China Q3 GDP and September data (IP, retail sales, etc) today — insights

This is a great day for the data from China (and the national Congress continues too)in This batch, all due to 02: 00 GMT:


  • expected is +6.8% y/y
  • prior was +6.9% y/y
  • expected 1.7% q/q, prior 1.7% q/q

September, the activity data:

  • Industrial Production y/y expected is 6.5%, prior 6.0%
  • The industrial production YTD y/y expected is 6.7%, which before was 6.7%
  • Fixed assets (excluding rural) YTD y/y, expected is 7.7%, prior was 7.8%
  • Retail Sales y/y, expected is 10.2%, prior was 10.1%
  • Retail Sales YTD y/y, expected is 10.3%, prior was 10.4%


  • In the June quarter, the Chinese GDP registered a third consecutive upside surprise, with an annual growth of 6.9%. Report of the authorities of the 2017 target «of approximately 6.5% per year, the six months to June was definitely a good start.
  • Come the September quarter, this dynamic has endured. The Pmi continue to report to the higher speed in the manufacturing and services sector, with broad support from both domestic and external demand.
  • In the future, the key downside risk to growth is that the weakness of employment growth caps of the momentum in household spending. In the short term, it is unlikely to be significant. However, should the income of households not develop in a robust fashion, it could become a matter of increasing concern. In 2018, the investment is also likely to provide less support.

TD Securities:

  • The PMI of the following (manufacturing, non-manufacturing, official and Caixin) actually recovered from 52 in Q2 to 52.3 in Q3. However, indicators of activity in loss of speed between T2 and T3: the average of the ip and retail sales has slowed, from 9.2%/year to 8.6%/year while the BBG GDP proxy fell, from 7.3%/year 6.9%/year.


  • GDP probably rose 6.7% y-o-y in Q3 to 17, compared to 6.9% in Q2 17.
  • Economic activity softened somewhat over the last two months, under the effect of a cooling in the housing market, financial leverage policy, and tightening environmental regulations.
  • While we expect growth momentum to slow down towards the end of the year, we believe that the strength in the manufacturing sector, including the private sector, will ensure that the growth continues to be sustained.


  • We expect GDP growth to decelerate slightly to 6.8% y-o-y in Q3 from 6.9% in h1, driven by the cooling of the real estate industry.
  • For September, the activity data, we expect industrial production growth to rebound slightly, after a sharp moderation in August, supported by steady growth in the trade and industry of profit.
  • Fixed asset investment growth is expected to moderate more on the cooling of the property of investment and consumption growth is likely to rebound in part due to last year’s low base.


  • We expect industrial production growth to peak above 6.5%, as reported by the improvement of the PMI index in the manufacturing sector, while investment in fixed capital growth is likely to have remained broadly stable, as an expected recovery in investment in the manufacturing offsets a moderation in infrastructure and real estate investment.
  • The growth in retail sales probably stayed stable at 10.1%.
  • Considering the average IP growth for the months of July-August of 6.2% and a likely bounce in September activity, we expect a gradual slowdown in the growth of 6.8% y/y (6.5% q/q saar) in Q3 from 6.9% y/y (6.9% q/q saar) in Q2.

(bolding above is mine for emphasis)

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