Abstract : China is expected to witness broader recovery in growth this year, providing room for counter-cyclical tightening and refocusing on a sustainable growth path, according to a research report by Morgan Stanley.
Photo taken on Nov. 4, 2020 shows a light show at the Lujiazui area in Shanghai, east China. (Xinhua/Zhang Haofu)
May 18 (Xinhua) — China is expected to witness broader recovery in
growth this year, providing room for counter-cyclical tightening and
refocusing on a sustainable growth path, according to a research report
by Morgan Stanley.
investment bank forecast a more balanced growth mix for the country in
2021, with continued improvements in private consumption and
manufacturing capital expenditure (capex).
expect a strong cyclical recovery in manufacturing capex to above the
pre-COVID trend on the back of robust external demand,” said Robin Xing,
chief China economist of the bank, in the co-authored report.
echoed a steady expansion of industrial production last month, with
China’s value-added industrial output rising 9.8 percent year on year in
April, official data showed Monday.
investment in the manufacturing sector continued to increase in the
January-April period, up 23.8 percent from a year ago. The figure was
3.9 percentage points higher than the overall investment growth.
consumption is also returning to the pre-COVID level, Xing said,
attributing the rebound to favorable conditions such as continued labor
market recovery, the release of precautionary savings, and a stable
domestic epidemic situation.
to official data, China’s job market sustained the momentum of recovery
in April, as surveyed urban unemployment rate stood at 5.1 percent last
month, 0.2 percentage points lower than the level in March.
continuing growth momentum has provided room for gradual policy
normalization to stabilize the macro leverage ratio, Xing said, adding
that he expects broad credit growth to soften to 11 percent year on year
by the end of 2021.
forward, the country is likely to focus more on long-term
sustainability, with more efforts on facilitating urbanization,
upgrading the manufacturing sector, renminbi internationalization and
green growth, Xing added.
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Source: Morgan Stanley forecasts broader growth recovery in China