China's GDP Beat Hides A Widening Gap
China's economy grew 4.5% this quarter compared to last year. That beat the forecast of 4.4%, and it's higher than last quarter's 4.3%, which was the weakest number in over three years.
On the surface, that looks like good news.
But here's what's hiding underneath that number.
Investment in things like factories and buildings fell 7.2% over the past nine months. Investment in real estate specifically dropped 20.6% in that same time. Almost all of the growth came from one place, exports. China sold $938 billion more to other countries than it bought, and that number could pass $1 trillion once next month's data comes in.
I think that's the real story here.
One report today said it clearly, strong exports are covering up weak spending at home. Two very different pictures living inside the same headline number.
It's worth giving credit where it's due too, though.
Spending by regular people actually came in much higher than expected, up 1.1% compared to a forecast of just 0.6%. That's almost double what people thought would happen. So it's not fair to say the whole domestic economy is struggling.
It's also worth looking at the bigger picture.
Full-year growth is still expected to land around 4.5% for this year, down from 5% last year, and it's expected to slow further to 4.4% next year. Today's good number is one strong quarter inside a slower, longer trend. It doesn't reverse that trend.
I'm not saying today's number is fake or bad, honestly. Beating a forecast is still beating a forecast, and it takes some pressure off the government to roll out big stimulus right now.
Just worth remembering, "China beat its GDP forecast" and "China's economy at home is healthy" are two different statements. Today's numbers only really back up the first one.
#ChinaGDP #Write2Earrn #JapanFSAPublishesOnChainFinanceForumMinutes #BankOfRussiaSaysSelfCustodyBanStartsJuly2027
China's economy grew 4.5% this quarter compared to last year. That beat the forecast of 4.4%, and it's higher than last quarter's 4.3%, which was the weakest number in over three years.
On the surface, that looks like good news.
But here's what's hiding underneath that number.
Investment in things like factories and buildings fell 7.2% over the past nine months. Investment in real estate specifically dropped 20.6% in that same time. Almost all of the growth came from one place, exports. China sold $938 billion more to other countries than it bought, and that number could pass $1 trillion once next month's data comes in.
I think that's the real story here.
One report today said it clearly, strong exports are covering up weak spending at home. Two very different pictures living inside the same headline number.
It's worth giving credit where it's due too, though.
Spending by regular people actually came in much higher than expected, up 1.1% compared to a forecast of just 0.6%. That's almost double what people thought would happen. So it's not fair to say the whole domestic economy is struggling.
It's also worth looking at the bigger picture.
Full-year growth is still expected to land around 4.5% for this year, down from 5% last year, and it's expected to slow further to 4.4% next year. Today's good number is one strong quarter inside a slower, longer trend. It doesn't reverse that trend.
I'm not saying today's number is fake or bad, honestly. Beating a forecast is still beating a forecast, and it takes some pressure off the government to roll out big stimulus right now.
Just worth remembering, "China beat its GDP forecast" and "China's economy at home is healthy" are two different statements. Today's numbers only really back up the first one.
#ChinaGDP #Write2Earrn #JapanFSAPublishesOnChainFinanceForumMinutes #BankOfRussiaSaysSelfCustodyBanStartsJuly2027