- Chinese Manufacturing Sector Rebounds in March
Chinese data for the month of March validated the widely speculated stabilization in the world’s second-largest economy.
The manufacturing Purchasing Managers Index grew from 49.2 in February to 50.5 in March. The highest in almost 7 years.
“China’s economy has improved, supporting a stabilization in the global economy,” said Hua Changchun, global chief economist at Guotai Junan Securities Co. Chinese stabilization is expected to lift the European and U.S. economies, and also boost global prices if sustained.
While other economic reports are needed to validate improvement in Chinese economic outlook, the data showed new orders and exports rose to the highest levels in six months. Indicating growing demands and better than expected global growth.
“Once the rebound is confirmed, the government will not use up their fiscal firepower,” said Ding Shuang, chief China and North Asia economist at Standard Chartered Bank Ltd. in Hong Kong. According to Ding, the government is still concerned about local government debt risks, and if the trade talks reach a deal there will likely be a reduction in policy stimulus around mid-year.
Still, uncertainty surrounding the trade negotiation remains and could derail progress if the U.S. and China failed to reach an agreement as promised by both parties.