Sales of excavation equipment in China are booming, suggesting that Beijing’s stimulus package is starting to filter into the economy. The country’s 25 leading excavator makers sold 44,278 units in March, the highest monthly sales on record, according to data from the China Construction Machinery Association (CCMA). This was a 15.7 per cent increase on March 2018 and followed 68.7 per cent growth in February. Excavator sales are widely viewed as a “barometer” of the country’s infrastructure investment and economic vitality, given the necessity of digging machines in construction projects and the fact that China’s domestic growth has long been backed by infrastructure and real estate development. “[The robust excavator sales in March] might be a beginning signal of a big wave of infrastructure and investment,” Zhao Jian, head of the Atlantis Finance Research Institute, wrote in his latest note. The news comes amid recognition in Beijing that local government infrastructure spend will be the main method of stimulating domestic demand and bolstering economic growth. It also comes ahead of the release of official gross domestic product (GDP) growth figures for the first quarter of the year on Wednesday, which is forecast to be 6.2 per cent, within the government’s target of 6.0 to 6.5 per cent, but the weakest quarterly growth China would have seen in 29 years Sales figures for other industrial machinery added more evidence to the suggestion that stimulus plans are beginning to break ground in the real economy. Sales of mobile crane trucks jumped by more than 60 per cent in the first two months of 2019 compared to a year earlier, according to the CCMA. Sales of heavy trucks, meanwhile, rose 4 per cent in March, year-on-year, to 144,000 units – the highest monthly sales on record, according to the industrial information provider cvworld.cn. Earlier signs that China’s industrial economy was kicking into gear came in the 6.1 per cent growth reading for fixed asset investment during January and February, up from 5.9 per cent over the first two months of 2018, according to the National Bureau of Statistics (NBS). This counts any investment in physical assets, such as real estate infrastructure and machinery. It is viewed as another finger on the pulse for the construction and property sectors. Along with pushing infrastructure investment, Beijing had also relaxed its grip on its deleveraging campaign to ensure enough money gets to local governments, via the issuance of special purpose bonds for infrastructure projects. Banks in China issued a record 5.81 trillion yuan (US$418.9 billion) in loans the first quarter of this year, according to latest data from the People’s Bank of China released on April 12. Total outstanding credit growth accelerated to 10.7 per cent in March, the highest spurt since August of 2018. “Epic growth of money and credit showed [Beijing’s] determination in revitalising the economy,” Hong Hao, head of research at Bank of Communication International, wrote in a note. This strong investment and credit picture has helped shore up confidence in the Chinese economy in the first quarter, after a dark year in 2018, which was mired in the impact of the US-China trade war and a consumption slump. Goldman Sachs Gao Hua recently revised up forecasts for the growth of China’s GDP for both the first quarter and the whole year of 2019 to 6.3 per cent from 6.2 per cent, respectively. Euler Hermes, the trade credit insurer, also revised up its forecast for the annual economic growth rate of China by 0.1 per cent to 6.4 per cent. However, economists said the bottoming-out of the world’s second largest economy has yet to arrive, as domestic demand is still weak and the effect of stimulus could be limited. “Disappointing imports [in March] suggest that domestic demand may not be holding up as well as hoped,” Julian Evans-Pritchard, senior China economist of the Capital Economics, wrote in a recent note. “There is no ‘new story’ about home-grown driving forces of the economic growth … the stabilisation of the Chinese economy is still lacking strong evidence,” Tan Han, an analyst at Guotai Jun’an wrote in another note.