Between October 20 and November 3, we made our regular biannual survey on the business cycle and some policy questions on China. Roughly 20 China experts participated, coming from Europe, North America and Asia. Our best thanks to all the survey participants.
¤ Our so-called temperature indicator for the Chinese economy fell visibly to 4.6 from 5.3 in April (10 = extremely overheated; 1 = deep recession). This is the second lowest number since this survey started ten years ago. Only around the peak of the global financial and economic crisis in spring 2009, a lower number was noted.
¤ The panel’s GDP projections for China (average):
2014: 7.2 2014 q4: 7.0 2015: 6.9 (7.2 % in April 2014) 2015 q4: 6.7
¤ There is an obvious downward bias in the GDP forecasts of the panel, i.e. that the probability of a different outcome will rather be on the negative than on the positive side.
¤ The largest short-term risks – within the next few years as seen by the panel – are (ranked):
the (suspected) real estate bubble, different kinds of political/social tensions and unstable (domestic) financial markets.
¤ 46 percent of the participants expect the currency renminbi (RMB) to appreciate slightly (by 1-5 percent) in 2015; 38 percent see a more or less stable Chinese exchange rate. No panelist predicts a more remarkable strengthening of the RMB in the forthcoming quarters.
¤ 85 percent of our experts still feel concerned about the (assumed) overheated real estate market.
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