China Growth Tracker: Is Beijing’s Plan to Boost the Economy Working? 

We published a note on how to track Chinese growth in real time using financial and commodity market prices. In these weekly reports, we update the indicators to help us track growth.  

Summary 

• Our high-frequency China growth tracker has picked up since last week on stronger domestic road congestion data, particularly in Beijing, Shanghai and Guangzhou. We also see prices of economically sensitive commodities like iron ore continue to rise, as is the Baltic Dry index.   
• Our economic data index, which looks at the latest data releases out of China, continues to fall, pulled down by the weaker-than-expected services PMIs this month. This morning, Chinese retail sales data and industrial production data surprised to the upside, so we may be seeing a short-term bounce in the data following further efforts by Beijing to stabilise the economy.  

Chinese Hard Data Rebounds 

This morning’s strong manufacturing data should be no surprise given the improvement of manufacturing PMIs. The stabilization of high-tech sector (50% for exports) is a good sign, but still at a very low level. Overall, we can say that the supply side has improved, but the demand side has not yet improved. 

A breakdown of the retail sales figures shows strong restaurant spending, which grew by 8.4% y/y (highest since March 2022, falling spending on big items, cars & fuel 5.2% vs 6.3% in July despite rising petrol prices, and a further slump in housing-related spending at -9% y/y (lowest since 2021). 

Bilal Hafeez is the CEO and Editor of Macro Hive. He spent over twenty years doing research at big banks – JPMorgan, Deutsche Bank, and Nomura, where he had various “Global Head” roles and did FX, rates and cross-markets research.

Ben Ford is Researcher at Macro Hive. Ben studied BSc Financial Mathematics at Cardiff University and MSc Finance at Cass Business School, his dissertations were on the tails of GARCH volatility models, and foreign exchange investment strategies during crises, respectively.

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