Economic Outlook for China Set to Remain Largely Stable

In the most recent survey conducted in January (2–11 January 2018), expectations for the Chinese economy have improved again, rising to 1.1 points. In December, the indicator was still as low as minus 10.7 points. Nevertheless, the CEP Indicator, which reflects the expectations of international financial market experts regarding China’s macroeconomic development over the coming twelve months, is still below the long-term average of 5.0 points. The survey does, however, not reveal a downward trend in expectations. Instead, since around 2014, expectations have been seen to fluctuate around a relatively constant average value.

The point forecasts for Chinese gross domestic product (GDP) growth show a slight downward correction. According to the predictions, real GDP is expected to grow by 6.6 per cent in 2018, which is 0.1 percentage points less than in the previous month. The current forecast for GDP growth in 2019 is 6.5 per cent.

The assessment of the economic development of each industry in China for the coming twelve months has remained largely unchanged compared to the previous month. Thereby, the top-performers are the information technology/telecommunication sector, service providers and insurance companies, with the majority of the surveyed experts expecting their economic development to improve considerably. By contrast, the industries which are expected to perform worst are the mechanical engineering, retail banking and construction sector, with the latter, however, being the only sector which is not expected to see any positive development over the coming twelve months. Doing "bad" in this case is synonymous with doing "less good" than the other industries included in the survey.

For 2018, Shenzhen is regarded to have by far the best development prospects among China’s most important economic regions. Only for Hong Kong, prospects are slightly negative. All other regions are expected to “improve slightly”, according to the majority of the surveyed experts.

“The most recent survey results thus continue to paint a fairly positive view of China’s further economic development,” says Dr. Michael Schröder, senior researcher in the ZEW Research Department “International Finance and Financial Management” and head of the CEP survey project. 

For more information please contact

Dr. Michael Schröder, Phone: +49 (0)621/1235-368, E-mail michael.schroeder@zew.de