Independent US report points to pickup in China
Official data may lag behind findings of private survey based on Fed’s ‘Beige Book’ by one to three months
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Official data may lag behind findings of private survey based on Fed’s ‘Beige Book’ by one to three months
Bloomberg in Beijing
06 July 2012
China’s official statistics may be lagging behind independent data that show a pick-up in the world’s second-biggest economy last quarter, according to a new private survey modelled on the US Federal Reserve’s “Beige Book”.
The “China Beige Book”, in interviews of about 2,000 company executives and bankers, found retail sales and manufacturing strengthened while property sales increased and shortages of unskilled labour failed to abate. New York-based CBB International conducted the survey.
The report said four of every five retailers see higher sales in six months, a bigger proportion than in the first quarter, contrasting with government data showing the weakest non-holiday sales growth since 2006 in May. Bankers foresee growing availability of loans and 46 per cent of companies intend to borrow, “suggesting a fairly stable rise in credit demand”.
“These findings diverge considerably from the current ‘gloom and doom’ narratives,” CBB president Leland Miller and Craig Charney, director of research and polling, said. The official data probably lagged CBB’s data by one to three months and might reflect a pickup by “mid- to late summer”, they said.
The survey suggests China’s measures to reverse the deepest slowdown since 2008 may be boosting growth even as Europe’s sovereign debt crisis crimps exports. Authorities lowered interest rates last month for the first time in more than three years and have cut reserve requirements for banks three times since November while speeding approvals for investment projects.
“The economy as a whole is now strengthening modestly” and credit was “fairly loose”, Miller said. “[Quarterly] growth was particularly evident by June in consumer spending and real estate, while agriculture and mining also showed improvement.”
In the second quarterly “China Beige Book” survey, property agents reported higher second-quarter revenue doubled to almost 60 per cent, manufacturers recorded sales increased 3 percentage points to 63 per cent, and retailers with increased sales climbed 5 percentage points to 68 per cent.
Retailers expected spending to strengthen further and 71 per cent of manufacturers foresaw higher revenue in six months, the survey said, indicating a reduced need for further stimulus measures.
The data contrasted with the manufacturing purchasing managers’ index released by HSBC Holdings and Markit Economics, which fell last month to the lowest level since November, showing a contraction for an eighth straight month. It covers executives at more than 400 companies.
Some parts of the economy may have slowed further in June, based on preliminary results of analyst surveys. Growth in exports may have fallen to 10.5 per cent in June from a year earlier compared with 15.3 per cent in May, while expansion in retail sales weakened 0.4 percentage point to 13.4 per cent, according to median estimates. New yuan loans probably climbed to 900 billion yuan from 793 billion yuan in May.
The key drivers of an “upswing” in real estate were increasing sales volumes reported by 54 per cent of residential property agents and 57 per cent of commercial property agents, the “China Beige Book” said.