China’s econ­omy picked up in De­cem­ber, in­di­ca­tors show

Muscat Daily - - BUSINESS -

Bei­jing, China - China’s eco­nomic per­for­mance im­proved in De­cem­ber for the first time in eight months, ac­cord­ing to a group of ear­li­est-avail­able in­di­ca­tors com­piled by Bloomberg.

Pro­duc­tion in the world’s sec­ond-largest econ­omy ac­cel­er­ated as do­mes­tic de­mand sta­bilised, and mar­ket sen­ti­ment turned around on the prospect of a trade deal with the US.

The read­ing is the lat­est sign that Chi­nese econ­omy is at or close to a cycli­cal bot­tom after ac­tiv­ity im­proved in Novem­ber on a global de­mand re­bound. While ac­cept­ing that out­put is on a longer-term slow­ing trend, pol­icy mak­ers have sought to pre­vent a sharp de­cel­er­a­tion into 2020 through a wide-range of mea­sures to sup­port con­sump­tion, labour mo­bil­ity and the pri­vate sec­tor.

That’s led some econ­o­mists to up­grade their growth fore­casts for 2020, cur­rently seen just edg­ing be­low 6 per cent. Prof­its at Chi­nese in­dus­trial en­ter­prises re­bounded in Novem­ber, data re­leased on Fri­day showed, as fac­tory-gate de­fla­tion eased and do­mes­tic de­mand im­proved.

“The read­ing sig­nals a brighter be­gin­ning for the com­ing new year. We ex­pect that strength to ex­tend in com­ing months, but the sus­tain­abil­ity of the im­prove­ment in the longer term is still in ques­tion - as we ex­pect the econ­omy to con­tinue to slow next year,” Qian Wan, econ­o­mist at Bloomberg Eco­nom­ics in Hong Kong, said.

Still, gauges of the man­u­fac­tur­ing sec­tor in the US, euro area and Ja­pan mod­er­ated in De­cem­ber after a strong re­cov­ery in the previous month, likely weigh­ing on China’s ex­ports. The Na­tional Bureau of Sta­tis­tics on Fri­day warned that down­ward eco­nomic pres­sure was still lin­ger­ing, and that ‘volatil­ity and un­cer­tainty’ re­main. Quick­en­ing pro­duc­tion is ev­i­dent in surg­ing cop­per prices, which jumped to eight-month high, as well as in ris­ing stocks. Ex­ports from South Korea - whose largest trad­ing part­ner is China - re­mained in con­trac­tion in the first 20 days of the month, though the de­cline has nar­rowed.

A gauge of small busi­nesses by Stan­dard Char­tered Plc rose to the high­est since April, sug­gest­ing in­creas­ing op­ti­mism among pri­vate and ex­port-ori­ented firms. The US is ex­pected to lift some of the tar­iffs im­posed on Chi­nese goods after the phase-one deal is signed, po­ten­tially early next month.

The de­cline in a Bloomberg tracker of pro­ducer prices started to nar­row after months of deep­en­ing con­trac­tion, in­di­cat­ing fac­tory-gate prices could re­sume gain­ing in com­ing months to help lift the nom­i­nal growth of the econ­omy.

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