China’s growth may have peaked as developers accelerated construction work ahead of government measures to cool the property market, according to research organization The Conference Board.
A leading economic indicator rose 1.1 percent to 144.5 in March, after a 0.4 percent gain in February, the New York-based organization said today in an e-mailed statement, releasing the measure for the first time.
China’s expansion is “unlikely to accelerate further through the summer months,” Bill Adams, a Beijing-based economist for The Conference Board, said. “Developers may have been frontloading projects in anticipation of controls on the real-estate market.”
The Chinese government intensified a crackdown on property speculation after the fastest-growing major economy grew 11.9 percent in the first quarter from a year earlier. UBS AG said May 5 that China’s momentum had likely peaked and Macquarie Securities Ltd. said measures to cool the real-estate market may put the nation’s 8 percent annual growth target in jeopardy.
Asked why the jump in the March number didn’t signal a future economic acceleration, Adams said it followed six months of smaller increases and “this one month is not enough to call a new trend from.” He commented in a conference call. China’s growth remains “strong” according to Adams.
The Shanghai Composite Index fell 3 percent as of 11:30 a.m. local time, extending this year’s decline to more than 20 percent on concern that the withdrawal of stimulus measures and the real-estate crackdown will hurt company profits. Also, the sovereign-debt crisis in Europe is clouding the outlook for exports.
China’s property prices rose by a record in April, according to data for 70 major cities, published by the government. Premier Wen Jiabao said May 15 that the government will act “decisively” to counter excessive gains in home prices in some cities.
The index released by The Conference Board is based on information from the central bank and the statistics bureau relating to loans, raw-material supplies, export orders, floor- space starts, consumer expectations, and supplier deliveries.
The Conference Board also publishes leading indexes for the euro area, Germany, the United Kingdom, France, Spain, Australia, South Korea and Mexico.