Berenberg doubts China

The growth of the Gross Domestic Product (GDP) of China, the second largest world economy, slowed in the third quarter of the year to 6%, which represents the slower rate of expansion of the Asian giant since 1992.

China’s GDP registers its lowest level in the last 27 years
In addition, the data was one tenth below the forecast of 6.1% established by the market consensus in the midst of the trade war with the US. Beijing manages a growth forecast of between 6% and 6.5% for 2019, lower than the 6.5% target set for last year.

“We must be aware that, given the complicated and severe economic conditions both in the country and abroad, the slowdown in global economic growth and the increase in external instability and uncertainty, the economy is under increasing downward pressure” , warned the National Statistical Office of China.

However, even the official 6% figure has been questioned by the market. “The 6% growth gives continuity to a perfect scenario, of slow but robust deceleration and without fluctuations, which is neither a precise nor possible measure of the performance of the real economy,” argue the experts of the investment firm Berenberg. According to their assessment, “current growth is smoother than the official 6% figure.”

The monthly data for September showed an uptick in retail sales and industrial production from much weaker trends. But, in reality, they claim, China is struggling with its transition to dependence on consumption and domestic demand, an increasingly burdensome debt and a manufacturing sector weighed down by the drop in exports.

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