China Slowing is Evident Everywhere Except GDP

The last few days brought another round of rather weak economic readings out of China. We saw total social financing (loans) drop to the lowest growth rate since 2006, measures of inflation turn lower, foreign direct investment decline on a year-over-year basis for the first time since early 2013, and FX reserves fall. However, as the charts below show, other measures of economic activity have been weak for some time including industrial output, monetary aggregates, retail sales and freight traffic. Even so, we will not be surprised when GDP for Q3 (released on Monday, just 20 days after the end of the quarter and never revised!) prints somewhere in 7.5% range YoY, which would be the same as Q2.