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17 Apr 2019

International Economy

Chinese economy is likely to enjoy the highest growth at 6.4% YoY in 1Q19 before decelerating in the remainder of this year (Business Brief No.3796)

         Chinese economy in 1Q19 expanded 6.4 percent YoY compared to 6.6 percent growth in 2018, while exports increased only 1.0 percent YoY versus 9.9 percent in 2018.   Nonetheless, the government's stimulus policy has begun to bear fruit to support the growth momentum of the Chinese economy. The Chinese government has given an approval to 16 infrastructure projects since December 2018 with a combined investment of CNY1 trillion (USD160 billion), pushing the fixed asset investment in 1Q19 to accelerate 6.3 percent YoY versus 5.9 percent YoY in 2018. Additionally, the domestic consumption begins to recover, thanks to the government's economic stimulus measures. China's retail sector surged at the highest rate in six months at 8.7 percent YoY.

            Nonetheless, the Chinese economic growth in the remainder of 2019 is expected to decelerate due to slowing exports as a result of weak global economy and uncertainties surrounding China's trade tension with the US. KResearch estimates that the Chinese economy in 2019 will rise 6.2 percent (within an estimate range of 6.0-6.4 percent). Chinese economy is likely to hit the highest growth rate in 1Q19 and lose steam in the remainder of this year due to limited positive factors. In particular, KResearch views that Chinese economic health remains fragile due to higher amount of debts in its financial system and unpredictable external factors.  

              KResearch also predicts that Thailand's exports to China will contract around 0.5-3.0 percent in 2019 after shrinking 9.2 percent YoY in the first two months of this year. The Thai exports to China are likely to drop at a slower pace in the remainder of the year due to positive outlook of the trade dispute and Beijing's measures to stimulate the economy. In 2019, the market of inbound Chinese holidaymakers is likely to slow down. The number of Chinese travelers in Thailand this year may reach 10.80-10.99 million, up 2.5-4.3 percent YoY when compared to 7.4 percent growth in 2018. Tourist receipts from Chinese holidaymakers are expected to generate around THB598 billion-609 billion in revenue this year, up between 3.0-5.0 percent YoY versus 11.5 percent growth in 2018.