Next Week in China: 13-17 January 2025

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Major Data Releases:

13 January: China to report December trade balance
17 January: China to report Q4 and full-year 2024 GDP data
17 January: China to hold press conference on national economic situation
17 January: China to report December industrial production operation
17 January: China to report December energy production
17 January: China to report December investment in fixed assets (excluding rural households)
17 January: China to report December investments in real estate development
17 January: China to report December total retail sales of consumer goods
17 January: China to report December households’ income and consumption expenditure
17 January: China to report December industrial capacity utilization rate
17 January: China to report December sales price indexes of commercial residential buildings
18 January: China to report 2024 Q4 value-added of major industries

The middle of the month is typically marked by a significant number of key data releases, representing a peak period for economic information. In the coming week, over 10 major reports are expected which would provide valuable insights into China’s economic situation at the end-2024.

For exports, December showed mixed performance across various domestic high-frequency metrics and external demand indicators, though a low base provided some support. We anticipate a year-on-year growth rate of 7.1 per cent for December exports. Observing the data, global external demand saw a slight decrease in December. The monthly average of the Shanghai Containerized Freight Index saw a minor month-on-month decline to remain at a seasonal midpoint, while the Baltic Dry Index experienced a significant drop. However, Chinese PMI indicators point to a continued rise in new export orders while import sub-indices experienced a notable rebound. It is highly likely that trade tensions will escalate following US President Donald Trump’s inauguration on 20 January. This means there is a strong chance that the frontloading of export shipments will persist.

For total retail sales, we expect the December year-on-year growth rate to pick up by 3.5 per cent from 3 per cent in November. The early timing of the 11.11 sales events affected November figures while December gradually returns to normal. Looking at high-frequency indicators, subway passenger volume in 18 cities between 1-26 December increased from November’s 4.9 per cent to 5.4 per cent. Car sales continued to rise under the Mainland’s trade-in policy, with the daily average sales growth of passenger vehicles from 1-22 December accelerating from November’s 18 per cent to 25 per cent.

For equity, as of Thursday, 9 January, the MSCI China Index decreased by 2.89 per cent for the week. In contrast, the Shanghai Composite Index moved sideways, the Shenzhen Component Index slightly increased by 0.80 per cent, and the ChiNext Index declined by 0.26 per cent. During this period, small to mid-cap stocks outperformed large-cap stocks. From a style perspective, growth stocks slightly outperformed value stocks. It is anticipated that the GDP for the fourth quarter of 2024 grew by 4.8 per cent year-on-year, which is about 0.2 percentage points higher than the third quarter. Full-year GDP is expected to grow by 4.8 per cent, nearly meeting the target of around 5 per cent.

This piece has been co-produced with Yiyi Capital Limited in Hong Kong, a China specialist and a part of a global financial services group.