HSBC EXPECTS SLOWER CHINA GROWTH TO PROMOT POLICY RESPONSE

BEIJING — HSBC says China’s first quarter numbers mainly reflect 1) weak global demand; 2) a policy vacuum during the leadership transition and 3) the impact of Beijing's new initiatives to rein in extravagancy, cool property prices and institutional changes. “1Q GDP is still above 3Q's trough of 7.4%, and strength in leading indicators and PMI numbers point to the continuation of recovery,” HSBC says. “With inflation easing, the disappointing growth number will likely prompt policy response, lifting growth in coming quarters,” the bank says.