UPDATE: MNI: 5 Things To Look For: China Releases Q4 Data

     BEIJING (MNI) - -Updates paragraph 4 'the market has a tendency to

underestimate GDP data'

     China's GDP data will be released on Thursday, Jan 18, including industrial

output, fixed-asset investment, retail sales and real estate sales &

investments. 

     MNI survey indicate most analysts expect a mild slowdown in the fourth

quarter, with the median estimate at +6.7% vs +6.8% in Q3.

     Ahead of the release, MNI outlines five themes that warrant particular

attention:

- The market has a tendency to underestimate the GDP data release. Since 2012,

only 8 out of 23 times of GDP median forecasts have been correct. While the

forecasts were generally very close to the actual GDP growth -- 13 out of 15

occurrences the misses were within 0.1 percentage points. In total, 12 out of 15

times actual GDP growth rate came in higher than expectations. 

BOTTOM LINE: 2017 annual GDP growth is likely to be "around 6.9%", as Premier Li

revealed earlier in a conference last week. Any GDP growth rate different than

6.9% will be a surprise to the market. An annual growth rate of 6.9% implies

China's economic condition is stable at the moment. With annual GDP growth rate

less of a secret, the factors supporting GDP growth will be the main focus.

- Upside risks also in industrial output growth: Environment protection campaign

is likely to reduce industrial output, and the market expects to see a weaker

industrial output growth of 6% in December. However, MNI notes that industrial

output has tended to pick up at the quarter-end -- March, June and September

last year. A higher-than-expected industrial output is likely to push up Chinese

bond yields.

- Growth in infrastructure investment may remain strong. While growth in

fixed-asset investment (FAI) was relatively weak in October and November,

infrastructure investment was nonetheless strong. If December data on

infrastructure turns out strong, its contribution to growth will be more

pronounced. That means the funding constraint of local governments will likely

be relaxed next year if a slowdown does happen.

- Growth in real estate investment may stabilize after a slower trend since

April. Investors' concerns of property restrictions have been alleviated on

speculation that the government will loosen regulations to deal flagging growth.

Growth in property investment in December may further boost investors'

confidence.

- Retail sales face downside risk: December import growth was surprisingly low,

raising concern that domestic demand has weakened. A possible retail sales

slowdown will add to the concern.

--MNI Beijing Bureau; +86 10 85325998; email: he.wei@marketnews.com

[TOPICS: MAQDS$,MAUDR$,MAUDS$,M$A$$$,M$Q$$$,M$U$$$]