China Economic Data Show Signs Slowdown May Be Easing, As Central Bank Acts To Support Growth
September 15, 2023
Factories in China have picked up their speed, and the retail sales have gotten momentum in August, as per the government reports on Friday, which suggested that the economy might be recovering gradually from its post pandemic depression.
However, despite the busy activities in stores and restaurants, the figures showed a continuous weakness within the all important property sector, where the real estate developers have been struggling to pay the rock load of debts within a time of slack demand.
Real estate investments fell by 8.8% in August from the previous year. The fall has only worsened since the start of the year.
To relieve the burden that has been given to banks, the central bank, or the People’s Bank of China, announced on Thursday that the requirement for reserve for a maximum of the lenders will be lowered by 0.25% as of Friday.
This would free up a lot more money for lending.
“In order to consolidate the foundation for economic recovery and maintain reasonable and sufficient liquidity,”
the central bank added.
“Overall, in August, major indicators improved marginally, the national economy recovered, high-quality development was solidly advanced, and positive factors accumulated,”
the spokesperson of the National Bureau of Statistics, Fu Linghui, said to the reporters.
But, Fu also mentioned that there are
“still many external factors of instability and uncertainty”
and that domestic demand is still weak, so
“the foundation for economic recovery still needs to be consolidated.”
“Fiscal support shored up investment but the real bright spot was a healthy pick-up in consumer spending, suggesting that households may be turning slightly less cautious,”
he added.
“There’s a growing sense of optimism among a cohort of investors who believe that Beijing’s recent initiatives to stimulate the economy and stabilize financial markets are showing signs of success,”
said Stephen Innes, SPI Asset Management.
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