Forex Flash: China´s slow recovery trend remains intact - OCBC Bank

FXstreet.com (Barcelona) - OCBC Bank analysts note that China´s slow recovery trend remains intact.

They begin by noting that China´s retail sales growth in the first two month of 2013, moderated significantly to 12.3% YoY, down from the growth pace of 15.2% in December 2012, the lowest level since February 2011. They feel that it is interesting to note that spending on food and drinks slowed dramatically with spending in big restaurants falling the most due to aggressive anti-corruption campaigns to clamp down on recreational activities using public funds. Additionally they note that Industrial production also kicked off the New Year with slower growth, down to 9.9% yoy from 10.3% yoy in December 2012. They write, “Commodity production such as steel, cement and non-ferrous metals outpaced the headline growth, benefiting from the restocking activity in the second half of 2012. However, machinery equipment production growth under performed, confirming China’s slow recovery trend.” They add that fixed investment in January and February expanded at a faster than expected pace of 21.2% yoy, up from 20.6% yoy in December, mainly driven by higher investments in infrastructure sectors. Meanwhile, property investment accelerated in the first two months to 22.8% yoy, up from 16.2% yoy in December.