Actions from Peoples bank of China (PBOC) and rising stock market has helped Chinese consumers to regain some of their confidence, however recovery remains far off if pre-crisis (2008/09) or peak (2013) is considered.
- This week HSBC flash manufacturing PMI pointed at recovery but overall growth remain in contractionary zone. HSBC flash manufacturing PMI for June came at 49.6, better than prior 49.2, however still below 50 mark, above which expansion is called.
- Similarly, in housing sector, prices are going up rapidly, in tier 1 cities price growth surpassed previous peak, however this rapid growth is not coming in line with price growth inlands, which suggests current bounce back may not the recovery China is in search for.
Westpac MNI China consumer sentiment data was released today.
- China consumer sentiment rose by 1.1% to 112.3, after holding steady for two months. However the sentiment remains far from its pre-crisis high around 130. As of now it remains subdued with 1 year average at 112.4.
- According to MNI, today’s sentiment was majorly improved by better outlook from aged people.
Further evidences are required before a recovery can be called over Chinese economy.
Chinese benchmark stock index is currently trading at 4634, up 1.8% for today.
The material has been provided by InstaForex Company – www.instaforex.com