October economic indicators announced today, together with the credit figures released yesterday, were all
below the previous readings and the market consensus. As we predicted, the economy continued its
moderation in Q3 due to the authorities’ policy initiatives.
These policies include the continuing prudent
monetary policy and the regulatory tightening on shadow banking and property market on one hand and the
supply-side reform and corporate deleveraging on the other hand. In addition, the authorities enforced the
existing environmental policies on high-polluted sectors to eliminate overcapacity.
Altogether, we maintain our 2017 growth forecast at 6.7% (official target: 6.5%; consensus: 6.7%), with slight upside bias.