Slight Decline of the Economic Expectations for China

After an interim improvement in November, the economic expectations for China slightly declined again towards the end of the year 2014. The CEP Indicator, which reflects expectations of international financial experts regarding China's macroeconomic development over the next twelve months, decreased from 9.8 to 6.6 points in the current survey period (Dec 4-31, 2014). The indicator remains in positive realm but ranks below its long-term average of 13.2 points.

The analysts' mean forecast of the year-over-year growth rate of the Chinese GDP in 2015 is 7.2 per cent. This slightly falls short of their average projection for the final quarter of 2014 and also the first quarter of 2015, which is currently at 7.3 per cent each. At the same time, the experts see some positive impetus. As an effect of a slightly devaluating Yuan, Chinese exports and inland foreign direct investments are expected to grow at accelerated pace in the course of the next six months. The recent strong rise of share prices at the Shanghai stock exchange may also maintain. Sales expectations for finance-related industries, such as Investment Banking and Private Banking, increased considerably. Concurrently the persistent stock price rally ever since the opening of the Shanghai Stock Exchange for foreigners in mid-November 2014 has led market uncertainty to new highs: the corresponding indicator, which reflects the CEP analysts' assessments that the chance of a substantial change in the SSE Composite Index of at least 20 percent in both possible directions within three months is higher than normal, rose by 13.5 to 36.1 points compared to the previous month. That is the highest value since the start of the survey.

For further information please contact

Dr. Oliver Lerbs, phone 0621 / 1235-147, E-Mail lerbs@zew.de

Prof. Dr. Michael Schröder, phone 0621 / 1235-140, E-Mail schroeder@zew.de