Sky-high headline output and investment growth rates early in 2021 slightly beat expectations, but were clearly flattered by comparisons to last year’s pandemic. China’s recovery remains imbalanced between industrial output and household consumption, and signs of a slowdown in sequential momentum are accumulating, particularly in manufacturing and construction. Consumer and producer price trends are moving in opposite directions, credit growth surprised on the high side but continued decelerating, and small business sentiment indicators point to softening export orders ahead.
