China’s GDP grew at its slowest pace in three years in the second quarter, but other less-cited indicators are already signaling that the world’s second-largest economy may be starting to turn around.
The economy grew 7.6 percent in the April-June quarter, slower than the 8.1 percent in the first quarter and 8.9 percent in the fourth quarter of last year.
The slowdown has raised concerns around the world that one of the largest drivers of global growth in recent year and the world’s largest consumer of commodities such as oil and copper may suffer a sharper downturn.
Yet indicators that are now being more closely tracked by economists and hedge funds for a reading on the economy such as loan growth, power output, new investment projects and oil demand, while mixed, are painting a picture of strength ahead for China, economists tell CNBC.
According to Nomura’s Chief China Economist Zhiwei Zhang, among the 32 indicators he tracks, nearly two-thirds showed faster growth in May than April.
“Having a mix of negative and some positive data are typical at turning points in the economy, and indeed our conviction remains strong that the second quarter is the bottom of the economic downswing,” Zhang said. “There are also signs that the policy easing has started to gain traction through the month of June.”Page 1 of 4 | Next Page