China’s M2 Growth Will Likely Pick Up as Trade Surplus Increases Slightly, CICC Says

China’s M2 Growth Will Likely Pick Up as Trade Surplus Increases Slightly, CICC Says

Ma Yifei

Date: Mon, 07/31/2017 - 20:17 / source:Yicai
China’s M2 Growth Will Likely Pick Up as Trade Surplus Increases Slightly, CICC Says
China’s M2 Growth Will Likely Pick Up as Trade Surplus Increases Slightly, CICC Says

(Yicai Global) July 31 -- Macro-economic data to be released for July will likely show a rebound in China’s M2 growth, a slight increase in the country’s trade surplus and stability in the financing environment, China International Capital Co. said.

China’s foreign trade will maintain rapid growth, CICC said in a research report released today. With the low import and export base in July last year, exports and imports are expected to increase 11 percent and 16 percent in July this year, respectively. The trade surplus is expected to be about USD47 billion.

As China’s bond issuance rose in July and the central bank opened market operations, loans in the month are expected to increase USD118.9 billion (CNY800 billion), social financing is anticipated to go up CNY1.1 trillion and M2 growth is set to rise 9.7 percent, CICC said. With the devaluation of the US dollar and China’s foreign exchange outflow pressure easing, forex reserves will increase USD18 billion to USD3.07 trillion.

China’s CPI (Consumer Price Index) could rise seasonally as prices for agricultural products and demand for rental housing increase. The monthly PPI (Producer Price Index) growth is expected to become positive as metals and energy prices go up. Growth in industrial values may fall back to 7 percent, as industrial activity has been constrained by high temperatures in southern China.

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Keywords: CICC, Data, Economy