China Center Data Flash: Marginal slowdown in trend growth anticipated for 2018

Data Flash is a brief interpretive summary of China’s official monthly economic data release.

• Loan growth is beginning to slow down, with new loan growth in October down due to weakening growth in household loans. Moreover, the more significant corporate loan growth reported in the first 10 months of 2017 was not all due to increased lending, but rather to the shifting of certain off-balance sheet assets – specifically, a portion of outstanding wealth management products – onto bank balance sheets. This explains why fixed asset investment (FAI) growth did not increase commensurate with the strong corporate loan growth reported in the first 10 months.
• The housing sales cooldown continues. A sharp price correction nationwide remains unlikely in the near term, as the government can regulate both land and mortgage supply, as well as impose administrative controls on sales.
• Industrial production growth turned lower in October. This is likely related to the reported forced factory closures to reduce pollution emissions during the winter heating season.