From Reuters:
China’s economic growth could slow to between 6.9 percent and 7.1 percent this year as the country fends off deflation risks, the head of the Chinese central bank’s research bureau said on Tuesday.
In an opinion piece in the China Daily newspaper, Lu Lei said fixed asset investment growth in the world’s second-largest economy is likely to cool further this year, dragged by a sagging property market and a fall-off in state investment.
“China’s economic growth rate may remain stable at a relatively lower level in 2015, between 6.9 percent and 7.1 percent, restricted by sluggish demand,” Lu wrote.
“The biggest medium-term uncertainty for the economy is deflation risk.”
Judging that “it is difficult to anticipate any rise in the producer price index” partly because manufacturers are still struggling to deplete a glut in raw materials, Lu forecast that China’s consumer inflation would also likely stay weak in 2015.
And there you have it. 7% growth (probably a bit lower) but a growth composition that is far less favourable to commodities than in the past. The next time Glenn Stevens mumbles about about 7% growth in China perhaps a journalist can ask him about the shift in composition.
Some more below on the “sagging” property market, from Investing in Chinese Stocks:
Many headlines focused on the year-on-year price drop, but since a) prices are still falling and b) the peak was May to July 2014, this isn’t surprising. The two important revelations in the data are that home prices did not rebound in January. The average price decline month-on-month was 0.43%, slightly more than the 0.40% decline in December. Nationally, the recovery stalled. Second, there is more bifurcation in the market. First-tier new and existing home prices increased or held steady in many cases, with declines limited to a drop of about 0.1%. In real estate, price follows sales and we’ve been seeing sales increase in first-tier cities in recent months, now prices are stabilizing. New home prices are down 5.1% yoy.
Since 2010, average prices are up 8.2% nationally.
March: 4 cities saw declines in price mom, 10 cities were flat, 56 were up.
April: 8 cities saw declines in price mom, 18 cities were flat, 44 were up.
May: 35 cities saw declines in price mom, 20 cities were flat, 15 were up.
June: 55 cities saw declines in price mom, 7 cities were flat, 8 were up.
July: 64 cities saw declines in price mom, 4 cities were flat, 2 were up.
August: 68 cities saw declines in price mom, 1 city was flat, 1 was up.
September: 69 cities saw declines in price mom, 1 city was flat, 0 were up.
October: 69 cities saw declines in price mom, 1 city was flat, 0 were up.
November: 67 cities saw declines in price mom, 3 cities were flat, 0 were up.
December: 65 cities saw declines in price mom, 4 cities were flat, 1 was up.
January 2015: 65 cities saw declines in price mom, 3 cities were flat, 2 were upExisting home prices were stronger than new home prices again in January. The decline was to 0.36%, slightly ahead of December’s 0.32% mom decline. Prices are down 4.4% yoy. Since 2010, existing homes have only risen an average of 2.4%. Of the 70 cities tracked by the National Bureau of Statistics, 26 have existing homes prices below 2010 levels.
70 city new home price changes by market segment: below 90 sqm prices fell 0.42% mom; 90-144 sqm prices fell 0.46%; above 144 sqm prices fell 0.57%. The trend is the same for yoy and prices gains since 2010, with large homes only up an average of 6.1% since 2010 versus 10.4% for houses smaller than 90 sqm.
70 city existing home price changes by market segment: below 90 sqm prices fell 0.36% mom; 90-144 sqm prices fell 0.33%; above 144 sqm prices fell 0.39%. Notably, existing homes larger than 144 sqm are down 0.27% on average since 2010. Full report: 2015年1月份70个大中城市住宅销售价格变动情况
Below are new home price changes, sorted by one Year change.
1 Month 1 Year Since 2010 Hangzhou -0.30% -10.10% -7.90% Shenyang -0.40% -8.40% 10.10% Shaoguan -0.70% -8.00% 4.60% Guilin -0.40% -8.00% 9.60% Dandong -1.60% -7.90% 8.70% Quanzhou -1.60% -7.70% 0.30% Luzhou -0.60% -7.70% 5.00% Changsha -0.30% -7.60% 13.30% Qingdao -0.60% -7.30% 2.30% Dalian -0.60% -7.20% 9.50% Jinzhou -0.90% -7.00% 8.50% Fuzhou -0.50% -6.50% 12.20% Baotou -1.10% -6.50% 5.70% Bengbu -0.50% -6.40% 1.80% Anqing -0.20% -6.10% 3.00% Chongqing -0.40% -6.00% 7.50% Huizhou -0.30% -6.00% 7.80% Hohhot -0.40% -5.90% 8.50% Ningbo -0.20% -5.90% -5.60% Yangzhou -0.60% -5.90% 5.30% Ganzhou 0.20% -5.90% 8.20% Nanchong -0.40% -5.90% 5.90% Yantai -0.60% -5.80% 5.90% Zhangjiang -0.40% -5.80% 11.20% Haikou -0.50% -5.60% -1.70% Qinhuangdao -0.70% -5.60% 8.90% Jinhua -0.40% -5.60% -1.50% Chengdu -0.30% -5.50% 7.70% Jiujiang -1.00% -5.50% 4.00% Xiangyang -0.30% -5.50% 9.10% Nanchang 0.00% -5.40% 11.90% Guangzhou 0.00% -5.40% 22.00% Beihai -0.80% -5.40% 6.30% Yichang -0.20% -5.30% 9.20% Luoyang -0.60% -5.20% 10.60% Nanning -0.30% -5.10% 6.80% Wuxi -0.60% -4.90% 2.10% Pingdingshan -0.60% -4.90% 9.40% Sanya -0.50% -4.90% 1.50% Jilin -0.40% -4.80% 9.80% Taiyuan -0.30% -4.70% 10.20% Harbin -0.60% -4.70% 9.10% Jinan -0.30% -4.70% 8.20% Kunming -0.20% -4.60% 9.10% Xuzhou -0.40% -4.60% 8.20% Wuhan -0.10% -4.50% 11.10% Urumqi -0.40% -4.50% 18.60% Changde -0.80% -4.50% 7.80% Changchun -0.20% -4.40% 8.70% Xi’an -0.50% -4.30% 11.10% Shanghai 0.00% -4.20% 15.80% Tangshan -0.70% -4.10% -0.60% Zunyi -0.80% -4.10% 8.90% Shijiazhuang -0.10% -3.90% 15.70% Xining -0.80% -3.80% 16.70% Yinchuan -0.30% -3.70% 10.50% Dali -0.40% -3.70% 3.30% Tianjin -0.20% -3.60% 8.30% Wenzhou -0.60% -3.60% -23.00% Jining -0.20% -3.60% 9.50% Lanzhou -0.40% -3.50% 12.00% Beijing -0.10% -3.20% 17.60% Guiyang -0.30% -3.20% 10.10% Mudanjiang -0.40% -3.10% 9.80% Yueyang -0.20% -2.70% 11.30% Nanjing 0.00% -2.40% 10.50% Hefei -0.20% -2.40% 10.70% Shenzhen 0.30% -1.30% 23.90% Zhengzhou -0.30% -0.70% 19.90% Xiamen -0.10% 0.80% 26.20%
