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Leading index shows China slowdown stabilizing
By Wang Yanlin |
September 25, 2012, Tuesday
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Online Edition
Online Edition
CHINA'S economic slowdown may be stabilizing as a leading index for China's economy rose at a faster pace in August.
The Conference Board Leading Economic Index for China, which combines credit growth, supply of raw materials, manufacturing activities, consumer confidence, export orders and employment trends, rose 1.7 percent in August to 240.4 (2004=100), following a 0.6-percent increase in July and a 0.1-percent lift in June.
Conference Board, a New York-based research group, said August's rise was the biggest in seven months.
"The improvement in the index raises expectations for a moderate rebound in China's growth, even as current economic conditions remain subdued," said Andrew Polk, an economist at the Conference Board.
Polk said better performance in real estate, credit growth and improved consumer expectations contributed to the higher index.
China's gross domestic product expanded 7.6 percent from a year earlier in the second quarter, the smallest gain in three years and the sixth quarterly deceleration.
The longer-than-expected downturn has caused some economists to lower their projections for China's economic growth this year.
Morgan Stanley announced last week that it had trimmed its forecast for China's economic growth this year to 7.5 percent from 8 percent previously, while Barclays has also cut its projection to 7.5 percent from a former 7.9 percent.
However, there were signs of a recovering economy.
The HSBC Flash Purchasing Managers' Index, the earliest indicator of China's industrial activities, rose to 47.8 in September from August's final reading of 47.6, a two-month high that indicated stabilization in the economy.
The Conference Board Leading Economic Index for China, which combines credit growth, supply of raw materials, manufacturing activities, consumer confidence, export orders and employment trends, rose 1.7 percent in August to 240.4 (2004=100), following a 0.6-percent increase in July and a 0.1-percent lift in June.
Conference Board, a New York-based research group, said August's rise was the biggest in seven months.
"The improvement in the index raises expectations for a moderate rebound in China's growth, even as current economic conditions remain subdued," said Andrew Polk, an economist at the Conference Board.
Polk said better performance in real estate, credit growth and improved consumer expectations contributed to the higher index.
China's gross domestic product expanded 7.6 percent from a year earlier in the second quarter, the smallest gain in three years and the sixth quarterly deceleration.
The longer-than-expected downturn has caused some economists to lower their projections for China's economic growth this year.
Morgan Stanley announced last week that it had trimmed its forecast for China's economic growth this year to 7.5 percent from 8 percent previously, while Barclays has also cut its projection to 7.5 percent from a former 7.9 percent.
However, there were signs of a recovering economy.
The HSBC Flash Purchasing Managers' Index, the earliest indicator of China's industrial activities, rose to 47.8 in September from August's final reading of 47.6, a two-month high that indicated stabilization in the economy.
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