Still not stable

Our SBG inhouse China Activity Index moderated further in August, slipping from 6.00% in July to 5.87% in August, which now is the lowest since October 2015.

Without wanting to harp on 2015, we must however stress that the current cyclical slowdown is a direct repercussion of policymakers’ shift in priorities after what was a rather poorly managed 2015.

China’s current economic slowdown is due primarily to the domestic policy choices made since 2015, and to Beijing’s commitment to ringfencing the positive momentum made in de-risking the financial sector, which is gradually changing the manner in which land, labour and capital are allocated in the economy, but sidelining for now any buoying of short-term economic performance.