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China Center Data Flash: Momentum is weak as China enters 2016
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Publication Date:
February 2016
Data Flash is a brief interpretive summary of China’s official monthly economic data release.
- Investment and policy stasis ahead of March NPC is set to yield a very weak Q1.
- A rather significant RMB devaluation, possibly to 6.9 USD-RMB, is considered very likely over the quarter to enable the PBoC to regain control of monetary policy.
- In the wake of devaluation, “overshoot” dynamics in terms of sentiment toward the economy are likely to play out. MNCs should be aware of this phenomenon, and not get distracted.
- From Q2 on, growth is likely to stabilize as policy measures kick in, especially enhanced fiscal spending; however, a significant acceleration of momentum is unlikely.
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