China on the road to recovery

Written on the 22nd of May 2009

The Chinese economy continued to show signs of improvement in the latest April data.  Retail sales rose at a 14.8 per cent annual rate but were even higher in real terms.  And industrial production expanded at a 7.3 per cent annual rate.

Just like other parts of the globe, China has been impacted by the Global Financial Crisis. But importantly the substantial deterioration in activity noted in the December quarter has not continued in recent months with the economy appearing to stabilise. The latest figures on investment, retail sales and even the real estate sector are encouraging, pointing to growth over the next six months.

The result of the China’s US$770 billion stimulus policy are plain to see. Investment lending has soared over the past few months to stand almost a third higher than a year ago. And retail sales are growing at a faster pace in real terms than in early 2008. Authorities responded forcefully to the last slowdown, they are doing the same this time around with the early results looking positive.

Source - CommSec Economic Insights Report