A steep sliding down

China’s current macroeconomic data cycle offers limited illumination of the trajectory of either the economy or underlying economic conditions. Of course, the impressive data outcomes of recent weeks impress — but they fail to provide useful guidance because of the base effects. For instance, the combined January and February figures released recently offer this: retail sales, fixed asset investment and value-added output of industrial firms each surged by well over 30% y/y. We reiterate that most macroeconomic data through much of H1:21 will be reporting record highs. Indeed, our base case of GDP growth accelerating from 6.5% y/y in Q4:20 to an already staggering 16.0% in Q1:21 faces yet further upside surprise risks. Nevertheless, for the first part of 2021, any comparisons with last year are meaningless, belying the cyclical forces underway.