Independent surveys show that prices in China are recovering, providing ample evidence that the worst may be behind us for the Bamboo Curtain country.
According to data company World Economics, the company that first developed the global Purchasing Managers Index which is now owned by S&P Global, shows that the price index for all sectors is known to reach 50.9 in September 2023, recording the highest level in 14 months.
“This shows that concerns about price deflation in China leading to a period of very low or negative growth, as happened in Japan, have been exaggerated,” said the statement, quoted from Bloomberg .
The report goes on to say that signs of resumption of growth over the past few decades look slightly more positive.
China’s economic recovery has slowed since April 2023 as a trade slowdown and property crisis weighed on demand, construction activity and overall confidence.
This then sparked concerns that China was entering a “balance sheet recession” like what happened in Japan several decades ago.
In this situation, households and businesses start paying down their debts rather than investing or spending in the economy, leading to a prolonged period of deflation and sluggish economic growth.
The survey then added initial signs of improvement. Official data from the Chinese government also shows the economy improving in August 2023 thanks to a summer travel surge and a bigger stimulus push.
Then, China’s factory production and retail sales growth also exceeded expectations last month. Credit demand is also improving, but challenges also remain because the property sector continues to weaken.
Then, based on the World Economics Survey, it also shows that the service sector is driving recovery, with the price index rising to 53.2 in September 2023. The index for the manufacturing sector remains below the 50 level, indicating contraction. However, with a level of 49, the index was recorded at its highest level in eight months.
Then, according to the survey, the sales growth index for all sectors increased to 53.1, supported by expansion in the services sector, which was at its highest level in five months, even though the manufacturing industry was in the most ‘flat’ condition.
Source : Economy