Chinese Q1 GDP along with industrial production, retail sales and urban fixed asset investment figures for March have just been released – and they’re horrible.
Year-on-year GDP expanded 7%, below the 7.3% pace of Q4 2014 and in line with expectations. On a quarter-on-quarter basis the figure was even weaker, rising 1.3% compared to expectations for an increase of 1.4%. When annualised, as is the case in some other nations like the USA, that equates to just 5.2%!
The National Bureau of Statistics, in a statement posted on their website, note:
According to the preliminary estimation, the gross domestic product (GDP) of China in the first quarter of this year was 14,066.7 billion yuan, a year-on-year increase of 7.0 percent. The value added of the primary industry was 777.0 billion yuan, up by 3.2 percent year-on-year; that of the secondary industry was 6,029.2 billion yuan, up by 6.4 percent; and that of the tertiary industry was 7,260.5 billion yuan, up by 7.9 percent. The gross domestic product of the first quarter went up by 1.3 percent against the previous quarter
Elsewhere, industrial production rose 5.6% on year, well below the 6.8% rate of February and forecasts for an increase to 6.9%. Interestingly, particluarly in light of the breakneck rally seen in Chinese stocks of late, “profits made by industrial enterprises above designated size stood at 745.2 billion yuan, down by 4.2 percent year-on-year”.
Retail sales also underperformed, printing at 10.2% against expectations for a gain of 10.9%, while urban fixed asset investment slowed to 13.5% — again below expectations for a fall to 13.8%.
While disappointing, particularly the monthly numbers, markets were largely sanguine about the weakness. After initially wobbling on the data the Australian and Kiwi Dollars, those closely aligned with the prospects for Chinese growth, are both now back to where they were prior to the data while the ASX 200, already down 0.5% beforehand, has eased by a further 0.3%.
Chinese stocks, reflecting the increased likelihood of further additional monetary and fiscal stimulus from policymakers, are adding to gains. The Shanghai Composite is currently up 0.3% while the Hang Seng, as it has done so in recent weeks, is adding to gains. It currently sits up 0.9%.