China expected to resume role as driver for global economy, BlackRock says

‘We are increasingly confident that Chinese growth is likely to re-accelerate from the second quarter onward,’ the investment firm said

Beijing’s fiscal and monetary policies have started to show results, according to BlackRock researchers

2-MIN READ2-MIN

A report from BlackRock says China’s economy is expected to grow more quickly in the second quarter. Photo: Reuters

Published: 5:11am, 19 Apr 2019Updated: 6:52am, 19 Apr 2019

China’s economy, a drag on global growth last year because of a domestic slowdown, is expected to grow more quickly in the second quarter to become the key economic driver for the world, research by BlackRock shows.

More expansive fiscal and monetary policies by Beijing have started to show results that may help to reverse a slowdown that has hit Europe and emerging markets particularly hard, researchers at BlackRock Investment Institute, the research unit for BlackRock Inc, said in Thursday’s report.

That slowdown, they said, was driven by a tighter economic policy pursued by China and the trade war with the US.

“We are increasingly confident that Chinese growth is likely to re-accelerate from the second quarter onward,” said Richard Turnill, global chief investment strategist that led the research.

“The turnaround is already visible in the services sector,” which resumed growth in late 2018 after contracting earlier in the year, according to BlackRock’s index, which tracks Chinese services, manufacturing and trade. BlackRock is the world’s largest investment firm with US$6 trillion in assets.

Manufacturing and trade, the other two categories tracked in the report, had yet to show improvement, the researchers pointed out, adding that they expected these sectors’ overall readings to pick up in coming months.