It was not hard to find evidence of economic weakness in China in Q1. Imports, retail spending, property sales and, of course, GDP growth all slowed. But there were glimmers of a turnaround towards the end of the quarter. Electricity output growth stabilised in March, industrial production growth picked up and, most significantly, bank lending far exceeded expectations. But a sustained economic rebound is far from assured. Risks still hang over the export and property sectors. Interbank interest rates are already rising again, signalling that March’s lending burst depleted banks’ cushion of excess reserves. Further required reserve ratio cuts are likely soon to ensure credit growth remains strong.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services