Monthly Outlook and Perspectives Report Issue 50

EconomyHeightened uncertainty ahead of trade dealConsumption resilient despite external shocksIt may sound like a cliché but the fact remains that data for the first half of 2019 (GDP growth of 6.3%) have clearly revealed the resilience of the Chinese economy. If we dissect major economic data of H1, consumption remains the brightest sector with retail sales showing an increase of 8.4%. However, it is our firm belief that retail sales would better reflect the real state of the economy if auto sales (down over 12% in H1) were not taken into account. Investment has also held up, growing by more than 5% in the first half of the year. In particular, investment in property has risen by almost 11% - and this is in spite of the fact that most major developers have reported having great difficulty in funding their projects.Chart 1: Data from H1 2019 reveal that consumption remains resil ………………………………