An aerial drone photo taken on Jan. 8, 2024 shows robotic arms processing components for new energy vehicles at a private company in Changxing Economic and Technology Development Zone of Huzhou city, east China's Zhejiang province. (Photo by Tan Yunfeng/Xinhua)
China is recovering from the impact of the COVID-19 crisis as its economy continues to gain momentum and consumer confidence improves over time, a veteran US investment strategist said.
The economic recovery will continue to gain momentum, especially after the annual “two meetings” where there was much talk of further policy support and likely further interest rate cuts, he said.
by Xinhua writer Liu Yanan
NEW YORK, April 4 (Xinhua) — China's economy is experiencing spring as green shoots emerge and economic recovery gains momentum, a veteran U.S. investment strategist said.
China's official manufacturing purchasing managers' index (PMI) far exceeded expectations in March and “it shows that after the Chinese New Year, we're seeing this acceleration in the Chinese economy,” said Brendan Ahern, chief investment officer at the U.S.-based based asset management firm Krane Funds Advisors LLC, a specialized investment management firm focused on China, climate and other uncorrelated assets.
This is a very strong sign that the Chinese government's policy to stimulate the economy is also taking effect in the real economy, and a good sign for both the Chinese and global economies, Ahern told Xinhua on Monday.
China's strong automobile sales figures in March, particularly electric vehicles, show “that the consumer in China is coming back and also the positive impact of policy support,” Ahern said.
Ahern pointed out that China's manufacturing PMI beat all forecasts from 21 economists who provided estimates to Bloomberg, saying: “Sometimes there can be overdue pessimism. And I think nothing changes perception than data. The data doesn't lie. And here is the data. This is a very strong signal for us.”
The improvement shows China has overcome the impact of COVID as its economy continues to gain momentum and consumer confidence improves over time, the strategist said.
The economic recovery will continue to gain momentum, especially after the annual “two meetings” where there was much talk of further policy support and likely further interest rate cuts, he said.
Ahern pointed out that the Chinese government had learned wisely from Western governments that had spent heavily to stimulate the economy, leading to higher inflation and worsening debt problems for some, and instead adopted a cautious and patient approach have chosen.
Chinese companies' corporate profits bottomed out last year and the underlying economy began to accelerate somewhat, with more consumers dining out and traveling more both domestically and internationally, Ahern said.
“So we're seeing green shoots, so to speak… It's starting to become spring, and you're seeing this spring in terms of China's economy,” Ahern told Xinhua.
“The grass will only continue to grow after this long winter and we are actually seeing a thaw in terms of improving the Chinese economy,” he added.
As consumers in China return, consumption will expand beyond early movers such as restaurants and travel to more traditional retail sales such as home appliances, Ahern said, adding that automotive sales were quite strong.
In addition, the continued expansion of Chinese manufacturing and increasing self-sufficiency in many technologies are another tailwind for the Chinese economy, said the investment advisor.
“China's economy, in my opinion, is moving up and forward and will only continue to improve,” he said.
Ahern also urged investors to look beyond China's economic growth rate and observe the value of China's economic growth, which has never been higher.■
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