A just-published report updated our outlook for the Chinese economy, and concluded that it continues to chug along near its trend growth rate. While activity is not as weak as China bears have been expecting, growth is also unlikely to provide any upside fireworks.
China’s overall export performance has been a positive surprise this year, and not consistent with the bearish headlines focusing on the plunge in Chinese exports to the U.S. In fact, overall Chinese trade has been robust due to strong exports to non-U.S. countries.
There are wide divergences between the weak and strong segments of the Chinese economy. However, and most importantly, China is still a net positive for final global demand, belying the doom-mongering of China hawks in Washington.
