China: Recovery signs continue - Danske Bank

According to analysts from Danske Bank, recovery signs for the Chinese economy continue as exports, car sales, credit and money growth all revive in March.

Key Quotes: 

“The positive news flow on the Chinese economy continued this week. Credit growth moved higher in March and grew at the strongest pace since 2015. Both bank lending and shadow finance contributed to the increase. M1 growth moved higher to 4.6% y/y in March from 3.0% y/y in February. Exports rebounded as well, beating expectations with a rise of 14.2% in March (consensus 6.3% y/y). Finally car sales edged higher, breaking a string of negative surprises.”

“On the inflation side producer price inflation increased on a monthly basis after declining for four months in a row. It generally reflects the rise in industrial commodity prices lately but is positive for industrial profits.”

“The IMF released its spring forecasts this week. While growth was revised lower for most countries, China was the outlier as the IMF lifted the forecast for 2019 to 6.3% from 6.2%. The revision was based on changed assumptions for US tariffs. The tariff the rate on USD200bn of Chinese goods was kept at 10% as part of the ceasefire deal instead of rising to 25% as assumed in the previous forecast. For 2020 the IMF estimate was lowered to 6.1% from 6.2%.”