The China data continues to have something for everyone. Annualised GDP growth (red) and QoQ were poor, but somewhat above fairly bearish predictions.
YoY macro data (IP, retail sales) are large negatives, and cumulative YoY measures are not so bad, reflecting the various impacts of base effects and COVID impacts.
The headline, is effectively unchanged, as ever.
FAI investment is the only thing holding the house of cards up, at this stage. It is the same strategy as always, and remains eminently unsustainable.
Longer run, the over-reliance on investment orientated growth, at the expense of domestic consumption, leads to resource misallocation, unproductive investment, and at some point, a debt crisis (which we thought was playing out now in the property sector, but isn’t really leading to anything) which is bearish for commodities (we are not believers in the commodity super-cycle story).
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