Chinese economy in 2013: going better but still some worries

There was a good surprise during the fourth quarter of 2013 about Chinese economy, there was a surprise accelaration of the Chinese industrial production and the exports have increased. These are good signs about the second world economy.

 

The industrail production, an index that enable people to understand the industrial activity of the country has increased by 10.3% year on year in october, a good surprise that was officially announced by official statistics bureau. This may not be a spectacular accelaration, but this is not a slowing down.

 

According to this office, this strength of the Chinese economy come from the success of the commercial balance at the end of the year. There was a surprise slowing down in september, but over one year there was a 5.6% growth of Chinese exports, retail sales have increased by 13.3% year on year in october, a stable rate and capital investments have increased by 20.1%.

 

This is a trend that appears stronger than what was expected and the Chinese GDP growth in 2013 will be higher than was was forecast by most experts, so far the growth appears to have been of 7.8% in 2013, and the year i not over.

 

What remains unknow is the reaction of the Chinese government, will they keep on with economic stimuli or not ? There is likely to have less investment in infrastructures, a kind of investment that usually reinforces the GDP. The current meeting of the China leaders is awaited by experts, especially since historical reforms have been announced, with the exact meaning os this still unknown.

 

Price growth has been high (3.2%) but reasonable and within the limits established by the government (3.5%).

 

The problems of the Chinese economy are abroad: the world economy is still not recovering and the yuan is becoming more expensive, which means that the exports risk going down in the incoming months. This dependency of the Chinese economy on world’s economy is its main weak point.

 

About real estate, there is still massive investment in this secror in spite of the governement cooling down the market, fearing a real estate bubble. Most Chinese large cities have seen the prices up around 16% this year, showing essentially that the population of the cities is still growing and that the new Chinese middle class wants to accesss property and buy an apartment.

 

 

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