China Center Data Flash: June data beats expectations, but marginal slowdown still likely in 2H

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

• The marginal growth rebound posted in 1H is considered cyclical. An uptick in exports, the resilience in consumption growth, and tailwinds from the subsiding housing market boom and infrastructure spending have fueled the continuation of growth thus far into 2H.
• Housing sales bounced back in June, but this is unlikely to last. Price growth is still weakening in the largest cities. Investment growth in real estate development is falling for the second consecutive month.
• Industrial Production (IP) picked up in June. The latest PPI and inventory data suggests that the anticipated deceleration in IP growth may be a bit farther off than we expected.
• Export growth continues to recover—a function of strengthening economic performance in the United States and Europe—and its contribution to GDP growth which turned from negative last year to positive so far this year. 

China Center Chart Dive: China’s labor compensation share of GDP