Along with the economic data available for October – such as industrial production and retail sales – today’s PMI points to a moderate pace of growth in the fourth quarter, similar to that seen in the previous quarter. For 2013 as a whole we are still expecting real economic growth of 7.6%.
Although, overall, we remain fairly upbeat about the short and medium-term outlook for the Chinese economy, the lopsided development in individual areas of the economy continues to worry us. This applies especially to the property sector. For several months property prices in the conurbations have been rising sharply again. In Shenzhen the prices for newly completed residential properties were up more than 20% on a year earlier. In Peking the increase stood at a good 16%. We are hoping that the recent tangible slowdown in domestic lending (“total social financing”) will help to curb the rise in property prices in the course of next year. Taking a moving 6-month average, new lending peaked in May of this year but has since tapered off gradually. In October the volume of new lending was already almost 36% below its May level.