China Economic Panel (CEP) of the Centre for European Economic Research (ZEW) and Fudan University (Shanghai) - Economic Expectations for China Characterised by Uncertainty

Expectations for the Chinese economy have once again considerably worsened in November 2015. The CEP Indicator, which reflects the expectations of international financial market experts regarding China’s macroeconomic development over the coming twelve months, has deteriorated in the current survey period (November 9 – 25, 2015) to a value of minus 1.7 points. On the whole, expectations for the Chinese economy show signs of increased uncertainty. This is reflected in the indicator's volatility over the last few months; in September the CEP indicator had a value of minus 9.7 points, it returned to positive territory in October, achieving a value of 8.3 points, before falling once again to minus 1.7 points in November.

Forecast concerning the Chinese GDP remain unaffected by fluctuations in the expectations indicator, and instead clearly reflect the five-year plan of the Chinese government. For 2015, GDP is predicted to total 6.8 per cent, a slightly lower value than in the previous month. For 2016, GDP expectations remain unchanged at 6.6 per cent.

In terms of consumer prices, the expected inflation rate shows further decreases, falling to 1.6 per cent within the next three months. A price increase of 1.9 per cent is predicted within the coming twelve months.

The loss in value of the Chinese Yuan against the US Dollar is expected to result in a mid-term improvement in export revenues. Experts therefore forecast a more positive development in exports on a one-year horizon. Domestic consumption is also expected to have a positive impact on the economic development. The surveyed experts considerably increase their expectations for domestic consumption, which remains the backbone of the economic development in China.

As in the previous month, regional expectations again indicate that Tianjin will experience economic recovery. In addition, a significant improvement in economic development is expected  in Chongqing.

For further information please contact

Prof Dr Michael Schröder, Phone +49(0)621/1235-140, E-mail schroeder@zew.de