There is rising concern among global investors that a Chinese growth slowdown will drag down the world economy. If reported growth on Monday comes in below expectations, the news could spark a global equity sell-off. Chinese trade data this week showed that exports are beginning to suffer, but domestic factors have so far been more important than US tariffs to China’s slowdown. Here are five things to look out for in Monday’s data release.
1. Headline GDP growth Inflation-adjusted gross domestic product was 6.5 percent in the third quarter, the slowest quarterly figure since the depths of the global financial crisis in early 2009. Growth probably slowed further to 6.4 percent in the fourth quarter, according to a Reuters poll. UBS’s forecast is even lower at 6.2 percent. A below-consensus figure could spark a global equity sell-off.
2. Housing sales Property — and especially housing — has long been a crucial driver of overall economic growth. A property rally helped sustain China’s strong growth from 2016 through early 2018. But property sales by floor area have fallen for three straight months on a year-on-year basis, including a 5.1 percent drop in November, the biggest decline since 2015. Continued deceleration will force developers to slow investment in new projects, which would in turn reduce construction activity, commodity demand and pressure overall growth.