The Buzz | Look to Macau for signs of China turning points: Schroders

Looking for a leading indicator of turning points in the Chinese economy? Look to Macau casino earnings, says Keith Wade, chief economist and strategist at Schroders, which has 276.2 billion British pounds (USD447.7 billion) in assets under management.
“It doesn’t correlate perfectly with gross domestic product but it’s very good at picking up turning points,” he says. “If people aren’t spending in top restaurants or hotels or casinos, that means growth will be weaker,” Wade said at Dow Jones’s Market Talk conference.
To recap, Macau’s gross gaming revenues fell 19.6 percent in November, the sixth consecutive month of year-on-year declines but an improvement on October’s fall of 23.2%. Still, Wade forecasts a 1% cut to interest rates and a cut to banks’ reserve requirement ratios of 2% will be needed to support the Chinese economy next year: “We think that growth is going to be persistently weak,” he adds.