Is China’s economy on the brink of a new boom? Digging for answers in industrial numbers
A huge spike in sales of heavy construction machinery supports the idea that the good times are returning
After a slew of signs pointing to strong growth momentum, the question being asked about China’s economy has changed: from “Will it crash?” to “Is it about to take off?”
A spike in sales of construction equipment, along with improved profitability at industrial enterprises and a hefty surge in the prices of raw materials such as coal and steel, is fuelling the debate about whether China has entered a new boom cycle.
Ren Zeping, chief economist at Beijing-based Founder Securities and a former researcher for China’s cabinet, is a leading advocate of the “new cycle theory”.
In an article published last week on his social media account, Ren said China was at the start of a new boom cycle because its industrial oversupply problem had largely been resolved after years of deflation and capacity reduction.
The latest positive indicator came from the excavating machinery branch of the China Construction Machinery Association, which announced that sales of excavators in China in the first eight months of the year rose by a massive 111.1 per cent year on year to 85,766.