Chinese’s Economy May be Stabilizing

A Chinese manufacturing gauge for April suggested that growth may be starting to stabilize in the nation's economy after the government spurred infrastructure investment and eased monetary policy.

The official manufacturing Purchasing Managers’ Index was at 50.1 in April, according to the statistics bureau and the China Federation of Logistics and Purchasing in Beijing. That compared with a 50.0 median estimate of economists surveyed by Bloomberg News. Numbers above 50 signal expansion.

Policy makers cut interest rates and reduced banks’ reserve requirement ratios twice in the past six months to prevent a deeper slowdown. China’s Communist Party leaders vowed in a meeting Thursday to step up targeted controls to counter downward pressure on the economy.

Besides its interest rate and RRR cuts, the People’s Bank of China has also considered using a toolkit that includes unconventional policies such as a Pledged Supplementary Lending program that channels money to favored areas of the economy.

“The next monetary policy move in the near future is more likely an interest-rate cut rather than another RRR cut,” Zhu Qibing, an economist at China Minzu Securities Co. in Beijing said. “Targeted measures like PSL are even more likely than an interest rate cut.”

Cina Coren
Cina Coren is a former Wall Street broker and financial advisor. She holds a Master's degree in Communications and spent many years writing for international news outlets and journalistic publications. Today, Cina spends most of her time writing internet articles and blogs, and reading various newspapers to stay on top of the news.