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Perhaps the biggest uncertainty in the global economy these days is the slowdown in China, but the latest data dump suggests that the situation isn’t as bad as you think. Or have forex market watchers set the bar low and accepted the new normal in the Chinese economy? Here’s a rundown of the freshly released reports:

1. Q3 2015 GDP: 6.9% actual vs. 6.8% forecast, 7.0% previous

The Chinese economy expanded by 6.9% during the third quarter of the year, slightly above the estimated 6.8% figure and just a notch below the previous quarter’s 7.0% expansion. Although this is the country’s slowest pace of growth in more than six years, I guess you could say that this is still within the government’s annual economic growth target of “around 7%” for the year.

On a quarterly basis, this equates to 1.8% growth for Q3 2015, which isn’t THAT terrible compared to previous reporting periods.

china gdp

Components of the report indicate that the services sector was mostly responsible for shoring up growth even as the manufacturing industry suffered a downturn. As it turns out, the services industry accelerated to 8.4% growth during the period while the manufacturing sector slowed to just 6%.

According to Zhu Haibin, chief China economist at JPMorgan in Hong Kong, this highlights the two-speed economy of China as the services sector is growing much faster. However, he also noted that the slowdown in manufacturing could prove to be a problem in the near-term.

2. Industrial production: 5.7% actual vs. 6.0% forecast, 6.1% previous

The industrial production report reflected the manufacturing industry slump with its weaker-than-expected 5.7% increase versus the projected 6.0% rise and the previous 6.1% gain. This didn’t seem to be too much of a disappointment, though, as forex analysts anticipated a much weaker figure after seeing the downbeat export figures last week.

3. Retail sales: 10.9% actual vs. 10.8% forecast and previous

On a more upbeat note, retail sales surpassed expectations with a 10.9% gain in September versus the projected 10.8% increase. Economic analysts attributed this strength to the massive amounts of stimulus pumped out by the Chinese government and the central bank a few months back, as authorities scrambled to boost financial confidence and liquidity after the stock market crash in July and August.

4. CPI: 1.6% actual vs. 1.8% forecast, 2.0% previous

The latest CPI report indicated subdued inflation, with the headline figure falling from 2.0% to 1.6% in September, lower than the 1.8% consensus. However, this could prove to be positive for domestic spending, as cheaper goods and services could encourage consumers take advantage of bargain price levels.

Now this could be a good test of the strength of the local economy, especially if the consumer sector shows enough resilience to make up for the downturn in trade activity. For now, however, data on imports showed that local demand has taken a huge hit.

5. Trade balance: $60.3 billion vs. $45.9 billion forecast

Last week’s trade balance release came in better than expected at $60.3 billion versus the estimated $45.9 billion surplus, but these headline figures were misleading. Underlying data showed that imports were down by a whopping 17.7% year-over-year in September while exports slumped by an annualized 1.1% in yuan-denominated terms.

Of course this may be exactly what the PBoC had in mind when they decided to announce yuan devaluation back in August. After all, local currency depreciation winds up making exports cheaper and imports more expensive, thereby influencing demand for both Chinese and foreign products.

In a nutshell, it looks like the Chinese economy hasn’t gone completely underwater just yet, which might be enough to keep the Aussie afloat against its forex peers for the time being. While the manufacturing industry is in a rut, the central bank’s efforts to keep the yuan weak and stir external demand might be enough to boost export activity and production later on. Meanwhile, falling price levels could spur stronger domestic spending, as consumers don’t seem to be troubled for now.

What’s your take on the latest economic reports from China? Have market analysts overestimated the effect of the Chinese slowdown on the global economy and the forex market? Or is this just the tip of the iceberg when it comes to China’s deteriorating performance?