Chinese rebalancing continuing

by Chris Becker

Data for May has just been released and rebalancing is underway.

From Bloomberg:

China’s industrial output rose 8.8 percent in May from a year earlier and retail sales gained 12.5 percent, the National Bureau of Statistics said on its website today.

Fixed-asset investment excluding rural households increased 17.2 percent in the first five months of the year, the Beijing-based agency said.

As David Scutt at marketscuttlebutt notes (especially for those cynical about official GDP figures) electricity production is up 5.9% year on year:

Retail Sales smashed expectations, rising +12.5% from +11.9% in April.

Industrial production came in at +8.8%, in line with expectations and ahead of the +8.7% pace in April.

Fixed-asset investment, still the largest contributor to Chinese growth, came in at +17.2%, once again in line with expectations but below the +17.3% rate of April.

Either the government is achieving their goal of switching from investment-led to consumption-based growth or the data is designed to reflect this is occurring.

Indeed – with output like this, there’s little to no chance any large scale stimulus measures soon, with Premier Li Keqiang on record on China National Ratio this week stating re-balancing of the economy is the path forward.