ZEW: Expectations for Chinese Economy Rise for the Third Consecutive Time

Date

25 Apr 2017

Sections

Euro & Finance

Press release

Expectations for Chinese Economy Rise for the Third Consecutive Time

According to the current survey for April (5 April – 19 April 2017), the
economic outlook for China has improved by 3.2 points. The CEP Indicator,
which reflects the expectations of international financial market experts
regarding China’s macroeconomic development over the coming twelve months,
is currently at 17.7 points (March 2017: 14.2 points). This is the third
consecutive time that the indicator rises. As a result, the CEP Indicator
has now significantly exceeded the long-term average of 5.4 points. Due to
this development, the highest level recorded since the introduction of the
survey (21.4 points in June 2014) seems to be within reach.

The assessment of the current economic situation has improved considerably
by 14.3 points and now stands at 17.6 points. This is the most positive
assessment of the economic situation since the introduction of the survey
in July 2013.

The point forecasts have also improved. For instance, the forecast for the
second quarter of 2017 has increased from 6.6 per cent to 6.7 per cent. For
the whole of 2017, the respondents expect an average growth in China's
gross domestic product of 6.6 per cent. For 2018, experts forecast an
average growth of 6.5 per cent. For both forecasts this constitutes an
increase of 0.1 percentage points compared to the previous survey (March
2017).

Domestic consumption – one of the main drivers of growth – should benefit
from a significant expected increase in employment. According to the
financial experts, foreign trade is also likely to improve again.
In terms of the various sectors, high hopes rest on the information
technology sector as well as on insurance companies and investment banks.
The automotive and the construction sectors as well as consumer-oriented
sectors are also viewed very positively.

"Given the current forecasts and expectations, we could see the Chinese
economy move back into calmer waters with a return to the usual high growth
rates," says Dr. Michael Schröder, Senior Researcher in the ZEW Research
Department "International Finance and Financial Management" and project
leader of the CEP survey.

For more information please contact:
Dr. Michael Schröder, Phone +49(0)621/1235-368, E-mail schroeder@zew.de