China data doubts may muddle decision-making

Significance

This was slowest pace since the first quarter of 2009, but still exceeded most forecasts. The apparent stability of official GDP data even when many other indicators are weak has revived the long-running debate about the reliability of Chinese data.

Impacts

• Further monetary stimulus is likely if growth disappoints, both as reserve requirement ratio cuts and interest rate cuts.
• Uncertainties about the economy and government policy will multiply, raising the country's risk profile.
• External pressure may build for Beijing to be more transparent and informative given China's international economic relevance.