Latest figures were a bit of a mixed bag. On trade, while exports decreased (-2.7% y/y in April after +14.2% in March) imports made their comeback (+4% y/y) after four months of contraction. Credit indicators recorded a slight slowdown but remained firm compared to previous months. M2 rose by +8.5% y/y in April (after +8.6% in March, +8.3% in Q1). Total social financing, a measure of aggregate credit to the real economy, grew by +10.4% y/y (+10.7% in March, +10.4% in Q1). Producer prices continued to pick up speed (+0.9% y/y after +0.4% in March) providing a boost to April’s turnover. PMIs suggest expansion in the near term yet the pace might be more modest in the manufacturing sector. Looking ahead we expect China’s economic growth to slow to +6.4% in 2019 (from +6.6% in 2018). Yet, we also see a rise in downside risks following Trump’s announcement to raise tariffs.
