- MarketPulse - https://www.marketpulse.com -

China’s Economy Pickup Facing Tough Challenges Next Quarter

Just as China’s economy is beginning to show some signs of a pickup, allaying fears of a hard landing scenario, economists are already warning that the upturn may be short-lived and could unravel as soon as the current quarter wraps up.

“We do believe the impressive rebound in July will be short lived due to temporary pent-up demand and a structural downward growth trend,” Ting Lu, China economist at Bank of America Merrill Lynch (BoFA) wrote in a report published Tuesday.

The stronger-than-expected growth in industrial production in July, for example, was driven by demand that was suppressed during the liquidity squeeze in June and improved confidence driven by the government’s mini package of fiscal stimulus measures, Ting said. This recovery in demand won’t be sustained, he added.

BoFA expects gross domestic product (GDP) growth in the world’s second largest economy to grow an annualized 7.6 percent in the third quarter, before edging back down to 7.5 percent in the final quarter of the year. The economy logged a 7.5 percent growth in the second quarter, down from 7.7 percent in the three months before.

via CNBC [1]

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza [6]

Senior Currency Analyst at Market Pulse [7]
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza