China blows new housing bubble to grow at all

Chinese data for June is out and is exactly as expected. Quarterly GDP snapped back 9.6% to deliver 3.2% GDP on the year:

Internals for the June month continued the recent pattern. Industrial production is rebounding fast at 4.8% year on year and -1.3% YTD. Fixed asset investment is down -3.1% YTD and retail is a disaster at -1.8% year on year and -11.4% YTD:

Turning to realty, prices are off and running at 0.6% for June, 4.9% for the year and climbing:

Gains are widespread across demographic:

And geography:

This led starts to take off, the highest ever in June for empty apartments:

With floor area under construction lifting to 2.6% YTD:

This led steel output to sustain stupid levels:

Cement came back a bit:

Meanwhile, the poor old consumer is buggered with staples booming and discretionary stuffed. Eating out appears to have died:

Power generation was 6.5% year on year so there’s something going on.  But it sure ain’t productive or adding much value for anyone but a few SOEs.

This is classic Chinese reflation using empty apartments and that’s about all.  Yet another nail into the long term Chinese imperial project.

David Llewellyn-Smith
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