China: has the bottom been reached? (II)

Posted August 10, 2012 by rvillareal

• The data show that the government’ efforts to boost the economy, including a substantial acceleration of lending, are already underway, but it is early in the process, and the most likely result is still: stabilization of growth in the third quarter, stabilization plus some up-tick in the final months of the year, with perhaps a moderately stronger rebound in 2013.
• All of which is conditional upon the continuation of the (painful) muddle through of the euro-zone: should the European debt problems generate a financial shock, a qualitatively worse scenario would arise forChinaand the rest of emerging markets.  If such worse-case scenario is avoided, the recovery of real GDP will probably be moderate, taking the rate of growth from the current near-7.5% level to perhaps 8%-8.5% on average during 2013.

[private]8-8-12–EMG INDICATORS AND INSIGHTS _China IP, Retail Sales, CPI_[/private]