We've expressed misgivings for some time about the sustainability of GDP quarterly growth into Q2.

Energy inflation is not straightforward to forecast in China, thanks to the lack of clarity over the CPI weights.

China's on-balance sheet government deficit has recovered fast since the initial Covid hit early last year, reaching a seasonally adjusted 3.9% of GDP in Q1, on our calculations, up from the trough of 8.2% in Q1 last year, leaving it easily above the 5.3% average through 2019.

The official manufacturing PMI indicates that bottlenecks remain a problem.

The potential for a consumption-led rebound in Chinese GDP growth is being underestimated, and we still expect a pop of faster growth.

China's official manufacturing PMI looks exposed in the context of the recent softening of regional trade flows. Korean 20-day export growth for June slowed to 29.4% year-over-year, from 53.0% in May.

Last year President Xi announced a new target
for China, with the importance of GDP targeting diminishing.

The PBoC has had its foot off the brake for most of this year so far, following tightening through the second half of 2020, culminating in its efforts to shake out speculative activity through a spike in interbank markets in January. 

It's now widely appreciated that Chinese exports are exposed, as the global economy switches lanes to services, from manufacturing.

Chinese exports have recovered much more quickly than elsewhere, thanks in large part to the still strong command element of the economy. 

China's PMIs strongly suggest that supply-side bottlenecks, if anything, are worsening.

China's official manufacturing PMI was little changed at 51.0 in May, after April’s 51.1, with the index remaining oblivious to U.S. stimulus efforts and in recent months.