About 2-3 months ago, the Chinese economy hit some rough waters. It started with a public acknowledgment of excess loans with in the banking system and was followed by a spike in short term interest rates. The PBOC didn't do anything to stall the sharp upward spike, a move which analysts interpreted as the bank's message to the banking sector to stop the practice. Around the same time, we saw a weakening in some economic numbers. In saying "weakening" it's important to remember that this is a relative term; the Chinese economy was still growing, just at a slower rate.
But since the short term spike, we've seen a return to strong growth numbers from China. For example, exports rebounded:
China’s exports increased more than
estimated in August and inflation stayed below a government
target, helping Premier Li Keqiang sustain a rebound in the
world’s second-largest economy from a two-quarter slowdown.
Overseas shipments rose 7.2 percent from a year earlier,
the General Administration of Customs said in Beijing yesterday.
That exceeded the 5.5 percent median estimate of analysts
surveyed by Bloomberg News. Consumer prices rose 2.6 percent,
the statistics bureau said today, leaving room for extra
stimulus if needed.
And industrial production also printed an increase:
In August 2013, the total value added of the industrial enterprises above designated size was up by 10.4 percent year-on-year (the following growth rates of value added are real growth rates, after deducting price factors), 0.7 percentage point higher than that in last month. In June, the total value added of the industrial enterprises above designated size went up by 0.93 percent month-on-month. In the first eight months, the total value added of the industrial enterprises above designated size was up by 9.5 percent.
Here's a chart of the data:
Investment is also at high levels
From January to August, the private investment in fixed assets reached 16,696.4 billion yuan, a year-on-year increase of 23.3 percent in nominal terms, and the growth rate remained at the same level over the first seven months. The proportion of private investment in fixed assets to the total investment in fixed assets was 63.6 percent.
Here's a chart of the data:
And retail sales printed their best number of the year
In August 2013, the total retail sales of consumer goods reached 1,888.6 billion yuan, up by 13.4 percent year-on-year (nominal growth rate. The real growth rate was 11.6 percent. The follows are nominal growth rates if there’s no additional explanation). Of the total, the retail sales of consumer goods of industrial enterprises (units) above designated size was 949.0 billion yuan, increased 11.5 percent. From January to August, the total retail sales of consumer goods reached 14,816.4 billion yuan, up by 12.8 percent year-on-year.
I looked at the Chinese market last Friday; not much has changed since then.