Country Economic Forecasts > China

Economic growth momentum in China held steady in November, with goods export volumes rising significantly again and real retail sales growth picking up. Meanwhile, overall FAI growth slowed to 8.3%, in part reflecting weaker real estate activity after the introduction of housing purchase restrictions in October. But the continued acceleration in the PPI, rising by 3.3% year-on-year in November, is supporting nominal sales revenue and profit growth for industrial enterprises. This is boosting FAI in manufacturing which grew at the fastest pace recorded in twelve months.On current trends China can comfortably meet the target of at least 6.5% growth this year we expect 6.7%. But the outlook for next year is more uncertain, with Mr. Trump's election creating challenges in particular for China's export outlook. Meanwhile, a sharply strengthening US$ is putting pressure on the CNY and could accelerate FX capital outflows. Domestically, pressures on growth could re-emerge as well. Weaker housing sales could dampen real estate investment growth. And the current pace of credit growth remains unsustainable.