As China’s National Bureau of Statistics announced today, the Chinese economy got off to a bouyant start in the fourth quarter. Industrial production in October was 16.1% up on a year earlier. Growth has now been accelerating for six months in a row. Retail sales also jumped, recording a rise of 16.2%. Motor vehicle sales were up particularly strongly (+43.6%), along with household appliances (+35.4%). Given these encouraging numbers, we see the economy gathering further momentum in the fourth quarter as a whole. We expect real GDP to be almost 10% up on the fourth quarter 2008, pointing to full-year growth of 8.2% in 2009.
China: Buoyant start to fourth quarter
We are assuming that the Chinese government will start to gradually rein in its stimulus measures in the course of next year. In particular, we forecast lending to be appreciably more moderate. We also expect to see a modest relaxation in exchange rate policy. With the Chinese authorities having halted the rise in the renminbi against the US dollar in the summer of 2008, they are likely to permit a renewed modest rise in the second half of 2010 at the latest. One necessary precondition presumably in the eyes of the government, namely positive export growth rates, is likely to be fulfilled as early as the first quarter of 2010.
Gregor Eder
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e-mail: [email protected]