China Delivers "Surprisingly" Great Economic Data Across The Board, Yuan Yawns

Tyler Durden's picture

Following more dismal data from the US, hope for global growth remains in China and they did not disappoint. Despite slumping macro data, a major slowdown in real estate, and the nation's deleveraging efforts in the last three months, GDP beat, Retail Sales beat, Industrial Production surged, and even fixed asset investment was above expectations. The Yuan hasn't moved.

For the last three months, Chinese data has been disappointing, along with US, as the collapsing credit impulse leaks into reality...

But exports and consumer spending have been pillars for the economy over the second quarter, offsetting the curb on leverage, and tonight's data shows that none of that matters.. because the deleveraging economy beat across the board

  • China GDP BEAT 6.9% (exp +6.8%, prior +6.9%)
  • China Retail Sales BEAT 11.0% (exp +10.6%, prior +10.7%)
  • China Fixed Asset Investment BEAT 8.6% (exp +8.5%, prior +8.6%)
  • China Industrial Production BEAT 7.6% (exp +6.5%, prior +6.5%)

As the charts below show, more of the same well-managed data to show that all is well enough that hope remains...Strong growth again reflects an economy awash in credit, foretold in the latest new yuan loans (1.54 trillion yuan) and aggregate social financing (1.78 trillion yuan).

Enda Curran, Bloomberg's Chief Asia Economics Correspondent, notes that at first glance there's not a lot for the bears in these numbers given they appear strong across the board. The backdrop though continues to be one of cheap credit and mounting risks. That's an issue policy makers say they are aware of but for now, it seems like growth above all else is key.

Iris Pang, greater China economist at ING Bank in Hong Kong:

"Higher than expected GDP growth comes from strong industrial production. That said, the gap between FAI growth and industrial production growth tells the story that it is consumption and export driven growth."

Julian Evans-Pritchard, China economist at Capital Economics, said the strength seen in the data seems unlikely to last:

"The recent crackdown on financial risks has driven a slowdown in credit growth, which will weigh on the economy during the second half of this year.

 

"What’s more, the National Financial Work Conference that concluded over the weekend has signaled that further regulatory tightening remains on the horizon."

We wonder how long before the lagged response to the credit impulse collapse hits GDP... (NOTE the weaker and weaker reactions in GDP to credit impulse surges)

 

The reaction in Yuan is underwhelming for now... (after its biggest weekly gain since March)

 

China's stock market ripped back higher (after an early plunge) ahead of China's data dump, and held those gains as the data hit (we wonder if someone got wind of the data a little early?).

As a reminder, Japan is closed for a holiday so we are not getting the usual juice from BoJ shenanigans on any move.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
yomutti2's picture

China will do great for the foreseeable future.

Russia will continue slipping ever further down the 3rd world curve.

 

GUS100CORRINA's picture

China Delivers "Surprisingly" Great Economic Data Across The Board, Yuan Yawns

My response: When I see headlines like the one above, I get more confused everyday.

We see data on GHOST CITIES, GHOST INVENTORY, SHADOW BANKING ISSUES, RISING CREDIT DEFAULTS, etc. and yet the CHINESE economy is growing at over 6%. Sorry, but I am really confused and get the feeling that TRUTH is being stretched a bit in both directions.

Juggernaut x2's picture

Sub-7% growth for the Chinks is pretty tepid- similar to 1-2% growth in US-  it's kind of like you are jerking off the dog to feed the cat.

Wood_Vlogs's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do. www.jobproplan.com

Fartboxbuffet's picture

You got one of them gay webcams dont you ass pirate

lenz3099's picture

i think that means no one is buying thier bullshit.

roddy6667's picture

"GHOST CITIES, GHOST INVENTORY, SHADOW BANKING ISSUES, RISING CREDIT DEFAULTS,"

I see you are reading and memorizing all the American Fear Porn. Why don't you get a passport and see if somebody is feeding you a line of bullshit?

