LNU’s China Panel No 22 – December 28, 2016

11:33 by Hubert Fromlet, Kalmar

Temperature Indicator rises – but no real progress

Summary

Between November 22 and December 16, we made our regular fall/winter survey on business conditions in China. More than 15 prominent China experts participated, coming from Europe, North America and Asia.

¤  Our so-called growth-temperature indicator for the Chinese economy rose this time from 4.0 in spring this year to 5.2 (on a scale from 10 = very good, to 1 = very bad). Despite this improvement, 5.2 is reflecting one of the weakest numbers since the survey started in 2004.

¤  For 2017, our panel sees GDP growth at 6.1 percent which is slightly below consensus and official forecasts at around 6 ½ percent. Even 6.1 percent would probably be still acceptable for China’s political leadership – but not lower than this. Only 29 percent think that planned reforms from the Third Plenum in 2013 are on track.

¤  More than 90 percent of the participants believe that there is still a dangerous price bubble on the Chinese real estate market – but not really on the stock market (23 percent).

¤  The three major short-term concerns for the next few years are (ranked):
debt/non-performing loans, bursting housing bubble, persisting overcapacity in industry.

¤  General confidence in the Chinese economy in the forthcoming five years is located at 2.6 (scale 5 to 1, 5=very good). This is slightly weaker than in February 2016 (3.0), reflecting somewhat increasing doubts about China’s economic future more recently.

gdp_fall2016

 

Read the full article here. chinapanelsurveydecember2016.pdf

Hubert Fromlet
Senior Professor of International Economics, Linnaeus University
Editorial board

 

Back to Start Page

Comments are closed.