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

11:33 by Hubert Fromlet, Kalmar

Temperature Indicator rises – but no real progress


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.



Read the full article here. chinapanelsurveydecember2016.pdf

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


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