ZEW: Weaker Business Expectations for Chinese Economy

Date

24 Jan 2017

Sections

Euro & Finance

Press release

In the most recent January survey (conducted between 3 and 17 January
2017), business expectations for China have declined. The CEP Indicator,
which reflects the expectations of international financial market experts
regarding China’s macroeconomic development over the coming twelve months,
has dropped by 10.9 points compared to November 2016 to a current total of
minus 5.9 points. This falls far below the current long-term average of 5.1
points. The assessment of the current economic situation is, however, more
positive; at 2.4 points, the corresponding indicator is currently 7.6
points higher compared to November 2016.

A growth rate of 6.5 per cent is currently being predicted for the current
year of 2017. This would constitute a decline of 0.2 percentage points
compared to the recently published official growth figures for 2016, which
record a 6.7 per cent increase in the GDP. A further reduction in the
annual growth rate by 0.1 percentage points down to 6.4 per cent is
expected in 2018.

Although business expectations continued to fluctuate quite markedly over
the past year, a downward trend in the responses is nevertheless
distinguishable. This trend is reflected in the point forecasts. However,
the surveyed experts do not currently seem to see any greater dangers to
the Chinese economy, for example resulting from a possible decline in
exports. The majority of experts continue to predict an increase in exports
over the next six months, and even a greater share of world trade for
China. Buoyed by healthy domestic consumption, imports are also expected to
continue to increase. The current mood among experts thus seems to be
"business as usual".

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

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