Expectations for Chinese Economy Continue to Improve

The latest survey carried out in November (14–30 November 2016) indicates that expectations for the Chinese economy continue to improve. The CEP Indicator, which reflects the expectations of international financial market experts regarding China’s macroeconomic development over the coming twelve months, has increased by 5.1 points to a current total of 5.0 points.

The indicator therefore currently lies only slightly below the long-term average of 5.4 points. The current economic situation in China is, however, assessed more negatively compared to the previous month, with the corresponding sub-indicator falling by 8.3 points to a current level of minus 5.2 points.

There has been a slight upward correction regarding the expected growth rate for 2017, to 6.5 per cent. By contrast, the forecasts for the first quarter of 2017 was corrected downward, from 6.6 per cent to 6.4 per cent.

According to the surveyed experts, export is becoming less and less significant as a driver of growth in the Chinese economy, with the corresponding sub-indicator falling by 13.6 points. This is probably due to the feared restrictions on world trade as a result of the US presidential election. The experts also assess China's situation significantly less favourably when it comes to China's share of global trade.

Domestic consumption (private and public consumption) may become even more significant as a central pillar of the Chinese economy according to the experts.

For further information please contact

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