China Will Struggle To Hit Its 5% Growth Target This Year

Summary

• Momentum in the Chinese economy has softened in the past few months as pessimism becomes increasingly entrenched.  That suggests further supportive policy measures are needed.
• Recent manufacturing PMI data has been sluggish, remaining in contraction for four consecutive months.
• Overcapacity in the auto industry could be concerning as domestic sales slow and tariffs come into play in Europe and North America.

Nikada

By Lynn Song

Industrial activity is moderating after a strong first half

China’s manufacturing provided a pleasant surprise in the first half of the year as a mild recovery of export demand along with domestic technology self-sufficiency and