China: More easing to support growth stabilisation

The latest economic data point to continued soft growth into the second quarter, reflecting sluggish domestic as well as external demand. Fixed asset investment growth slowed more than expected to 11.4% YTD in May, a 14-year low. 

The downward trend remains led by decelerating property investment and slower manufacturing investment, which is more than offseting strong infrastructure investment. Weak domestic demand has also hit imports, which contracted by 18% y/y in May amid falling imports of major commodities.

Exports in May also fell for a third month, though the rate of decline slowed to -2.5% y/y. Nevertheless, there are emerging signs of a near-term growth stabilisation, says Barclays.