China Econometer – November 2019
China target expected to be met following Q4 growth
The final quarter of 2019 is a vital time for market watchers to understand the future growth prospects of the world’s second largest economy. An annual target of between 6 and 6.5 percent growth was set by the government at the beginning of the year. China achieved 6 percent growth in Q3, 6.4 and 6.2 percent in Q1 and Q2 respectively, indicating that overall annual growth will lie within this range, however at the lower end of the target. While the world’s second largest economy is experiencing a slowdown in its growth, these figures still represent a sizeable expansion for the Middle Kingdom.
Key Economic Indicators
China’s consumer price index (CPI) rose 3.8 percent year-on-year (y-o-y) in October, 0.8 percent higher than September’s 3.0 percent increase. This is the largest increase since January 2012. The producer price index (PPI), on the other hand, fell 1.6 percent in October, its steepest decline since July 2016. Food prices were up 15.5 percent y-o-y, with increasing pork prices due to African swine fever alone contributing over 60% of October’s CPI increase.
PMI declines for 6th consecutive month
China’s purchasing managers’ index (PMI) stood at 49.3 in October, down 0.5 points from September’s reading of 49.8. Sentiment in this sector remains low, as figures have followed a contractionary trend for the 6th consecutive month. The new orders index fell by 0.9 points to 49.6, contrasting with September’s expansion to 50.5. Positive developments with trade disputes between China and the US may restore positive outcomes within the PMI, however it is expected to remain within contractionary range throughout Q4.
China hosts the second China International Import Expo
China launched the second iteration of the China International Import Expo (CIIE) on the 5th of November. African countries were well represented at the event, with tourism boards, small enterprises and financial institutions representing their countries’ interests at this event, expected to have been attended by over a million people. The second iteration of the event was larger than the first with an additional 30,000 square meters bringing the expo area to 300,000 square meters in total.
This article is produced by The Beijing Axis and is published in The Econometer section of ChinAfrica magazine (December 2019), an English and French language monthly publication that provides news, views and analysis on all things China, Africa and China-Africa relations.