China’s economy is showing signs of recovery but it’s not out of the woods yet
- Industrial production and real-estate investment have hit highs, and recovery is in sight for carmakers as the Chinese economy looks to have turned a corner
The latest March economic data has put a spring in the step of the world’s second-largest economy.
China’s economic data for March exceeded market expectations and went beyond the effect of temporary seasonal factors, against a backdrop of solid gains in forward-looking indicators such as credit growth, house sales and factory orders.
It is quite possible that China’s policy cycle has reached an inflection point, even though a turning point — from policy easing to policy tightening — is still a long way off.
The key surprise came from the across-the-board strength in industrial production, which surged in March to its highest since 2014. In particular, car production, which had been a major reason for the recent months’ slowdown in industrial production, posted a narrower decline.