As a confirmation of a significant downward adjustment to China's growth (discussed here), a battery of economic reports this morning all came in materially below expectations.
1. Fixed asset investment:
2. Industrial production:
3. Retail sales:
Clearly there is a seasonal component to these indicators, which may have been impacted by the New Year's holiday. But on a year-over-year basis much of that should have been reflected in the forecasts.
BW: - “The fairly dramatic slowdown is unusual in Chinese economic history of the last decade” and the figures were “shockingly weak,” said Dariusz Kowalczyk, senior economist and strategist at Credit Agricole CIB in Hong Kong. “It points to a major deceleration of momentum in the beginning of 2014,” wrote Kowalczyk in a research note.Not surprisingly, over the past few days the equity market has been reflecting these worsening fundamentals.
|Large cap PRC equities ETF (ticker: FXI) - down 6% in 5 days|
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