Pantheon with the wrap.
China has been a two-speed economy for much of this year, with domestic demand suppressed by zero-Covid policy and the property sector malaise, while output was cushioned by export demand and stimulus via infrastructure and manufacturing fixed asset investment. October saw a broad slowdown, as even the previous growth drivers weakened. Exports fell 0.5% y/y, the first decline since May 2020, as global demand ebbed.
Government stimulus was temporarily disrupted by the 20th Party Congress, as top regional officials decamped for Beijing and lower-level officials couldn’t obtain sign-offs for new funding disbursements or project approvals. This showed up in the dip in infrastructure fixed asset investment growth to 12.9% y/y in October, from 16.3% in September, confirming our view that the drop in long-term corporate loans and government bond issuance was a result of Congress disruptions. Manufacturing investment also grew more slowly, for similar reasons.
