Hong Kong offers a window on the Chinese economy, unobscored by China’s bullshit statistics and propaganda. From Tyler Durden at zerohedge.com:
In the latest indication of contracting global growth, overnight Hong Kong reported that its Q1 GDP fell off a cliff 0.4% qoq, widly missing estimates of 0.1% growth as retail sales plummeted and the property market continued its collapse. On a y/y basis, the economy grew only 0.8% when compared to the same period last year, less than half the 1.9% y/y growth reflected in Q4.
Hong Kong’s economy grew only 2.4% in 2015, half the pace of 2011, as a slowdown in mainland China and a weaker yuan curbed Chinese spending, while a volatile stock market also hit domestic consumption.
“At least over the next five to six months, we don’t see any positive growth driver that can help lift GDP growth substantially,” said Raymond Yeung, an economist at Australia & New Zealand Banking Group Ltd. in Hong Kong.
“Hong Kong’s economy is facing myriad headwinds, including an increasingly acute residential property price correction and significant linkages with the slowing Chinese economy,” said Andrew Wood, head of Asia country risk at BCI research. He added that “while we do not envisage the economy tipping into full-scale recession in 2016, the risks of such an event are rising.”
We, on the other hand, envisage the Hong Kong economy tipping into a recession, as we have since early 2016.
One driver for the weakness is that Hong Kong’s tourist arrivals dropped 20.5% in February, and slid 4.3% from a year earlier to 4.21 million in March. Mainland visitors, which accounted for 72 percent of the total, fell 6.9% to 3.02 million, perhaps the best indication of just how pressured the Chinese consumer truly is.
To continue reading: China Hard Landing Spreads: Hong Kong GDP Tumbles At Fastest Pace Since Financial Crisis
