China’s Earliest Economic Indicators Show Signs of Stabilization

China’s policy makers, armed with their 2016 economic plan, can take heart they’ll start the year on firmer footing as the earliest indicators for December show more signs of stabilization.

Improvements are visible in gauges from search engine data to executive surveys, additional ways to take the economy’s pulse that can help fill the void after private providers recently suspended two of the earliest reads on data.

Leaders of the world’s second-largest economy have signaled they’ll do more to prevent a sharp slowdown, including widening the fiscal deficit and cutting an oversupply of housing, according to a statement Monday from a key planning conference. Authorities say growth can meet their target of about 7 percent this year. Economists surveyed by Bloomberg project a 6.9 percent 2015 pace and 6.5 percent next year.

China watchers have a tougher job of gauging the economy after losing two purchasing-manager surveys previously issued in the same month as the one being measured. The preliminary reading of an unofficial purchasing managers index from Markit Economics Ltd. and Caixin Media was scrapped in October, and a PMI from China Minsheng Banking Corp. and the China Academy of New Supply-side Economics was suspended this week.

Reports that showed no further deterioration contrasted with another New York-based survey this week that showed a worsening business climate.

Economic conditions deteriorated across the board in the fourth quarter, according to a private survey from China Beige Book published by research group CBB International. National sales revenue, volumes, output, prices, profits, hiring, borrowing, and capital expenditure were all weaker than the prior three months, the report said.


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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

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