FXStreet (Bali) - Jo Masters, Senior Economist at ANZ, and the rest of the Research Team at ANZ, outline the new emerging drivers of growth in China, comprised by the services sector and internal consumption.
Key Quotes
"There seemed to be something for everyone in China’s third quarter GDP data reported yesterday, which slightly beat expectations at 6.9% y/y."
"Many believe actual growth is slower than this, but perhaps what this misses is some of the new emerging drivers of growth, with old indicators tending to miss the evolving nature of the Chinese economy."
"The improvers in the third quarter were the services sector and internal retail consumption. This was in sharp contrast to the industrial sector, which is on a weakening trajectory due to lower export demand and declining fixed asset investment."
"Indeed, fixed asset investment grew at 10.3% y/y, below the government’s annual target of 15%. Retail sales growth continued to edge up to 10.9% y/y and services grew at 8.6% y/y (up from 8.3% in the first half of 2015). How these trends evolve have important implications for Australian businesses and exporters."
"New opportunities are likely to emerge for businesses everywhere as the discretionary spending power of China’s middle class rises."
"In recent decades, it has been commodity producers and participants in the global supply chain that have benefited the most from China’s expansion, but the next wave of opportunity lies with service providers, especially in tourism, education, financial services and health care, as well as consumer products as opposed to base commodities."
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