The survey suggests China’s measures to reverse the deepest slowdown since 2008 may be boosting growth even as Europe’s sovereign debt crisis crimps exports.
The China Beige Book’s second quarterly survey showed property agents reporting higher second-quarter revenue doubled to almost 60 percent, manufacturers recording rising sales increased 3 percentage points to 63 percent and retailers with increased sales climbed 5 percentage points to 68 percent.
The key drivers of an “upswing” in the real estate market were increasing sales volumes that were reported by 54 percent of residential property agents and 57 percent of commercial property agents, the China Beige Book said.
Not all the data in the China Beige Book showed a pickup. Manufacturers that principally export are “hurting,” with 28 percent reporting sales declines, double that for firms that also rely on domestic markets, the report said. More than a fifth of residential property developers and 18 percent of commercial developers had declining revenue in the quarter.
After thirty years, China is nearing the end of its super-high-growth phase, but that shouldn’t be a shock. It’s much like the twenty-five-year growth spurts by earlier East Asian economies such as South Korea, and it was always bound to slow. But it is resilient. For all the gloom these days, I end up around where The Economist did in April, when it concluded that China’s “quirks and unfairnesses”—financial repression, sops to the state-owned enterprises—will help it withstand a shock.
China is still on pace to overtake the United States as the world’s largest economy by 2020. If you want to know if it’s a better investment than other places, consider that U.S. fund managers continue to move in. (They put $2.5 billion into Chinese stocks this year, after pulling out $2.6 billion last year, according to the research firm EPFR Global.) If China was a stock, it would be down now, but, viewed from another angle, that means it is cheap.