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Forex: Investors decipher Chinese economic signals – Capital Economics

By FXstreet.com,  September 14, 2012, 02:51:00 PM EDT

FXstreet.com (San Francisco) - Many investors have seen signs in yesterday's stronger-than-expected Chinese loan numbers - the pick-up in medium and long-term lending in particular that corporate investment is now turning around. In fact though, most of the step up in long-term lending was due to increased demand from households (mortgages, presumably) rather than firms.

"In additional Chinese Infrastructure investment is picking up, however this is being offset by the weakness of demand elsewhere." Writes Mike Williams, Chief Asian Economist at Capital Economics.

Recent comments from Premier Wen Jiabao have also further fuelled stimulus talk. Wen said that the government would draw on its RMB100B stabilization fund if necessary to support the economy. This might help "fine tune" growth as Wen himself put it but the impact would be small - the sum is equivalent to just 0.2% of GDP. Wen also noted that China's economic performance and its fiscal spending so far in 2012 are in line with expectations at the beginning of the year.




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Forex and Currencies

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