According to HSBC experts, the Chinese economy has stabilized and is on its way to recovery. On top of that, the experts say that the recovery is accelerating and getting faster than expected. To be more specific, the latest economic figures coming from China shows that there is a considerable improvement going on in there.
According to the experts, the macroeconomic data coming from China since the beginning of the year have been testifying to that clearly. While the investments in construction keep on declining, infrastructural investments are growing. At the same time, Chinese invest more in new startups.
Still, these factors alone aren’t enough to curb the negative impact of deflation. This is happening since the level of retail sales has been unchanged. At the same time, the country’s export keeps on slowing down as China is getting its economy reoriented to domestic consumption and services. Basically, this is one of the reasons why China’s manufacturing production growth is slowing down as well. At last it is not as strong as expected.
With that being said, HSBC experts conclude that the Chinese government is not going to avoid monetary easing in the future. The People’s Bank of China is expected to continue the easy policy at least for the next couple of months.
