The pace of economic expansion in China could moderate

The Conference Board published April 19 its most recent data on China leading economic index. The mensual and semestrial evolution of the index signal a slowdown in the pace of progression of the economic activity in the coming months. The OECD equivalent index, released April 12, points also towards a moderation of the pace of growth, but it would still increase faster than the long term historical trend of the economy.


All in all, China's economic outlook remains good. The IMF forecasted last week that China GDP growth would be 9.6% in 2011, compared to 10.3% in 2010. A preliminary assessment of  the first quarter growth is at 9.7% (annualised rate).

Inflation is actually the main concern of chinese authorities on the economic front. Different initiatives have been taken to try to slow it down : interest rate increases, higher rate of reserves for the banks to slow the expansion of credit, slight appreciation of the exchange rate of the yuan. The real interest rate remains in negative territory, and analysts expect further increases in interest rates if China wants to succeed in its fight against inflation.