Chinese Data Shows Signs Of Revival:

China’s growth has been improving and the economy is turning around in these parts of the globe. At one point of time, it seemed like the Chinese economy is going in to recession and there is nothing which is able to help it. But, the Chinese economy came back strong and is showing signs of revival in the past few months. The services sector data, which has come out yesterday showed that China is growing at a faster pace than expected. This is the 4th straight month in which China has reported continuous and strong growth.

According to the National Bureau of Statistics (NBS), in the non-manufacturing sector, China\’s official purchasing managers\’ index (PMI) grew by 50 basis points and currently stands at 56.1 for the December month. This PMI number was 55.6 in November.

The growth in the manufacturing sector, too, has shown signs of improvement and that is adding fuel to the rally in the Chinese stock exchange. Few days back, the Congress in the United States has approved a deal which said that tax limits should be raised on wealthy Americans. This approval led to a spark in the global indices and the Chinese stock exchange has out performed most of the other stock indices.

This deal will help the United States economy to grow at a faster pace than it is growing at the present. Pat Toomey, Republican Senator of Pennsylvania, said, “Our opportunity here is on the debt ceiling. We Republicans need to be willing to tolerate a temporary, partial government shutdown, which is what that could mean.”

Kowalczyk, Credit Agricole\’s senior economist for Asia, said, “Absolute levels of both December manufacturing and non-manufacturing PMIs remain relatively low by historical standards and consistent with only modest rebound in economic activity.”

Most of the analysts feel that the next fiscal year could see lots of improvement in the Chinese economy and the Chinese stock exchange may out perform its peers in the first half of this financial year. He also added, “Economic growth picked up in the fourth quarter of 2012 after sliding for seven straight quarters, but in sharp contrast to China\’s previous, more pronounced bull runs, it could fade after the first quarter of 2013.”

Construction services jumped and have outperformed other services and were up from 61.3 in November to 61.9 in the past month. Other services like transport and industries fell and showed a negative growth in the services data. Transport sector has been slowing down sue to weak demand for Chinese exports and some escalating tensions at the Chinese border.

Xia Nong, deputy director-general of the Department of Industry under the National Development and Reform Commission, said, “Expanding domestic demand will be a major stimulus for China\’s economic growth, and the greatest potential will come from the service sector.” Most of the analysts feel that if this type of growth continues in China, then we may see a good 20 to 25 percent jump in the Chinese markets in this year.

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Category: Finances
Keywords: Chinese Data, Fiscal Deal, Barack Obama, Manufacturing Data, Revival, Chinese economy, Sectors