China’s economy on track for strong performance in March: China Beige Book

BEIJING – China’s economy is ending the first quarter on a “strong” note, according to a business survey released by China Beige Book on Thursday.

“The economy clearly improved in March, driven by improved industrial activity and rising retail spending,” said Shehzad H. Kazi, chief operating officer of U.S. research firm China Beige Book.

China’s official data on retail sales, industrial production and fixed investment for January and February beat expectations across the board. Data for the first two months of the year is usually reported together to account for the week-long Lunar New Year holiday, which follows the agricultural calendar.

The China Beige Book said it surveyed 1,436 enterprises from March 1 to 23, roughly split between state-owned and non-state-owned firms.

“March China Beige Book data shows the economy is poised for a strong finish to the first quarter,” the report said. “Revenue growth accelerated last month, and rising prices boosted profits.”

The National Bureau of Statistics plans to publish data for the first quarter on April 16.

Earlier this month, China announced that the country is targeting economic growth of around 5% this year. Some analysts say this is an ambitious goal given the current level of stimulus announced by the government.

China’s Beige Book found that businesses had cut their borrowing due to higher interest rates, but also saw signs of a pause in lending.

“Market observers have largely missed the significant policy easing we saw last year, and some lenders may now be putting the brakes on,” the report said.

“Hiring recorded its longest period of improvement since late 2020,” the report said, noting that all sectors except services saw job growth.

The report said retail spending increased across all subsectors except luxury goods.

In real estate, the report said that while the residential sector still saw a decline in sales, commercial sales and construction improved significantly.

The manufacturing industry has seen output and domestic orders rise since February, but export orders have fallen, the report said.

Official data showed property investment fell 9% in the first two months of the year compared with last year. During this time, investment in infrastructure increased by 6.3%, and in manufacturing by 9.4%.