Chinese growth powers but iron ore air pocket appears

Monday, 17 May 2021

It’s beginning to play out as expected. Chinese headline growth for April was absolutely fine with year-to-date numbers still wildly distorted but falling back to earth roughly in line with expectations. Industrial production was 9.8%, retail sales 17.7% and fixed asset investment at 19.9% from last year’s depressed levels:

At first glance, even construction sectors look good with real estate sales still wildly inflated from base effects:

But that’s where the good news ends. Floor area construction starts are down roughly 10% for the fourth month in a row from 2019 levels, let alone last year’s juiced numbers:

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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.