China country-specific exchange traded funds advanced Thursday as new economic data helped assuage fears of an imminent slowdown.
China’s economic growth was just shy of estimates, slowing after a sharp V-shaped recovery and countering expectations that the People’s Bank of China would signal further easing to counter a sharp slowdown, Bloomberg reports.
“The fixed income market may have gone a bit ahead of itself in expecting policy easing,” Trang Thuy Le, Asia FX strategist at Macquarie Capital Ltd., told Bloomberg. “Expect RMB outperformance to continue on the back of still robust external surplus.”
The emerging economy’s gross domestic product expanded by 7.9% over the second quarter year-over-year, according to the National Bureau of Statistics, falling short of the Reuters estimate of 8.1% growth for the three-month period.
“Overall, China’s economy looks to be on track for recovery, with the 6% annual growth goal in reach,” Chaoping Zhu, global market strategist at JPMorgan Asset Management, said in a note, according to CNBC. “However, downside and structural risks in domestic demand are concerning.”
“China’s economy sustained a steady recovery,” according to China’s statistics bureau. However, the bureau warned of concerns about the global spread of the pandemic and “unbalanced” domestic recovery.
China’s slower pace of recovery “is still clouded with uncertainties and unbalanced growth, as employment, household income, consumption, manufacturing investment, the service sector and private companies have yet to return to pre-pandemic levels,” Bruce Pang, head of macro and strategy research at China Renaissance, told CNBC.
While China’s economy rebounded at a quick pace, observers warn that the economic expansion could begin to slow ahead.
“China’s growth is decent, but it’s not good enough, and the economy will likely moderate further from here,” Becky Liu, head of China macro strategy at Standard Chartered, told Bloomberg.
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