China GDP good, investment not so much

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China’s December QTR GDP is out and slightly missed consensus of 2.2% coming in at 2%, actually down from the September QTR which was revised down 1bps to 2.1%

Somehow, however, this added up to a beat for year on year GDP, which came it 7.9% versus 7.8% expected. There must be some revisions somewhere that I’m missing unless it’s 1.3 billion people that can’t count.

To the components, and Industrial Production was also a slight beat, in at 10.3% versus 10.2% expected, easing its recent pace of recovery.

The all important fixed asset investment missed slightly, in at 20.6% versus 20.7% expected and is showing unsettling signs of topping out its recovery already.

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Finally, retail sales beat slightly, arriving at 15.2% versus 15.1% expected and look in a robust upturn.

All in all, this is a pretty decent report for the world with some rebalancing apparent but pretty lackluster report vis-a-vis Australia. China is recovering steadily but not in away that suggests we are about to benefit. To the contrary.

The dollar initially spiked 20 pips on the releases and has fallen straight back and kept going down. I’m not surprised. This report makes the iron ore rally look more than a little isolated.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.