Haitong Agrees. 2016 Recovery and 2009 Recovery Both Credit Fueled

2016 is like 2009: a credit fueled binge. The difference between 2016 and 2009: the marginal return on debt is collapsing in 2016, which is why Haitong thinks this can't last for more than a year and sees second half risks:
Short-term economic improvement. Q1 GDP year on year growth of 6.7%, although higher than last year's fourth quarter fell slightly, but the growth rate dropped mainly from January to February poor start to drag, March has been significantly improved. From the demand, sluggish external demand, but domestic demand more prosperous, investment continued to rise, consumption is still the mainstay. 1 quarter fixed asset investment growth rate of 10.7%, compared with the fourth quarter last year, rebounded in March the growth rate to rise further to 11.1%. The manufacturing sector investment growth rate down, but real estate and infrastructure investments are significantly improved, especially in March real estate investment sales month growth rate was high. From the production perspective, although a quarter of tertiary industry growth rate has come down, but the contribution to economic growth of the secondary industry declined, while the contribution of the tertiary industry rises. The industrial growth rebounded sharply from 5.4% in Jan-Feb to 6.8% in March. We expect the second quarter GDP growth may rise to 6.8%.

But the main cause of the economic recovery is the same as in 2009, are relying on the huge monetary stimulus, but this economic rebound lasted only one year, and the current round continuing is worse, and therefore short-term improvement in the economy, although at a honeymoon period, but the second half still need to guard against economic downside risks again.

iFeng: 海通:当前经济复苏主因与09年一样 持续期或不到1年

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