China’s back, baby.
Chinese officials have been saying the economy is turning around. It’s all a matter of knowing where to look.
Well, the China Beige Book, a private survey of many sectors and regions, reports that the world’s second-largest economy rebounded across the board in the second quarter.
“Among major sectors, two developments stand out: a welcome resurgence in retail — which saw rising revenue growth despite a slip in prices — and a broad-based rebound in property,” wrote Leland Miller and Craig Charney, the report’s authors. In addition, manufacturing, services, real estate, agriculture and mining all saw quarterly and annual gains. Shipping and travel were the only sectors to decelerate.
Remember profit margins? After months of price deflation, 37% of the more than 2,000 Chinese firms that responded to the survey managed to raise prices on products or services, and 45% said profit margins jumped year over year.
In another case of lazy reporting, the report took the media to task for only focusing on the coastal business centers of Beijing, Shanghai and Guangdong. It’s true there was little to any improvement there. But in China’s central and southwestern regions saw improvement in the labor market.
And in a sign the real estate market is near a bottom, home prices rose in May for the first time in 13 months.
However, the report pointed out that the weak recovery in capital expenditures remained a concern to economists.
“This is not ‘China is bouncing back and its problem is ended’,” said Miller, the China Beige Book’s president, reported Reuters. “On the other hand what you are seeing in this data is exactly what you want to see in terms of signs of recovery.”