With every investment bank and his dog expecting an H2 rebound in Chinese growth (for no apparent reason given the credit rebound has been literally Shanghaied by the stock market bail out), it is interesting to note a Chinese investment banks that expecting further deceleration instead. Form CICC:
We expect GDP growth of 6.5% YoY in 3Q15, down from 7% YoY in 2Q15. On a sequential, seasonally adjusted basis, we expect 3Q GDP growth to decelerate to 5.9% following the brief rebound to 7.8% QoQ, annualized in 2Q15. On the sector level, we will likely see the most notable deceleration in financial sector growth, followed by slower output growth of the manufacturing sector. From the demand perspective, investment and external demand are likely to show the most notable slowdown1 . Apart from weaker global demand, higher investment risk premium since July may have contributed to the drop in investment growth. GDP deflator may revive moderately to 0% YoY in 3Q15 from 0.1% YoY in 2Q, reflecting disinflation in the financial sector and further deflation in the manufacturing sector, while food and property prices edged up in 3Q.
► September Industrial production (IP) growth may decelerate to 5.5% YoY, from 6.1% YoY in August. This forecast has already factored in a mild sequential uptick from the August low of -0.6% MoM, seasonally adjusted, but the overall trend in IP remains anemic. Weak growth momentum in September is mainly driven by lower investment appetite and shrinking export demand, but is also exacerbated by the working day effect: there is one less working day in September 2015 due to the military parade on September 3.
