Aggressive Measures Starting To Show Results
The Times UK has an interesting article about the Chinese economy starting to show signs that the government’s recent stimulus measures are taking hold. While the economy still isn’t out of the woods just yet, recently it appears that it may have bottomed out early in the first quarter of this year.
Stephen Green of Standard Chartered in Shanghai wrote in a report: “The past weeks in China have seen more signs of stabilisation after the horror that was Q4 … As a result of the quick and massive policy response in 2008, real stimulus is now beginning to hit some parts of the real economy, and consumer confidence seems to have recovered a bit too.” But he added: “This year will be rocky, though, with private-sector contraction, static wage growth, and rising unemployment likely.”
Highlighting the importance of Beijing’s policies to foster growth, China’s four big listed banks extended nearly 800 billion yuan (£79 billion) in new loans in March, pointing to overall new loans of about 1.6 trillion yuan for the month. The new lending figure marks the third month in a row that new credit has exceeded 1.0 trillion yuan.
Sherman Chan, an economist for Moody’s economy.com said: “The Chinese economy may have already hit its rock bottom in the March quarter.”
This follows other recent articles, like the Wall Street Journal’s story today about indicators that demand for PCs in the country is beginning to firm up and the Chinese online gaming company Changyou made for a rare IPO amid the gloomy economic climate today in New York.
All in all, decent economic news — a rare bright spot lately.