I posted earlier on the combined report from the Australian government's Department of Industry, Innovation and Science, and Westpac Bank

The post had a (very) brief summary of the report (link)

I've a bit more, this is again a summary, but from Westpac (bolding mine)

  • Chinese economy lost momentum through 2015 and Q1 2016
  • However, since then, real GDP growth has stabilised at 6.7%
  • Many questions remain regarding the outlook for China; but, at least for now, solid growth continues
  • The tertiary or service sector remains the primary driver of aggregate momentum... service sector growth was heavily skewed to the financial sub-sector in 2015, now real estate services are in the ascendency
  • Looking forward, authorities will be hoping that the recent strong residential property price growth not only supports an improvement in residential construction, but also gains for consumption ... in tier-1 cities (the four largest cities), further policy action is expected to cool excessive price pressures.
    For manufacturing, near-term downside risks clearly have abated in recent months
    For construction, conditions are still weak and the outlook clouded ... there has only been a modest acceleration in investment in the sector. Affordability concerns; the potential for further policy actions; and limits on land supply in tier-1 cities are restraining new investment. Outside of tier-1, there is still a considerable inventory of unsold new homes to work through, giving little cause to expand supply.
    Growth in investment by state-owned enterprises remains strong, circa 21%yr in September 2016. But private-sector momentum is unquestionably weak, experiencing growth of just 2.5%yr.
    Commodity prices have experienced a sharp rally through 2016. Sluggish real demand; high inventory levels; and market analysis all indicate that financial speculation and US dollar asset demand has provided considerable support to prices
  • Into 2017 we expect prices to revert back towards cost curves, as the supply of key commodities adjusts to current windfall profits, and speculative demand softens under the weight of falling prices
  • Australian bulk commodity producers have taken great strides in lowering their production costs and increasing capacity. They are expected to play a significant role in the supply adjustment. Further, they remain in a strong position to weather any undershoot in prices that may result from increased supply. However, those further up the cost curve, including private Chinese producers, are in a much more precarious position.


That (above) is from WPAC. I'll just add a word or two of caution in addition to WPAC's ... using iron ore as an example ... Yes, its had a huge price rally this year:

But its well, well short of 2011 highs:

And, there have been new supplies brought on line ... so, yean ... caution warranted.