slowdown in December added fears about a possible slowdown. The growth in imports may have doubled to almost 10%, although some of the jumps may have been associated with the creation of stocks before the holiday, rather than with demand.

Last year, China's economy grew by 6.9% thanks to the construction boom and the recovery of exports, but economists expect the rate to slow to 6.5% this year, which could affect other emerging markets and commodity markets.

source: reuters.com






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