UBS Says Beijing’s got it right on China GDP growth

(From Forbes)

By Kenneth Rapoza

Come to find out, China’s economy is not in the toilet. If you believe UBS, fourth quarter GDP should come in at 6.9%. Not bad. And far from the 2% growth some uber-bears keep warning about.

China construction

China construction

“I hear a lot of people saying China’s manufacturing sector is dying and how they’re not players anymore,” says Patrick Van Den Bossche, a partner at A.T. Kearney. He was visiting private Chinese companies this past spring. Is all hell breaking loose? “My response to those who are forecasting the death of the Chinese manufacturer…wait two or three years. It’ll be a much different story,” he says about Chinese firms automating and quickly moving up the value chain to take on Western rivals in Asia.

China’s year-end GDP should come just around 7%, UBS forecast on Monday, putting it in line with official Beijing’s thinking.

“November’s economic data confirms that China’s real economy is stabilizing tentatively at low levels, but the continued worsening of construction activity means that we are far from seeing a fundamentals-driven rebound,” said the report.

China’s November data was better than expected, with an increase in infrastructure investment, steady consumer consumption and manufacturing on the rise.

Infrastructure investment rose by 18.2% year-over-year in the first 11 months of 2015, 0.8% percentage points higher than the Jan-Oct period.

Retail sales rose 11.2% annually in November, the highest monthly growth rate this year. Value-added industrial output grew 6.2% last month, up from 5.6% in October. Read more



Categories: Asia Unhedged, China

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