Steel leads surge in business activity in China
China’s business activity surged to a 17 month high in August, providing fresh evidence that the protracted economic slowdown in China may be bottoming out.
National Bureau of Statistics said that industrial production gained 10.4% from a year earlier, picking up from the pace of 9.7% in July and June’s 8.9%.
It was led by the steel sector, an indication that railway and property investment has warmed up.
Fixed-asset investment grew 20.3% to CNY 26.2 trillion (USD 4.2 trillion) in the first eight months, up 0.2 percentage points from that in the first seven months and slightly above market expectations, the bureau’s data showed.
Retail sales, an indication of consumer demand, edged up 13.4% to CNY 1.88 trillion in August, faster than the increase of 13.2% a month earlier.
Mr Zhou Hao an economist at Australia & New Zealand Banking Group Ltd said that “China’s August real activity data came in stronger than expected. They help to sustain the market rally due to improving market sentiment towards China’s economy.”
China’s economy expanded 7.5% from a year earlier in the second quarter of this year, extending the moderation for more than two years. But the economy has exhibited signs of stabilization in the past two months.
Analysts said the strengthened performance was in part due to supportive measures, including tax reduction for small companies, more investment in railway and other infrastructure construction as well as less red tape for exporters.
Source - Shanghai Daily