China’s growth is slowing much faster than expected

The latest data out of China will give those expecting a soft landing pause about China's economic situation. While inflation has come down somewhat of late, so too have industrial output and capital investment. The April industrial production figure was the most worrying as we saw slowest annual expansion in nearly three years. Moreover, according to Reuters, growth in capital investment slowed to the lowest in nearly a decade.

Now, these growth numbers are still robust by western standards. For example, China reported the growth in industrial production in April slowing to 9.3% y-o-y from 11.9% and retail sales growth slowing to a still robust 14.1% y-o-y from 15.2%. But it is the direction of the change and the magnitude of that move which is alarming.

Moreover, loan growth is wea...


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