Featured # Markets | 3 years ago

China’s Economy Showed Signals of Health in First Quarter

Economic indicators released from China displayed signals of health in the first quarter. However, due to a struggling global economy and unpredictable financial markets, the reported improvement to China’s economy was limited. China’s Premier Li Keqiang declared that the total economic scenario was better than how it was projected. Li added that he was optimistic the Chinese government will be able to sustain average to above average growth, even with the surrounding threats.

Li spoke recently at a gathering with the German foreign minister, Frank Walter Steinmeier, saying, “In the first quarter of this year, China’s economic indicators showed more improvement,” however he continued, “The basis of such improvement is not solid due to the impact of sluggish world economy and market volatility.”

Li’s remarks have come following main Chinese policymakers coming forward with statements. The government officials went on record saying that their nation’s economy has been showing indications of improvement, and that capital expenditures have been easing. Meanwhile, the Chinese government is scheduled to publish major data pertaining to the economy next week. For reference, economic growth in China declined to a rate of 6.8% in the fourth quarter of 2015, which was its lowest level since the financial crisis of 2007 and 2008.

The central bank released a paper on Friday pertaining to what they believe China should be doing with regards to their monetary policy. Researchers from the central bank stated that China should look to steadily change the reserve requirement ratio for banks, citing the balance of payments and economic changes within the nation. China’s central bank, The People’s Bank of China, has reduced the interest rate six times in less than two years. In addition it also cut the reserve requirement ratio multiple times, in an effort to prop up the country’s sluggish economy. Finally, public sentiment seems to reveal that China’s central bank is predicted to once again lower the reserve requirement ratio to further their mission of supporting economic growth.


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