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Macroeconomic round up: China's growth slips and Japan could be looking at more stimulus

Jason Walls breaks down the week's biggest news in macroeconomics on NBR Radio, and on demand on MyNBR Radio.

NBR Radio
Fri, 23 Oct 2015

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China’s third quarter GDP figures have revealed what economists and analysts have been forecasting for years – the People’s Republic’s economy is shifting down a gear.

Although down just 1% on the second quarter, it’s unlikely China will achieve GDP growth of 7% plus for a while, if ever.

Goldman Sacs recently marked down its 2016, 2017 and 2018 projections for Chinese GDP growth to 6.4%, 6.1 % and 5.8 % respectively. These figures were down from previous estimates of 6.7%, 6.5% and 6.2%.

Although these figures reflect slowing growth, the world is witnessing a measured slowdown in China, rather than a dramatic collapse.

The focus on a consumption-driven economy over one based upon manufacturing is good news for New Zealand.

As the Chinese middle class grows, it will continue to demand more and more New Zealand products.

As well as this, more Chinese tourists are heading to New Zealand.

According to HSBC economists Paul Bloxham, just 4% of the Chinese population have a passport, “so we think there is a lot more scope for increased travel by the Chinese.”

But the slowdown in Chinese growth has had some negative implications on Japan.

Japan’s exports grew at the slowest pace in more than a year in September.

The value of Japanese shipments rose just 0.6% in September from a year earlier, marking the third straight month of waning growth.

This is casting more doubt over the struggling economy and questions are being asked about Japan falling back into a recession – it came out of one earlier this year.

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NBR Radio
Fri, 23 Oct 2015
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Macroeconomic round up: China's growth slips and Japan could be looking at more stimulus