China’s economy shows positive signs of recovery

China‘s economic recovery is gaining momentum, driven by a combination of factors, Taimur Baig, Chief Economist and Managing Director of DBS Group Research, said in a recent interview with Xinhua.

DBS, a major Singaporean banking group, views the recent Chinese government measures aimed at bolstering the property market as substantial.

While sorting out China’s property issues will take time, Baig noted, “we’re encouraged by the totality of the measures that have been taken in recent months.”

China’s strong trade performance is a key driver of its economy, in addition to the property sector. Baig noted that Chinese exporters have been consistently performing well, with exports surpassing expectations in the first four months of 2024.

Official data from the General Administration of Customs support this positive trend. China’s exports grew by 4.9 per cent year-on-year to 7.81 trillion yuan ($1.1 trillion) in the first four months of 2024.

Baig also pointed to a significant recovery in domestic consumption, citing data on travel and spending during major holidays.

The number of travellers and total consumption during Spring Festival, Qingming Festival, and May Day holiday this year all showed significant improvement compared to 2019, he said.

Looking ahead, Baig anticipates that government’s support measures like consumer goods trade-in subsidies will further boost retail sales growth.

China’s first-quarter GDP growth of 5.3 per cent year-on-year surpassed expectations, according to the National Bureau of Statistics. This positive data prompted DBS to raise its 2024 GDP growth forecast for China from 4.5 per cent to five per cent.

A DBS Group Research report from April highlighted that China’s fixed asset investment is picking up, with government initiatives focused on equipment upgrades in strategic sectors taking effect.