China | Growth dipped in July

Summary

A batch of July economic indicators are announced today, together with the previously released trade and credit data, suggesting that the growth further decelerated amid the escalation of US-China trade war and the domestic structural obstacles such as debt overhang and financial risks.

Key points

• Key points:
• A batch of July economic indicators are announced today, suggesting that the growth further decelerated amid the escalation of US-China trade war and the domestic structural obstacles such as debt overhang and financial risks.
• Although the US president Trump postponed the tariff hike of some Chinese exports to December, which we believe accounts for around 60% of the remaining USD 300 billion shipment from China, trade war uncertainties are likely to persist for a long period of time.
• Looking ahead, the growth outlook in 2H 2019 depends on the authorities’ policy stance.
• Altogether, we maintain our 2019 GDP forecasting at 6% (the authorities’ target: 6-6.5%).
• The risk of growth deceleration in 2H 2019 remains high.

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