China's economy is showing further signs of recovery after months of slowdown, although bearish pressures still persist, according to available indicators on market sentiment and business conditions.
Stocks and small business sentiment boosted, while trade data and a survey of sales managers signaled broader gains. At the same time, copper prices and factory inflation indicated weakness.
To mitigate the slowdown in economic growth, the government has channeled credit to small businesses and this month announced the largest tax cut ever. News that China and the US are close to a trade deal also gives cause for optimism, although the gloomy outlook for global trade has long been a basis for caution.
The economy is still at some "distance from a self-sustaining recovery when political stabilization begins," said David Ku, an economist at Bloomberg in China. "Government-led investment will play a more important role in stabilizing the economy."
The policy effect is evident in Standard Chartered Plc's survey of more than 500 small and medium-sized enterprises, as the indicator climbed to its highest level in 10 months. Both domestic and foreign demand recovered, increasing sales and production, according to the indicator sub-indices. The credit conditions indicator jumped to its highest level since 2017.
For pessimists, the data will not dispel all concerns. Metal prices and general factory inflation do not bode well for producers. Profits for Chinese industrial companies were the worst since the beginning of the year since the global financial crisis, with profits in the auto, oil refining, metallurgy and chemical sectors falling significantly.
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Metallurgy news
- 29 April 2024
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