Expectations Remain Almost Unchanged

China Economic Panel

According to the most recent survey for May (18/04/2018–03/05/2018), the economic outlook for China dropped by 0.3 points to a new value of minus 1.3 points. The most recent reading of the CEP indicator, which reflects the expectations of international financial market experts with regard to economic development in China over the coming twelve months, seems to suggest that the current economic situation will likely remain unchanged until well into the year 2019.

Although at 25.0 the reading for the current economic situation in China is 5.3 points lower than for the previous month, this is still a fairly positive assessment and well above the average reading of 2.9 points (since the survey began in May 2013).

The financial market experts polled in the current survey predict real GDP in China to grow by 6.7 per cent in 2018 and 6.5 per cent in 2019.

Expectations regarding China’s exports have recovered slightly following a steep decline over the previous few months. The corresponding indicator currently stands at minus 10.6 points, 8.9 points higher than in the previous month. The indicator, however, still remains significantly below the long-term average of 18.9 points. “This shows that fears over a potential trade war between the US and China have continued to have a dampening effect on expectations,” says Dr. Michael Schröder, senior researcher in the ZEW Research Department “International Finance and Financial Management” and project leader for the CEP survey.

The survey participants seem to be expecting internal economic growth forces to strengthen over the coming twelve months given that their expectations regarding government consumption (current reading: 42.5 points, an increase of 1.45 points compared to last month), private consumption (42.6 points, increase of 10.8 points) and private investment (23.5 points, increase of 6.4 points) have all noticeably improved.

For more information please contact

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

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