<TABLE cellSpacing=0 cellPadding=0 width=452 border=0><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published April 15, 2009
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Early signs of stimulus-led recovery seen in China
Economists expect a clearer picture when Q1 growth figures come in tomorrow
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(BEIJING) China's economy is showing signs of a nascent recovery, but even officials who want to boost public confidence warn a rebound faces risks from the global crisis and is not yet certain.
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</TD></TR><TR class=caption><TD>Not there yet: Economists caution China could face trouble if consumer spending, housing sales and other private sector areas fail to achieve a sustained rebound </TD></TR></TBODY></TABLE>Imports of oil, iron ore and other raw materials rose in March, reflecting the impact of Beijing's multibillion-dollar stimulus spending on industry. Home and auto sales are up, suggesting consumers might be more willing to spend.
A rebound for China, the world's third-largest economy, could help other countries by boosting demand for their exports, though analysts say China alone cannot propel the global economy out of its worst slump since the 1930s.
'I think they've turned the corner,' said economist David Cohen of Action Economics in Singapore. 'There is a sense that we are getting back on track with growth.'
But Mr Cohen and others caution it is still early and China could face trouble if trade weakens more than expected or consumer spending, housing sales and other private sector areas fail to achieve a sustained rebound.
'Things probably will get a little bit worse before they get better,' said economist James McCormack of Fitch Ratings.
Observers hope for a clearer picture when the government releases first-quarter economic growth figures tomorrow.
The economy showed 'better than expected positive changes in the first quarter' due to stimulus spending and some areas 'are in a process of gradual recovery', Premier Wen Jiabao said over the weekend. But he warned against complacency.
'As the (global) crisis has not touched its bottom, we can hardly say that the Chinese economy alone has got out of the crisis,' Mr Wen said, according to state media.
Forecasts of Chinese growth this year range from 8 per cent - the official target - to as low as 5 per cent. That would be a drop from 2007's stunning 13 per cent growth but still the fastest for any major country at a time when the US economy, the world's largest, is mired in recession.
The four trillion yuan (S$886 billion) stimulus aims to pump money into the economy mostly through higher spending on building highways and other public works. But its goal is to boost public confidence and encourage China's own thrifty consumers to spend more.
So far, the biggest impact has been to boost employment and revenues at state-owned construction companies and suppliers of cement and other building materials.
But some consumer areas are improving, possibly due to easier credit and other incentives. March auto sales rose to a monthly high of 1.1 million as buyers were lured by sales tax cuts and rebates.
Home sales rose 23.1 per cent in the first three months of the year from the same period of 2008, the government reported on Monday. Beijing wants such domestic consumption to reduce reliance on exports, which fell 17.1 per cent in March from a year earlier.
China is well-positioned to ride out the slump, economists say. Its state-owned banks avoided the turmoil that battered Western institutions. Government debt is low compared with other countries, giving Beijing room to borrow for its stimulus.
Eager to shore up public confidence and encourage consumers to spend, the government has been highlighting strong growth in bank lending as state companies borrow money for stimulus projects. Lending in March surged to a monthly high of 1.9 trillion yuan.
'We believe China's stimulus-led domestic recovery is well underway,' said UBS economist Tao Wang last week. Mr Wang said lending is growing so fast that Beijing's next move should be 'taming credit growth' to reduce the risk of wasteful investment and bad debt that might imperil banks. -- AP
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</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Early signs of stimulus-led recovery seen in China
Economists expect a clearer picture when Q1 growth figures come in tomorrow
<TABLE class=storyLinks cellSpacing=4 cellPadding=1 width=136 align=right border=0><TBODY><TR class=font10><TD align=right width=20>
</TD><TD>Email this article</TD></TR><TR class=font10><TD align=right width=20>
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</TD><TD>Feedback</TD></TR></TBODY></TABLE>(BEIJING) China's economy is showing signs of a nascent recovery, but even officials who want to boost public confidence warn a rebound faces risks from the global crisis and is not yet certain.
<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD>Not there yet: Economists caution China could face trouble if consumer spending, housing sales and other private sector areas fail to achieve a sustained rebound </TD></TR></TBODY></TABLE>Imports of oil, iron ore and other raw materials rose in March, reflecting the impact of Beijing's multibillion-dollar stimulus spending on industry. Home and auto sales are up, suggesting consumers might be more willing to spend.A rebound for China, the world's third-largest economy, could help other countries by boosting demand for their exports, though analysts say China alone cannot propel the global economy out of its worst slump since the 1930s.
'I think they've turned the corner,' said economist David Cohen of Action Economics in Singapore. 'There is a sense that we are getting back on track with growth.'
But Mr Cohen and others caution it is still early and China could face trouble if trade weakens more than expected or consumer spending, housing sales and other private sector areas fail to achieve a sustained rebound.
'Things probably will get a little bit worse before they get better,' said economist James McCormack of Fitch Ratings.
Observers hope for a clearer picture when the government releases first-quarter economic growth figures tomorrow.
The economy showed 'better than expected positive changes in the first quarter' due to stimulus spending and some areas 'are in a process of gradual recovery', Premier Wen Jiabao said over the weekend. But he warned against complacency.
'As the (global) crisis has not touched its bottom, we can hardly say that the Chinese economy alone has got out of the crisis,' Mr Wen said, according to state media.
Forecasts of Chinese growth this year range from 8 per cent - the official target - to as low as 5 per cent. That would be a drop from 2007's stunning 13 per cent growth but still the fastest for any major country at a time when the US economy, the world's largest, is mired in recession.
The four trillion yuan (S$886 billion) stimulus aims to pump money into the economy mostly through higher spending on building highways and other public works. But its goal is to boost public confidence and encourage China's own thrifty consumers to spend more.
So far, the biggest impact has been to boost employment and revenues at state-owned construction companies and suppliers of cement and other building materials.
But some consumer areas are improving, possibly due to easier credit and other incentives. March auto sales rose to a monthly high of 1.1 million as buyers were lured by sales tax cuts and rebates.
Home sales rose 23.1 per cent in the first three months of the year from the same period of 2008, the government reported on Monday. Beijing wants such domestic consumption to reduce reliance on exports, which fell 17.1 per cent in March from a year earlier.
China is well-positioned to ride out the slump, economists say. Its state-owned banks avoided the turmoil that battered Western institutions. Government debt is low compared with other countries, giving Beijing room to borrow for its stimulus.
Eager to shore up public confidence and encourage consumers to spend, the government has been highlighting strong growth in bank lending as state companies borrow money for stimulus projects. Lending in March surged to a monthly high of 1.9 trillion yuan.
'We believe China's stimulus-led domestic recovery is well underway,' said UBS economist Tao Wang last week. Mr Wang said lending is growing so fast that Beijing's next move should be 'taming credit growth' to reduce the risk of wasteful investment and bad debt that might imperil banks. -- AP
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</TD></TR><TR class=caption><TD>Diesel watch: China is the world's second-largest oil consumer after the US </TD></TR></TBODY></TABLE>Mr van der Veer declined to say which companies Shell is talking to, which field they might bid on or why it was considering Chinese partners. He said the bidding deadline is expected to be in late June or early July and partnership details would be announced then. 
