BEIJING • China’s economy is showing further signs of recovery after months of slowdown, though downward pressures still persist.
That’s according to a Bloomberg Economics gauge aggregating the earliest available indicators on market sentiment and business conditions. Stocks and smaller business sentiment led the gains, while a trade gauge and a sales manager survey signalled a broader pickup. At the same time, copper prices and factory inflation pointed to weakness.
To cushion the economic slowdown, the government has been directing credit toward smaller businesses and this month announced the biggest tax reduction on record. News that China and the US are closing in on a trade deal also offers reasons for optimism, though a grim outlook for global commerce is a lingering basis for caution.
The economy is still some “distance from a self-sustaining recovery where policy-induced stabilisation takes hold,” said Bloomberg China economist David Qu. “Government-led investments will play a more important role in stabilising the economy.”
The effect of policy measures is evident in Standard Chartered plc’s survey of more than 500 small and medium-sized businesses, as the gauge jumped to the highest level in 10 months. Both domestic and external demand recovered, boosting sales and production, according to the sub-indexes of the gauge. An indicator of credit conditions jumped to the highest level since 2017. — Bloomberg