China: China’s stock output increased between January and February, beating expectations, making it a strong start for 2024 and providing some temporary relief to policymakers looking to resurrect stagnant economic growth.
In the first two months of the year, industrial output increased by 7.0 percent, according to data released by the National Bureau of Statistics ( NBS ) on Monday ( Mar 18 ), exceeding expectations for a 5.0 percent increase in a Reuters poll of analysts and more than the 6.8 % increase seen in December. Additionally, it experienced the quickest rise in about two years.
Retail income, a measure of use, rose 5.5 per share, slowing from a 7.4 per cent increase in December. Retail sales were anticipated to increase by 5.2 %, according to experts.
Tourism and hospitality industry revenues increased during the eight-day Chinese New Year holiday in February, which also generated strong profits.
Compared to expectations for a 3.2 % increase, fixed asset investment increased by 4.2 % in the first two months of 2024 in comparison to the same period a year earlier. It grew 3.0 per share in the whole of 2023.
The signals from Monday will provide some temporary assistance to politicians as they try to sea up progress in the nation’s second-largest market in order to keep it on track for an expansion of around 5 % this year, along with better-than-expected trade information and consumer prices.
However, according to analysts, achieving this development would be more difficult than the previous month, which had a lower bottom effect as a result of COVID- 19 curbs in 2022. Additionally, the housing industry is still in decline and may continue to be a major drag on a successful treatment this time.
Home purchase slid 9.0 per share year- on- season in January- February, compared with a 24.0 per cent fall in December but still far from levels of reaching stability.
To correct for any errors brought on by the shifting nature of the Lunar New Year, the NBS publishes combined industrial production and retail sales statistics for January and February. COVID- 19 limits were removed, which may have a less attractive base effect on this year’s data. In the first two months of 2023, activity increased.
Premier Li Qiang made a promise at the end of the month’s monthly legislative session to overhaul the nation’s development strategy and lessen risks in the local government debt and property sector.
China intends to set a higher limit for local authorities specific bond issuance this year and issue 1 trillion yuan in particular ultra-long-term Treasury bonds to help some important sectors.
Following a 50 basis points reduction announced in January, which was the largest in two years, the nation’s central bank governor Pan Gongsheng also stated at a press conference on March 6 that there was still room to cut banks ‘ reserve ratio requirement ( RRR ).
After leaving a crucial policy rate unchanged while pulling cash from a medium-term policy loan operation for the first time in 16 months, the central bank-backed Financial News reported on Friday.
Authorities in January launched a “whitelist” mechanism, asking state banks to boost lending to residential projects. Shanghai and Shenzhen, two other major cities, have also lowered purchase restrictions to entice homebuyers.
The job market worsened with the nationwide survey- based jobless rate at 5.3 per cent in January- February, up from 5.1 per cent in December.