China voices new optimism on economic growth as US trade war tensions ease, industrial engine rebounds

Policymakers are increasingly upbeat about economic prospects after a rebound in industrial production last month and a phase one trade deal with the US

As a result, Beijing has no plans to launch major fiscal stimulus to boost slowing growth, says top economic planning agency

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A breakthrough in trade negotiations with the US and a rebound in November’s industrial production has led to increased optimism in China. Photo: AFP

Published: 7:26pm, 17 Dec 2019Updated: 10:18pm, 17 Dec 2019

An increasingly upbeat mood is emerging in Beijing about growth prospects after a surprise improvement in November’s economic indicators and a trade war truce with the United States.

Beijing and Washington agreed on Friday on the text of a phase one trade deal that will halt the introduction of new tariffs and lower some already in place, providing a boost in confidence for the Chinese economy.

Alongside the breakthrough in trade negotiations, China’s industrial production and retail sales both grew faster than expected last month, data from the National Bureau of Statistics showed, although economists were divided on whether it signaled the growth rate had bottomed out or it was simply a seasonal rebound.

“For current and future periods, the basic trend of the Chinese economy remains unchanged … [it is] making progress in the long term while maintaining overall stability,” said Meng Wei, spokeswoman of the National Development and Reform Commission (NDRC), the country’s top economic planning agency.

The government was confident it could reach its economic and social development goals in 2019, she said on Tuesday, adding China had already hit its employment target for this year and was on track to keep annual consumer inflation below the upper limit of 3 per cent.