Chart of the Week : Old growth engines continue to support China’s economy

Fathom’s measure of economic activity in China – our China Momentum Indicator (CMI) – fell from March’s two-year high of 3.4% to 3.3% in April.

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Our China Momentum Indicator (CMI) fell from by 0.1 percentage points between March and April to 3.3%. A slower pace of annual growth in electricity production and railway freight volumes was responsible. But, at 5.4% and 15.5% respectively, China’s economy continues to be driven by these old growth engines of investment and export-led growth. Yet again Chinese policymakers are opting for the easy route to stimulate the economy rather than accepting short-term pain to achieve a sustainable growth strategy in the long run. Sharply rising profits reported by the industrial sector, released over the weekend, support this case.

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