When looking at forecasts for China’s GDP growth it’s best to ignore the projection itself and focus on the direction of the revision.
That is, there’s still a certain degree to which the sellside has to retain some semblance of politeness when it comes to estimating Chinese output and indeed, even if some trailblazing research team were to decide to break decorum and officially cut estimates to between 0% and 4% (which probably represents a more accurate estimation of how the economy is actually performing) it would be largely pointless because there’s exactly zero chance of the NBS admitting anything like that. Given that, it’s not so much about whether the number is 6.8% or 6.7 or 6.6%, it’s about whether analysts see continued downside risks on the horizon.
With that in mind, and against the backdrop of the worst FAI growth in 15 years, we bring you the following excerpts from Barclays where the EM research team has cut its estimates for Chinese GDP growth in 2015/2016 (note the expectations for monetary policy and the bit about equity and FX turmoil weighing on sentiment).
This post was published at Zero Hedge on 09/14/2015.