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Data Flash is a brief interpretive summary of China’s official monthly economic data release.
- Corporate lending surged again in January, while household mortgage growth continued to decelerate. Both indicators are considered positive in that they suggest some credit flow redirection from financial asset speculation to real-economy investing.
- Moderating housing price growth in key cities in January confirmed the gradual cooling down in the real estate sector.
- Both industrial and consumer prices continued climbing in January, so inflationary pressure remains an issue. However, an improving price environment is positive for industrial profit recovery.
- Export growth returned to positive territory in January. Improving PMI in the US and Europe could leverage external demand modestly for China’s exports, but downside scenarios must be considered due to trade relation uncertainties associated with the new US administration, Brexit, and other geopolitical developments.