Editorial | Beijing can help boost economy by reducing level of uncertainty
- China needs to make its policy direction clearer to investors and explain the rationale behind it, while also making changes soon to anti-Covid measures
Signs of a recovery in economic growth in China’s official statistics continue to be mixed and affected by Covid-related measures.
For the first time in three months, factory activity expanded in September, with the manufacturing purchasing managers’ index (PMI) rising from 49.4 to 50.1, just in positive territory.
But a fall from 52.6 to 50.6 in the non-manufacturing PMI, which measures sentiment in the services and construction sectors, may be down to anti-Covid moves.
On balance the data indicates the economy has begun to stabilise after growth slumped to 0.4 per cent year on year in the second quarter.
Analysts say growth now hinges on hopes for significant relaxation of Covid measures after the Communist Party’s 20th national congress later this month. Without it progress will be more difficult, even with Premier Li Keqiang having personally driven supportive policy steps in the last quarter.
Beijing has been rolling out measures since May, including tax cuts and infrastructure spending, to cushion headwinds facing the economy and boost investor confidence.
02:17
Chinese tourists return to Shanghai for first ‘golden week’ holiday since Covid rules eased