Looks Like Beijing Might Be Bouncing Back

Looks Like Beijing Might Be Bouncing Back

8 months ago2 mins

Friday's fresh data showed that China could be feeling its long-awaited economic rebound.

What does this mean?

China’s first official economic activity indicator for last month is out, and it's good news: local government efforts to boost folks' spending seem to be working, with households finally more willing to splurge and travel – a key sticking point since Covid restrictions were relaxed. On top of that, warmer weather has kicked building projects into high gear across the country, helping one construction activity gauge hit an all-time high. That meant an index tracking non-manufacturing sector activity grew at its fastest pace in over ten years – and even though manufacturing itself slowed slightly from February, it still outpaced economists' predictions. The takeaway: these signs suggest the world's second-largest economy is seeing the kind of bounceback that we’ve all been waiting for.

China PMI

Why should I care?

The bigger picture: Still some sore spots.

This news is a shot in the arm, and the momentum’s expected to hold up: in fact, economists think that China could breeze past its 5% economic growth target this year as a result. What's more, domestic demand kicking back in will be a genuine relief for the government: after all, that slowdown in the manufacturing sector is a genuine worry, and there’s a chance it’ll continue as global growth keeps dropping off. And that’ll leave a whole lot of slack for other areas – like consumer and government spending – to pick up.

For markets: Investor heaven.

The update has investors smiling – and the government’s promise to introduce measures improving market access and the business environment didn’t hurt either. Plus, markets should receive another extra boost before long: Alibaba’s already started talks about listing its logistics arm, and JD.com has applied to list two of its subsidiaries – another sign the government is warming to the private sector.

Chinese IPOs
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