ZCZC
BCN-21
CHINA-ECONOMY-GROWTH-LEAD
China growth beats forecasts as economy shows signs of stability
BEIJING, April 17, 2019 (BSS/AFP) – China’s economy expanded more than
expected in the first three months of the year as government moves to
kickstart growth helped offset weak global demand and a US trade war, data
showed Wednesday.
The 6.4 percent reading was the latest in a string of figures indicating
the world’s number-two economy and key driver of global growth is stabilising
after decelerating every quarter last year, though officials warned of
headwinds.
“The national economy enjoyed stable performance with growing positive
factors, and stronger market expectation and confidence,” said National
Bureau of Statistics spokesman Mao Shengyong.
“Given slowing global economic growth and international trade, increasing
international uncertainties and prominent domestic structural issues, the
task of reform and development is arduous and downward pressure on the
economy persists,” said Mao.
Top policymakers in Beijing last month unveiled a number of major plans to
support the flagging economy with massive tax cuts, fee reductions, and
financing support.
Officials pressed on with the drive to shift China to a more sustainable
growth model, strengthened policies to counter the downturn and “spared no
effort to put the policies into effect”, said Mao.
Beijing faces a delicate balancing act as it tries to support businesses
in need of credit, without further inflating its debt balloon.
– A strong March –
New credit flooded into the financial system last month, with the growth
of bank loans and total outstanding credit accelerating — thanks to measures
to boost lending — though analysts say it will take about six months to
spark a full economic turnaround.
“The better-than-expected (first quarter) figures reflect a strong March,”
said Julian Evans-Pritchard of Capital Economics in a note, adding seasonal
factors could have contributed to the uptick.
“With credit growth now accelerating and sentiment improving, China’s
economy will bottom out before long if it hasn’t already,” he said.
MORE/HR/1100
ZCZC
BCN-22
CHINA-ECONOMY-GROWTH-LEAD 2 LAST BEIJING
The government lowered its growth target for China this year to 6.0-6.5
percent, having chalked up its slowest pace for almost three decades in 2018.
However, while growth remains relatively slow, the crucial unemployment
rate remains low and fell to 5.2 percent in March from 5.3 percent in
February.
Beijing is counting on consumers and renewed investment to stabilise the
economy.
The latest data showed retail sales for March rose 8.7 percent on-year
after stagnating at 15-year lows for three months, though data Friday
revealed imports plunged in the first quarter, feeding worries about weak
demand.
And infrastructure spending expanded 4.4 percent in the first three
months, sharply up from 3.8 percent last year when the government stepped up
a campaign against debt and financial risk.
– PBoC stimulus ‘caution’ –
The broader fixed-asset investment indicator rose 6.3 percent for the
first three months of the year, from 6.1 percent in January-February.
Output growth at China’s factories and workshops in March shot up 8.5
percent, from 5.3 percent in the first two months, well above forecasts.
The figures come after a number of positive indicators on the economy,
including improving factory activity and inflation, pointing to a brighter
outlook.
“From Beijing’s perspective, this set of data should show that the policy
reset in mid-2018 from de-leverage to growth support is starting to yield
results,” said Tai Hui, chief market strategist for Asia-Pacific at JP Morgan
Asset Management.
Investors who have ploughed back into Chinese stocks have been counting on
continued stimulus from Beijing but with the economy steadying leaders could
pull back from further support, analysts warned.
“The People’s Bank of China appears to be more cautious about further
easing,” said Raymond Yeung, an economist at ANZ bank.
“We believe that policymakers will reassess the need for further
stimulus,” he said in a note.
Another drag on the economy, the US-China trade war, appears to be
approaching a resolution with both sides sounding notes of optimism that a
deal will be done.
The two sides have exchanged tariffs on more than $360 billion in two-way
trade, hurting manufacturers in China and farmers in the US.
BSS/AFP/HR/1105