Lost to many given the EU circus is in town - today’s Oct Import print for China, at +28.7% Y/Y, blowing through estimates. We featured China considerably earlier in the year, highlighting the government’s ditching of the old policy of mercantilism, for one reflecting a little more care for the consumer. This is faithful to the latest 5-yr plan (2011 - 2015) aimed at boosting internal consumer demand as the main engine of growth.
We also note that consumer and producer prices are easing, throwing a bit of slack to the Bk of China. As we have stated repeatedly for the past 15 months, there will be no hard landing. The rest will come to join us in this view.
The US and China will remain the world’s two primary engines through Q1. Events in Europe, first amusing, next an irritant and now a worry, will have limited impact on both these credits.
Robert Craven
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