China’s economic recovery showed signs of picking up in August, as policymakers’ actions to shore up investor confidence have helped drive up business activities.
The results were higher than the projected rise of 3.5 per cent by Wind, a leading provider of financial information services.
Industrial production climbed by 4.5 per cent in August, year on year, an acceleration from a rise of 3.7 per cent in July.
“Policy has turned visibly more supportive following the July Politburo meeting,” said Larry Hu, chief China economist at Macquarie Capital. “The incoming data over the past a few days have reinforced our view that these cycles (credit, inflation and earnings) are likely to improve in the coming months.”
China’s deflationary pressure eased a bit last month, as the consumer price index edged up from a fall of 0.3 per cent in July, and the fall of producer price index narrowed to 3 per cent from 4.4 per cent.
New bank loans also rebounded to 1.36 trillion yuan (US$187 billion) in August, compared with 345.9 billion yuan in July and 1.25 trillion yuan a year earlier.
However, fixed-asset investments rose 3.2 per cent in the January-August period, year on year, compared with a rise of 3.4 per cent in the first seven months.
Investment in the property sector, which has been plagued by debt stress and weak confidence among homebuyers, fell by 8.8 per cent in the first eight months of the year, expanding from a fall of 8.5 per cent in the first seven months.
Chinese authorities have introduced a slew of housing policies, including lowering payment ratios and mortgage rates, while lifting purchasing restrictions in some cities.
More to follow…