Chinese Growth Has Stabilized, but Slowdown Is Likely to Resume in the Second Half

April 2019 - March Data Release

The Conference Board Leading Economic Indicator (LEI) for China suggests that growth momentum has strengthened, but weakness in the export order and corporate profit outlook indicators raises concern about the durability of current momentum.

Officially reported GDP growth was 6.4 percent y-o-y in Q1 2019, the first break in deceleration in five quarters. With fixed asset investment (FAI) and retail sales growth both stabilized, Q1 data has largely been interpreted as a “cyclical bottoming”. We think Q1 GDP was likely a growth peak for the year.