China's growth slowing down – Nordea

Nordea Markets analysts suggest that not much is expected to happen on the economic policy front in China this month but they still expect growth to gradually slow down.

• “Although China's soft policy stance will continue, we do not see a need for its leaders to push a panic button, as the negative impacts of the trade war seem to have been largely offset by its stimulus policies. Although the trade negotiations are expected to continue in October, we maintain our view that a profound agreement between the US and China will be almost impossible to achieve in the coming months.
• Most economic indicators confirm that growth is slowing down in China, probably more than the official GDP numbers indicate.
• Just like in other parts of the world, manufacturing is the sector where the weaker momentum is most visible. On the other hand, the general tone in the household sector remains mainly positive, and there are no signs of a sudden stop in the important real estate sector either.
• We reiterate our growth rate estimates of 6.2% for 2019 and 5.9% for 2020.
• As Beijing is dealing with an escalated trade war and a looming economic slowdown, the CNY has made its biggest monthly drop since China unified its dual exchange rates. This may help offset some of the effects of the US tariffs, but it also raises the risks of capital flight and financial panic.”