As swift and forceful actions have curbed outbreaks, China’s economic engine has begun to rumble again.
The latest commodity index revealed improvements in both factory output and market demand, indicating that with timely and targeted policy support, the country’s economic activities, gradually shaking the impacts of COVID-19 , are ready for a steady recovery.
China’s bulk commodity index, an indicator of the growth of the national bulk commodity market, gained 1.6 percentage points in May from the previous month to 101.3 percent, China said. China Federation of Logistics and Purchasing (CFLP).
Specifically, the supply and sell sub-indices bottomed and recorded encouraging rebounds, with the latter at a year-to-year high.
As the epidemic’s influence is easing markedly and pro-growth measures are in effect, market demand is picking up and business operations are showing positive signs, the CFLP said. Sales of all major commodities increased, including steel, coal, non-ferrous metals, chemicals and automobiles.
The commodity market expansion has added evidence of an economy emerging from the shadow of COVID-19, with factory operations disrupted and normal life back on track.
The logistics sector, one of the sectors hardest hit by the Omicron outbreak, saw a recovery last month as businesses were optimistic about the outlook. The manufacturing sector fared better in May, with its PMI reading at 49.6, down from 47.4 in April. In the ongoing online shopping bonanza in the country, which began on June 1 and will last for weeks, many retailers said their sales volume took off in the early hours.
The worst period of the recent epidemic outbreak may be over, said Robin Xing, chief China economist at Morgan Stanley, adding that the next recovery trajectory will more likely be U-shaped.
China unveiled a package of measures aimed at further stabilizing the economy and better coordinating epidemic control.
The policies, announced at a State Council executive meeting, include 33 detailed measures designed to strengthen fiscal and financial support, enhance investment and consumption, ensure food and energy security, smooth industrial chains and supply and ensure the livelihoods of the populations.
Premier Li Keqiang stressed the need to seriously implement these policies and called for swift actions from now to get the economy back on track.
Clear signals have been sent that the country has taken concrete steps to stabilize growth, especially at the primary levels, analysts said.
China International Capital Corporation, a joint venture investment bank, believes that some of these pro-growth policies are stronger than those of 2020 and, given the effective control of COVID-19, will help support the recovery in the second. semester.