China’s economy less healthy in Q3
China´s economy was less healthy in the third quarter than a recent spate of upbeat data suggest, with growth coming exclusively from manufacturing and property while the services and retail sectors faltered, a private survey showed.
Manufacturing posted its fastest expansion nationally, with 53 percent of companies seeing revenue gains, up 3 percent from a year earlier, a quarterly survey of more than 3,100 firms by China Beige Book International (CBB) showed.
While a government infrastructure building spree and housing boom have given a much needed boost to “old economy” firms from steel mills to cement makers, CBB noted foreign orders had also improved.
But “new economy” sectors - services, transportation and retail - showed weakness both quarter-on-quarter and
year-on-year, with cash flow and profits deteriorating, leaving the country on uneven footing.
Services slowed and retail firms experienced one of their weakest performances in the history of the survey as e-commerce firms gobbled up more market share.
“The chief problem in China economic analysis remains the unwillingness to look behind dubious headline data,” authors Leland Miller and Derek Scissors wrote in a note accompanying the report.
“High-profile indicators such as GDP and the PMIs this quarter will rubber stamp the government´s recovery narrative, but only those with nothing on the line should accept this at face value.
“Official data for August raised hopes the economy was stabilising and perhaps even picking up, with industrial output, retail sales and property investment all quickening more than expected, while industrial profits grew at the strongest pace in three years.
But while the property sector showed another quarter of strong growth, there are signs that China´s real estate boom is starting to stutter, the CBB report said.