Expectations for Chinese Economy Rise Sharply

The economic policy plans and objectives of the new five-year plan of the Chinese government, have boosted expectations for the Chinese economy. The CEP Indicator, which reflects the expectations of international financial market experts regarding China’s macroeconomic development over the coming twelve months, has risen sharply in the current survey period (03/21/2016 – 04/06/2016), climbing from minus 25.7 points to a level of 3.5 points.

According to the experts, the measures to be implemented as part of the new five-year plan to stimulate the Chinese economic growth will first and foremost lead to a boost in the construction sector. The corresponding sub-indicator has grown by 13 points to a reading of 2.2 points. Domestic consumption is still considered to be both relatively stable and supportive for the economy. The automotive industry is also rated positively again.

The all-around improvement in growth expectations is also reflected in the assessments of the most important industrial regions: Expectations either remain unchanged (Guangzhou, Shenzhen) or improve significantly (Beijing, Tianjin, Hong Kong) compared to the previous month.

Furthermore, the improved economic outlook shall ease the devaluation pressure on the yuan and lead to a rise in foreign exchange reserves of China's central bank.

It remains to be seen whether this improvement in expectations for the Chinese and global economy will also soon find expression in the real economic data.

For further information please contact

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