China Center Data Flash: NPC steps up policy response as growth sags further

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

• Recent National People's Congress statements essentially admit to a lower growth rate that will require an even higher rate of credit creation to achieve.
• In the absence of good data, the recent topsy-turvy policy responses from the Central Bank serve to reveal the severity of the situation.
• While Q1 will undoubtedly disappoint, Q2 may strengthen a little in response to stepped-up local government investment activity.
• But overall malaise and economic imbalances are set to worsen in 2016, so we expect no significant structural improvement until essential problems get addressed.