Economists at Standard Chartered offer their review of the Chinese economic performance for the month of July.

Key quotes

“Official manufacturing PMI fell to 49 in July, showing m/m production contraction and softer demand.”

“CPI inflation likely rose to 3% y/y on surging pork prices; trade surplus may have stayed sizeable.”

“We think infrastructure investment growth accelerated; catering sales may have resumed growth.”

“M2 growth likely slowed due to tax payments and net liquidity withdrawal by the People’s Bank of China (PBoC).”

“We expect CNY loan growth to have eased on reduced loan demand. Government bond financing may have declined significantly as the local government special bond issuance quota was largely used.”

“Meanwhile, total social financing (TSF) growth likely picked up to 11% y/y mainly due to a low base.”