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China’s Strong First Quarter Growth but Cloudy Outlook of CBB


March, 28 2018
watermark Economic news

Economic activity in China continues to be strong in the first quarter with hiring almost reaching a record high. Although both the property and commodity are looking uncertain with signs of cooling based on the private survey on Wednesday.

The first quarter revenue came out strongly while all sectors except for manufacturing has declined since late 2017 while investment and cash flow weakened, according to the quarterly survey of thousands of Chinese firms by China Beige Book International (CBB).

CBB report also showed weakened Retail sector while domestic demand looks strong enough to support the rise of Chinese exports and faces problem from stiff trading measures of U.S.

Last year ended well for China with a “cloudy” outlook this year and it is presumed to continue significantly throughout this year, based on the first-quarter reports of CBB.

Nonetheless, the growth rate is less likely to match the period of Halcyon in 2017 without trade shock or any relevant deleveraging.

In unanimity, production has slowed down in Beijing that lessened the industrial pollutions and closed older and inactive mills.

Chinese steel companies continue to rally due to strong sales which counter the anticipation of a dull winter. At the same time, borrowing, capital expenditures, and hiring grew as reflected in the survey.

The steel sector rose for eight consecutive quarters despite the Asian country’s pledge in the reduction of excess capacity, according to CBB.

The bigger question if there will be enough momentum the induce growth in the next 12 months. Meanwhile, property and commodities need a further boost since it is less likely for the unexpected performance of the manufacturing sectors in the past two years to continue.


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