China Center Data Flash: Growth continued weakening in August

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

• For the second consecutive month, nearly all monthly indicators dipped in August -- Industrial Production (IP), Fixed Asset Investment (FAI), retail sales, and exports/imports.
• Credit growth was strong. After the rapid expansion in short-term household loans since March, loan growth in this area may be checked in the coming months, given the reported government guidance calling on banks to tighten consumer lending to choke money flowing into the overheated housing market.
• Regarding the housing market, growth in sales and prices continued to cool in August. As of late September, at least six cites announced administrative constraints to tamp down their respective housing markets. This indicates that regulators are dissatisfied with progress in reining in real estate risks.
• Export growth slowed in August, which might be related to the quick strengthening of the RMB in July and into August. However, stable growth in the US and Europe should yield continued stability in Chinese exports in the near term.