CHINA TOPIX

11/21/2024 03:33:09 pm

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China's Economic Growth: Shows Sign Of Development, Although Not Getting High Spur

The latest data about China's economy showed some manifestations of progress even if there are several falls of stimulus in the previous months.

Wall Street Journal reported that fixed investment went up to 9.6 percent against 13.1 percent in March. Industrial production increased in April at 5.9 percent than 5.6 percent in March, although, it was at the slowest since 2008. On record, the slowest development is 12.4 percent.

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The Economist said, there were some parts of the economy that suffer from buoyancy, but possibly not sufficient to make Beijing more aggressive with stimulus. In April, property transactions rebounded, from the drop in the early part of this year. Another good news is property prices and asset prices are levelling up and are not cratering, which is said to be very important for the sake of the financial system.

On the other hand, housing begins a critical growth engine in the previous years as it dropped at 16 percent in 2014. Buyers are purchasing houses in the most vibrant cities of China and this urges the developers to begin new housing projects again. Empty houses are becoming to be a problem nationwide. As the numbers of unsold houses went up to 24 percent from 2014. Car sales are the main key driver of China's economy that stayed strong, went up to 3.7 percent in April, but this is the slowest in two years.

Beijing's action to the slow growth is in two forms: application of limited amounts of fiscal stimulus and reduction of borrowing costs to alleviate stress on the financial system. For example, investment should be up to 20 percent in the current year in order to make up for the real-estate investment decline. Although, more than six months ago, the stocks surge which gave the country growth outlook.

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