Status: 03/01/2023 08:30 a.m
After the end of the strict corona restrictions in China, economic growth is picking up speed. The Asian stock exchanges have already benefited from the positive figures.
The Chinese economy is on the upswing after the end of the strict zero-Covid policy. The Manufacturing Purchasing Managers’ Index (PMI) rose to 52.6 from 50.1 in February, the National Bureau of Statistics in Beijing said. The PMI was well above the analysts’ forecast of 50.5. It rose to its highest level since April 2012.
A separate purchasing managers’ index published by the Chinese business magazine Caixin rose by a similar amount: it rose from 49.2 to 51.6 points in February. And the service sector even jumped to 56.3 points, compared to 54.4 points in December.
“Overall trend points to recovery”
“While these numbers should be taken with caution as there could be significant seasonal and event-related factors, the overall trend still points to a solid recovery in early 2023,” said Zhou Hao, economist at Guotai Junan International. If the values rise above 50 points, they signal an expansion in economic activity.
The data released today therefore suggest that the Chinese economy is recovering from the effects of the strict corona measures. “The good PMI readings give a positive note for the upcoming National People’s Congress. We expect the government will take more supportive measures to solidify the economic recovery,” Zhou Hao said.
Are energy prices rising again?
According to experts, a revival of the economy in China could result in the situation on the energy market becoming tense again. After oil and gas prices fell recently, rising demand from China could reverse this trend. The International Energy Agency IEA is anticipating increased demand from China for energy sources and is therefore also forecasting higher prices.
Asian stock markets up
At the start of the People’s Congress, the government in Beijing wants to announce its growth target for this year at the weekend. The International Monetary Fund (IMF) predicts China’s economic growth of 5.2 percent this year.
Asian bourses have already benefited from the positive data out of Beijing, with Asian stocks and the Australian dollar reversing earlier losses, the offshore yuan strengthening and oil prices rising as investors became more optimistic about China’s economic outlook.