China’s industrial sector saw a remarkable upturn at the start of the year, marking a positive development amidst ongoing challenges in the property market. According to recent data from the National Bureau of Statistics, industrial production surged by 7% year-on-year in January and February, surpassing economist expectations. This robust growth, the fastest in nearly two years, is a promising sign for policymakers seeking to bolster economic momentum.
While industrial output flourished, the real estate sector continued to face difficulties. Property investment declined by 9% year-on-year during the same period, albeit at a slower pace compared to the previous month. New construction starts also plummeted by 30%, indicating significant challenges in the property market.
Despite these concerns, economists remain cautiously optimistic about China’s economic outlook. Zichun Huang, China economist at Capital Economics, noted the positive momentum in industrial production and suggested that the economy may continue to improve in the near term. However, Huang highlighted the structural challenges underlying the economy, particularly its heavy reliance on the property sector.
The latest data underscores the need for balanced policy measures to address the ongoing challenges in the property market while capitalizing on the momentum in industrial production. As China navigates through these complexities, global investors and analysts will closely monitor the country’s economic performance for further insights into its trajectory.
photo source: Google
By: Montel Kamau
Serrari Financial Analyst
20th March, 2024
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