New home prices in China rose at the fastest pace in 21 months in March, in the latest sign of green shoots for the world’s second-largest economy as it recovers from three years of pandemic restrictions and Beijing eases a debt crackdown. Loaded real estate sector.
New home prices rose 0.5 percent from the previous month, according to official data, after a 0.3 percent increase in February.
The positive data indicated some relief for China’s ailing real estate sector, which has suffered from a liquidity crunch over the past two years. Better than expected export figures Released last week, China’s trade rebounded with shipments of electric vehicles and components as well as increased trade with Russia.
Encouraging data came ahead ChinaGDP figures for the first quarter of the year, due for release on Tuesday. Economists polled by Reuters expected growth of 4 percent for the first three months of the year as Beijing pursues its full-year target of 5 percent.
The People’s Bank of China on Monday kept its one-year medium-term lending rate — which sets the minimum benchmark interest rate for the country — at 2.75 percent. Analysts said the lack of easing from the central bank indicates that first quarter GDP data is expected to be on target.
China recorded only GDP growth 3 percent last yearbelow the 5.5 percent target that was already the lowest in decades and raises concerns about a structural slowdown in the economy’s expansion.
“If the GDP report [for the first quarter] “Coming close to market expectations, the speed of economic recovery is on track,” said Iris Pang, ING’s chief senior China economist. She added that as expected growth continues to pick up in the second quarter, “we expect the People’s Bank of China (PBoC) to keep interest rates unchanged.”
Nomura analysts noted Monday that electricity consumption growth rose “significantly” to 5.9 percent year-on-year in March, from 2.3 percent during the first two months of the year.
This was proof of that China’s economy They said Beijing had entered a “wonderful place” in the wake of Beijing abruptly dropping President Xi Jinping’s zero-Covid controls in late December and rolling back a tightening of the real estate sector.
Still, Beijing growth target for 2023 It is the lowest in decades, and economists have warned of an uneven recovery despite emerging signs of improvement in exports and the real estate sector.
One important area of concern about the pace of recovery is the strength of consumer services, which are an engine of economic growth and job growth in the country of 1.4 billion people.
China last week reported weaker-than-expected consumer price data, with an increase of 0.7 percent year-on-year for the month of March, beating expectations of 1 percent.
Citi said the weak inflation result indicated that “the recovery in consumption this year will be a recovery of half.”
“The recovery in services is flat, but not a supercharged one,” said U.S. bank analysts. “Meanwhile, commodity consumption may struggle to recover stimulus support, particularly for cars,” they added, noting that “it may also take some time for property stabilization to benefit from final consumption.”