Mark Urbo's picture

China is a total "house of cards", nothing more...

Political unrest is coming after their economy collapses

Doctor of Reality's picture

When you control reality, the "news" becomes whatever you want it to become. Anything out of China should be viewed with a grain of salt. Now, the US media... they're to be trusted 100%. 

 

s/

charlewar's picture

CNBC wet their diapers reporting this...

Mark Urbo's picture

Because they are bed wetting commie globalists...

curbjob's picture

Indeed . 

These numbers are as real as a $10 Rolex on Canal Street 

Hongcha's picture

Yes.  Unless you are able to travel abroad, a privilege reserved for about .1% of the population of China, then your mind is programmed from birth by a mind-numbing cavalcade of lies, non-stop.  It's truly a breathtaking slave state, perfect in its own way and great to invest in because the PRC can write its own reality ticket and the very great majority does not even have the data or perspective necessary to compare, still less to doubt what you say.

I remember my first visit to the mainland; Beijing 2002.  The day I arrived was the 50th anniversary of the Korean War.  The West's version of the war differed, shall we say, from the party line so the PRC simply pulled the plug on all the Western media pipelines.  If you were channel-surfing you would find 7-8 identical test patterns where BBC, CNN, CNBC etc. were yestereday and would be tomorrow.

And the China media censoring is much, much more seamless and subtle now.

fattail's picture

And the China media censoring is much, much more seamless and subtle now.  

Mr. Zuckerberg and Mr. Brin were only to happy to violate a bunch of third world peasants basic human rights of access to information and free expression.

Whenever someone from silicon valley starts pontificating on their moral superiority, its always nice to remember that they have no moral core and are sellouts of the highest order.

order66's picture

Oh look more fake numbers from China.

One big debt bomb there.

GestaltNine's picture

Good news everyone!!! it seems China has bounced back! 

bogdan11's picture

Only a 0.1% beat on GDP from the surprising great economic data ? Sorry but the numbers don't add up. Maybe they should ''seasonally adjust'' more that GDP number to mach the other ''surprisingly good'' numbers.

VW Nerd's picture

Trump's trade embargos and exchange controls are working great!  China, India and Africa make up something like 2/3 of the world's consumers.  All have growing GDP.   Xi is probably smiling...

DaBears's picture

Just look at ATH weekly for the past year on Wall street, according to Chinese cooking, that's above 10% PuPu "GDP" platter.

Schmuck Raker's picture

Pritchard 'gracing' a ZH article is kind of... creepy.

truthseeker47's picture

Nice data but really, who in the world believes economic data from the Chinese government?

zzzz88's picture

who cares china? 

we need take care of our own business.

look at all the rigged and fraud data published here

DaveA's picture

Remember, China has factory prisons to employ thieves, drug dealers, and governors who don't report at least 7% annual growth. So far, no province has ever failed to achieve 7% growth!

roddy6667's picture

If you ever came over here and looked around, you wouldn't doubt 7%. Not every country is failing like America.

Iskiab's picture

I don't think people realize how culturally different China is to the west.

I knew someone who worked at Nokia in their finance department. Their boss got her to lie on the financial reports and overstate earnings. At first it was a little, but as the reality wasn't pleasant, they just kept on reporting positive numbers. By the end the reports were double reality.

Nokia at the time wasn't doing well except in China. It ended when they got purchased, and the news never got out.

My point is in Chinese culture, if people expect good news, or if good news is good for your boss, you will get good news. You have to take that into account with any numbers out of China, and I wouldn't trust any numbers unless you audit them yourself.

Last of the Middle Class's picture

The economic data sounds better than all of the "empty city construction stimulation" of the economy. /i  (irony)

DelusionsCrowded's picture

In maybe not surprising if the money that has been exiting China is now forced to make value inside the country through investment . With an extremely well educated workforce young entrepreneurs and capital an the new moon shot .