Chinase economy indicates early signs of stabilization

The real economy of China showed pockets of strength in May, although overall growth momentum remained soft. Growth in exports and imports continued to disappoint. Real activity data is mixed, and GDP growth expected to decelerate to 6.7% y/y in Q2, but there are increasing signs of stabilisation, and recover moderately in H2, states Standard Chartered.

• Both the official and HSBC manufacturing PMIs improved in May, with the official index remaining above 50 for the third consecutive month.
  
  
• Industrial production (IP) growth inched up to 6.1% y/y in May, accelerating for the second consecutive month.
  
  
• Single-month fixed asset investment (FAI) growth rose to 9.9% y/y in May from 9.6% in April; property investment grew 2.4% y/y in May, up from 0.5% y/y in April, notes Standard Chartered. 
  
  
• Single-month commodity house sales rose 15% y/y, versus 7.0% in April and -9.4% in Q1. This was likely the result of policies to support propertydemand, including the loosening of mortgage policy.
  
  
• Retail sales grew 10.2% y/y in real terms in May, 0.3ppt higher than in April.