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The National Australia Bank (NAB) analysts offer a quick glance at the Chinese economic situation following the disappointing activity numbers reported earlier today.

Key Quotes:

“A broad range of China’s economic indicators – including industrial production, fixed-asset investment and retail sales – were softer in July, following a surprise pickup in June. A trend across these two months points to a continued gradual slowdown, even before the next phase of US tariffs (and China’s retaliatory measures in response).

For now, our growth forecasts remain unchanged, at 6.25% yoy in 2019, 6.0% in 2020 and 5.8% in 2021 –  on the assumption of a domestic policy response, however, the deteriorating US-China trade relationship continues to highlight downside risk.

 Following a surprise upturn in June, China’s industrial production growth slowed significantly in July – increasing by 4.8% yoy (compared with 6.3% previously). China’s major manufacturing surveys were less negative in July, but both surveys continue to point to negative trends in export orders.”