After a black year (-9%), in 2024 the Chinese stock market started to run once more thanks to state purchases and foreign capital, 57 billion in equity ETFs for 57 billion, rising to +12, now the real economy has also recovered. Industrial production and retail sales in January-February 2024 recorded annual increases of 7% and 5.5% respectively, above expectations of +5% and +5.2%. Industrial production, following 6.8% in December 2023, reached its peak since February 2022. Comforting data, higher than expected.
The sales unknown
However, there is a point of uncertainty. Retail sales, following 7.4% in December, recorded the 13th positive month in a row but at the weakest pace since September 2023. Fixed investments, according to the National Statistics Office, rose (+4 .2% on estimates of +3.2%), while unemployment also went from 5.2% to 5.3%, the highest since July.
The Shanghai Composite index from the beginning of the year until just over a month ago was in the red by 9% due to lack of confidence in China’s recovery. After a 2023 to forget, however, the turning point came in early February and since then the Chinese stock market has recovered 12.3%.
It’s all the fault of capital flight which, according to the Institute of International Finance, has now reversed course for the first time in 6 months.
The tumbles
If a net 24.4 billion dollars escaped from the Chinese stock market from August to January, 9.6 billion returned in February. Of course, the liabilities are heavy. But the February-March rebound is not a blunder, if supported by these positive data.
#Chinese #economy #recovers #production #sales
2024-03-18 17:34:33
