World Economy

China Economy Remains Stable

China Economy Remains StableChina Economy Remains Stable

China’s economy remains steady this month even amid efforts to cool property markets, according to some of the earliest private economic indicators.

A manufacturing gauge based on satellite imagery jumped to a five-year high, large companies are more confident, and steel manufacturers are booking more orders after a holiday blip in October. Meanwhile, small and medium-sized firms are less optimistic about the future because of real estate curbs and cuts to trim excess capacity, Bloomberg reported.

The world’s second-largest economy has so far proved doubters wrong this year, lifted by record-low benchmark interest rates the People’s Bank of China has kept in place since late 2015. Now policy makers face the tricky task of cooling property prices without hurting growth. The challenge is made even more difficult by threatened trade sanctions from US president-elect Donald Trump and the yuan trading near an eight-year low.

Here are what the earliest indicators show:

Satellite View: The China Satellite Manufacturing Index rose to 51.4 this month, the highest since mid-2011, according to San Francisco-based SpaceKnow Inc., which uses commercial satellite imagery to monitor activity across thousands of industrial facilities. Like the official manufacturing purchasing managers index, readings above 50 indicate expansion. The official PMI and a private counterpart both increased to two-year highs last month.

Steel Jump: The S&P Global Platts China Steel Sentiment Index jumped to 59.37 from 48.92 in October as market sentiment improved on higher prices and stronger orders. The gauge is based on a survey of about 75 to 90 China-based market participants including traders and steel mills.

Large Companies: Business leaders signaled that conditions at large companies are holding up. The Market News International China Business Sentiment Indicator rose to 53.1 this month from 52.2 in October. The index is based on a survey of executives of companies listed on the Shanghai and Shenzhen stock exchanges.

Sales Managers: A survey-based gauge of sales manager sentiment from World Economics Ltd. remained unchanged at 51.2. A sub-index for the consumer sector performed best at 53.9 while the manufacturing index stood at 49.9, indicating stagnation.

Smaller Businesses: Standard Chartered Plc’s Small and Medium Enterprise Confidence Index declined to 55 in November from 56.1 in October. While current activities improved slightly this month, a sub-index in expectations fell to a 10-month low of 57, Shen Lan, a Beijing-based China economist, wrote in a report. Bank lending to smaller firms also decelerated, Shen wrote.


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