Why the Chinese recovery will slow – some lessons from sectoral data

Abstract

The outlook for economic growth in China remains highly uncertain and dependent on factors such as domestic economic policy and recovery in external demand. We attempt to assess China’s short-term growth outlook with readily available monthly sectoral data of supply-side and demand-side indicators. We also discuss well-known issues surrounding Chinese data and potential pitfalls to medium-to-long-term growth. We conclude that China may well deliver a V-shaped recovery over the very short-term, while long-term growth is likely to be significantly lower than previously anticipated.