Econ­omy sta­bi­lizes in first quar­ter

China Daily (Canada) - - FRONT PAGE - By WANG YANFEI and XIN ZHIMING in Bei­jing

China’s econ­omy has sta­bi­lized, ac­cord­ing to the lat­est growth data for the first quar­ter, with an of­fi­cial at the Na­tional De­vel­op­ment and Re­form Com­mis­sion hail­ing this as an “aus­pi­cious start”.

Although still at its low­est point in 25 years, the slow­down of the past two years has been ar­rested.

Fi­nan­cial in­sti­tu­tions are be­gin­ning to raise their fore­casts for China made at the start of the year.

The GDP growth rate in the first quar­ter will not fall no­tice­ably lower than last year’s 6.9 per­cent, of­fi­cials and an­a­lysts said.

“Al­most all eco­nomic in­di­ca­tors im­proved in March,” said an of­fi­cial from the Na­tional Bureau of Statis­tics. The av­er­age fore­cast by econ­o­mists sur­veyed by Reuters is 6.7 per­cent.

Zhao Chenxin, spokesman for the Na­tional De­vel­op­ment and Re­form Com­mis­sion, said ma­jor eco­nomic in­di­ca­tors show that the eco­nomic fun­da­men­tals have im­proved, although it is too early to say that the econ­omy has started to bot­tom.

In the first two months, fixedas­set in­vest­ment in­creased by 10.2 per­cent year-on-year, up by 0.2 per­cent­age points com­pared with the whole of last year. In­vest­ment in new planned projects in­creased by 41.1 per­cent in the same pe­riod year-on-year, the high­est growth since 2010.

“The trend has con­tin­ued in March,” Zhao said.

Prices of ma­jor raw ma­te­ri­als, such as steel, have risen sig­nif­i­cantly, and the pro­ducer price in­dex, which gauges fac­tory-gate prices, rose for the first time since Jan­uary 2014 on a month-on-month ba­sis, he said.

Cor­po­rate prof­its in­creased by 4.8 per­cent year-on-year in the first two months, re­vers­ing the trend of fall­ing profit last year. It marked the first monthly in­crease since June, Zhao said.

Home sales and fis­cal rev­enues also picked up in the first two months, the spokesman said.

China’s ex­ports rose by the most in a year, and im­port de­clines nar­rowed, send­ing a clearer sig­nal of sta­bi­liza­tion in the na­tion’s econ­omy.

Ex­ports rose by 11.5 per­cent in dol­lar terms in March yearon-year, com­pared with a 25 per­cent fall in Fe­bru­ary, when busi­ness ac­tiv­i­ties cooled due to the week­long Spring Fes­ti­val hol­i­day. Im­ports con­tin­ued to fall, by 7.6 per­cent from a year ago, cus­toms data showed.

Premier Li Ke­qiang said on Wed­nes­day that China’s eco­nomic growth is “still within an ap­pro­pri­ate range and pos­i­tive fac­tors are in­creas­ing”, ac­cord­ing to a China Cen­tral Tele­vi­sion re­port. But he also said that since the world eco­nomic re­cov­ery is frag­ile, China still faces chal­lenges.

Nor­mura econ­o­mists said in a re­search note that China’s rail­way freight and elec­tric­ity con­sump­tion growth im­proved con­sid­er­ably in the first quar­ter, which re­flects sta­bi­lized in­dus­trial pro­duc­tion growth.

“Th­ese data are con­sis­tent with the im­prove­ment in trade data and point to a small im­prove­ment in real econ­omy growth mo­men­tum, es­pe­cially do­mes­tic de­mand, from stronger fis­cal eas­ing and in­creased prop­erty in­vest­ment growth,” the re­port said.

Keun Lee, an econ­o­mist at Seoul Na­tional Univer­sity, said he is con­fi­dent in China’s stable growth.

“A growth rate of 6 per­cent to 7 per­cent is suitable for China,” he said on Wed­nes­day on the side­lines of an eco­nom­ics fo­rum.

Con­tact the writer at xinzhim­ing@chi­nadaily.com.cn

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