China Center Data Flash: Growth is stabilizing temporarily on better policy coordination

Data Flash is a brief interpretive summary of China’s official monthly economic data release.

China’s sequential economic growth looks to have continued stabilizing in May and June, but remains fragile enough that central authorities have recently put out a renewed call to localities to boost their efforts at maintaining economic growth, in part through better “budget efficiency,” which includes a speeding up of investment project approvals as first priority.

Additionally, a State Council meeting statement outlined its intention to support economic growth by injecting funds for “effective” infrastructure spending, such as upgrading power grids in rural areas, grain storage facilities, and water treatment facilities. Payments will also be made to relocate/renovate traditional industrial or mining areas. Unfortunately, the rhetorical emphasis on “efficiency” and “effectiveness” has yet to be put into practice and belies the fact that the authorities are essentially relying on the same old, investment-centric playbook to stabilize the economy.