Mo Ji, chief economist for Asia ex-Japan at Amundi Asset Management who beat many to predict China’s growth picking back up in late 2015, says there are good reasons to be optimistic about China’s outlook.
In an interview with Bloomberg, Mo talks about why strong excavator sales she is seeing bode well for continued economic growth.
“Question: Why is capital expenditure so important in your outlook?
“Answer: When private capex expansion is widespread across the sectors, that means they can do business, make a profit, and have a pipeline of orders for the next two to three years. This gives me the biggest comfort and conviction that this stabilization will continue. Public capex expansion means infrastructure and construction. If they don’t have a pipeline order for the next two to three years, why do they want to buy machines?
“Question: Is that why you watch excavator imports?
“Answer: I focused on excavator sales to see how much further it can go for construction-related activities. Each month, it hasn’t stopped, ever since September 2016. Infrastructure and property are a very good proxy to see construction activity. Excavators are usually from Japan so for those people who don’t believe in Chinese data, this is real.”