China economic update
Friday 23 Aug 2019China’s GDP increased 6.2 percent year-on-year in the second quarter of 2019, slowing from a 6.4 percent expansion in the previous three-month period and matching market expectations. It was the lowest growth rate since the first quarter of 1992, amid ongoing trade tensions with the United States, weakening global demand and alarming off-balance-sheet borrowings by local governments.
2019 Economic Outlook
The Economist Intelligence Unit forecasted that China’s real GDP will grow by 6.2% per year on average in 2019-20—just above the minimum level required for the government to achieve its 2020 goal of doubling real GDP from its 2010 level. Growth is expected to slow to an annual average of 5.5% in 2021-23. Beijing set a 2019 economic growth target of between 6 and 6.5 percent in March.
Meanwhile, the organization has amended its trade war forecast. It does not anticipate a trade agreement being reached between China and the United States until 2021. In the interim, it expects both sides to refrain from further tariff escalation, although the risks to this forecast are high.
The Construction Sector
Home prices in 70 major Chinese cities were flat in Q2 2019, especially in first-tier cities in China, amid continuous government controls to curb speculation and prevent an overheated market.
Total investment in real estate had an accumulated increase of 10.9 percent year-on-year in June, slowing slightly compared to the previous months in 2019, at a growth rate above 11 percent. Total floor area completed in Q2 was at 757 million m2, up 13.5 percent compared to Q1, but still below the same periods in 2018.
China Wood Imports (cited from China Bulletin)
Softwood log inventories at China’s main ocean ports were 4.1 million m3 at the end of June 2019, a slight increase of 1.5 percent versus the previous month. Radiata pine log inventories were 6 percent higher from the prior month and represented 72.5 percent of log inventory. North American Douglas-fir and hemlock volumes declined 13.7 percent from the month before.
Softwood lumber inventories at Taicang port and the surrounding area were 1.56 million m3 in late June 2019, up nearly 10 percent from last month, excluding inventories of about 60,000 m3 at some new warehouses.
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