A gauge for consumer services sales growth rose to a 21-month high. The picture shows industrial robots ready for sale.
A gauge for consumer services sales growth rose to a 21-month high. The picture shows industrial robots ready for sale.

China Economy Remains Stable

The economic outlook improved slightly in February while expectations for the coming year lingered well below the long-term average

China Economy Remains Stable

China’s economy remained generally steady during the Lunar New Year while sentiment readings show uncertainties over the outlook, according to the earliest private data for February.
Sales managers perked up and satellite data showed activity hanging near a five-year high. Meanwhile, the financial world’s outlook for next 12 months remained in negative territory and a gloomier mood settled in over the steel sector, Bloomberg reported.
The world’s No. 2 economy has picked up in recent months as trade improves, producer prices continue to rebound and manufacturers remain upbeat. That gives policy makers more breathing room as they work to contain a credit boom that’s fueled the resurgence.
It may be too early to tell where the economy is going this year from the February data, as statistics in the first two months are usually distorted by the Lunar New Year, when hundreds of millions of people travel home and factories shut for days or weeks. This year, the holiday straddled the last week of January and the first week of February.
Mixed Expectations
Earliest indicators show that the economic outlook has improved slightly in February while expectations for the coming year lingered well below the long-term average, according to the China Economic Panel, a joint project of The Center for European Economic Research, ZEW, in Mannheim, Germany, and Fudan University in Shanghai.
The panel surveys international financial market experts on their assessment of China’s economy. The readings, 4.3 for the current situation and minus 4.2 for the future outlook, are balances of percentage of positive answers minus percentage of negative answers.
The China Satellite Manufacturing Index edged down to 51.1 this month from a five-year high of 52 in January, according to San Francisco-based SpaceKnow Inc., which uses commercial satellite imagery to monitor activity across thousands of industrial sites. Like the official manufacturing purchasing managers index, readings above 50 indicate improving conditions.
Smaller Businesses
Standard Chartered Plc’s Small and Medium Enterprise Confidence Index rebounded to 56.3 this month from 55 in January. While current activity weakened amid seasonal disruptions from the holidays, the sub-index tracking expectations for the next three months improved.
“The outlook readings reflect greater confidence in a near-term recovery,” economists Shen Lan and Ding Shuang at the bank wrote in a report. Corporate expectations for yuan depreciation “became more balanced” with fewer expecting a sharp drop, they wrote.
A survey-based gauge of sales manager sentiment from World Economics Ltd. picked up to 51.8 in February from 51.4 in January. A gauge for consumer services sales growth rose to a 21-month high.
"Improving sentiment is being vindicated by solid sales and market growth," the London-based firm wrote in a note. "The jobs market appears stable with little change reported month-on-month."
Steel Gloom
The S&P Global Platts China Steel Sentiment Index slumped to 25.21 this month from 34.13 in January. The gauge is based on a survey of about 75 to 90 China-based market participants including traders and steel mills.
“The outlook is much more bearish than the current steel and iron ore price spike would suggest," Paul Bartholomew, a senior managing editor at S&P Global Platts in Melbourne, wrote in an e-mail. The data are affected by the Lunar New Year, he said in the report.
Bankruptcy Cases Surge
Bankruptcy cases surged in China last year, indicating growing economic stress as well as progress in the ruling party’s efforts to use the country’s courts to deal with indebted “zombie” companies and reduce industrial overcapacity.
Chinese courts accepted 5,665 bankruptcy cases in 2016, an increase of 54% from the year before, the country’s top court said on Friday. About 3,600 of those cases were resolved, with 85% of the resolved cases resulting in liquidation.
“It is linked to getting rid of zombie companies and making the economy more efficient,” said Susan Finder, law scholar in residence at Peking University’s Shenzhen Graduate School. “Provincial courts state this when they report the number of bankruptcy cases. The idea is to save the companies that can be saved and liquidate the ones that can’t.”


Short URL : https://goo.gl/4T0jmd
  1. https://goo.gl/8Kgw5W
  • https://goo.gl/pk4LLI
  • https://goo.gl/hRJgT9
  • https://goo.gl/4Sq964
  • https://goo.gl/nhLgsh

You can also read ...

Westinghouse Electric, the leading US nuclear fuel producer, said it relies on China for zirconium and zirconium powder  for use in nuclear fuel assemblies
A broad cross-section of US businesses has a message for the...
Argentina Lacks Options to Defend Peso
With interest rates sky-high and the economy heading for...
BMW Seeking Broader China Collaboration
The opening-up is an important policy and German carmaker BMW...
Turkey, Qatar in Currency Swap Deal
The central banks of Qatar and Turkey signed a currency swap...
UK Business Pessimism Rising
Business leaders’ confidence in the British economy has fallen...
Vehicle loans have rapidly expanded as cars purchased during a tax rebate scheme for first cars  in 2012-13 have begun to be replaced.
Consumer borrowing is accelerating significantly in Thailand...
International Labor Organization has called for stronger...
Asian Countries Vie to Set Up Crypto Valleys
The race to establish cryptocurrency hubs in Asia is gathering...

Add new comment

Read our comment policy before posting your viewpoints