Signals from China’s Service Sector

Service Sector Sept-18

The last two months have seen incremental drops in the service sector Index. September’s confidence is the lowest level since November 2017.  While the number remains above the positive threshold of 50, the trend is moving in the wrong direction.  Given the trade issues, every move down is looked at as maybe more significant than it is.  Another negative move next month will signal a trend.  Source: Markit Economics

China’s Consumer Purchasing Holds Up

Retail Sales Jul-18

As we watch the economy in China for adjustments due to the current trade challenges, it is notable that retail sales growth continues unabated meaning that consumers are buying, that they have yet to be affected by the outer noise and that the slight weakening in the country’s industrial sector has yet to reach down to the street.  Watch here for any changes. Source: www.; National Bureau of Statistics of China

Chinese Consumers Not Yet Affected by Trade News

Consumer Sentiment July-18

Based on the early downward indicators from China’s industrial sector and last month’s Consumer Confidence decline, the biggest in the 13-month period, we are paying close attention the country’s vital signs.  Are the noises from the industrial sector bleeding down to the street?  July’s rebound implies that confidence has not yet eroded as a result of the trade issues between the US and China.  Consumers will continue to buy things if they remain positive.  Sources:; Nat’l Bureau of Statistics, China

Consumer Prices on a 3-Month Climb

Cnsumer Price Index Jul-18

If we remove the anomaly that is February from the equation, the period after it, the last five months, sees a Consumer Price Index that is only marginally higher than the seven month period prior to the spike. The Index has been on a slow rise over the last three months, which is likely to affect retail sales.  Source:; National Bureau of Statistics of China

Trade Issues Effect PMI Data

Purchasing PMI-Jul-18


Manufacturing outlook dropped to the lowest number in this 13-month period, matching the Index from last November.  The main drivers for the slippage was slower growth in output and new business at the same time that export orders were falling.  Soft exports appear to be a direct result of China – US trade concerns. They seem to have a direct effect on the level of optimism for the coming year among industrial managers.  Source: Markit Economics

China’s Inflation Rides Up Modestly

China's Inflatio Raate-Jul-18

Pressure on prices coming from a variety of sources pushed the inflation rate back over 2% for the first time since March.  The government’s target is 3%.  Higher costs for food, transportation, communication, vehicle fuel, rent, heating fuel, utilities, education, culture, recreation, clothing, household goods and services all played a role in the rise.  Sources: Trading Economics; National Bureau of Statistics, China

China’s Mobile Subscribers Just Keep Coming

Carrier Data July-2018

China now has one hundred million more mobile subscriptions than population, which is astounding given the population is 1.4 billion.  Smart device subscriptions continue to grow at a solid pace, averaging 10.8 million new subscriptions per month over the last twelve months and more than 81 million new subscribers since the beginning of this year.  From our point of view, the most important number is the 1.2 billion mobile devices that are advertising friendly.  Sources: China Mobile, China Unicom, China Telecom

Chinese Consumer Confidence Declined in June

Consumeer Confidence - Jun-18

Consumer confidence in China has dropped, month-over-month, about 4% to below 120 for the first time since last September.  While the 118 range is still a strong positive number, the decline says something is making Chinese consumers pull back.  One month does not make a trend, so it will be important to watch the next couple months before coming to a conclusion.  In other sectors we have seen significant spikes or declines that have corrected themselves in the following period. It is important because consumer positivity is central to the new Chinese economy and to marketers’ success.  Sources:; Nat’l Bureau of Statistics, China

May Bad, June Good

Retal Sales Jun-18

Apparently May’s number was an anomaly.  At 0.31%, growth in May registered the slowest retail sales increase in the two years we have been tracking it.  There is no obvious explanation for the decline because related numbers like consumer sentiment or consumer prices held steady at good levels through the same period.  Meanwhile, June saw a return to the best growth number for the first half of 2018.  All’s right with the world again.  Source: www.; National Bureau of Statistics of China

China’s Second Quarter GDP Slips One-Tenth

China's GDP - Q218


China’s reported GDP hangs in through the second quarter.  A one tenth decline is not an alarm bell; actually it is not a bell at all.  The internal numbers showed the economic balancing act that is China today.  While industrial production increases were down to 6% from 6.8% in May, retail sales increases were up to 9% compared to May’s 8.5%.  Sources: Trading Economics; National Bureau of Statistics, China