NDRC Official: China's Economy Has Yet to Bottom

Yang has been involved in the research and formulation of China’s mid- and long-term industrial plans and policies, and is a main composer of the country’s industrial policies. He didn’t add any explanation to his statement.

Although leading indicators for April already released don’t add up to any concrete answers, the market tends to believe that the macro economy has bottomed out and begun to rebound.  

PMI in April, calculated by the China Federation of Logistics & Purchasing, hit 53.5, the fifth straight rise in as many months. PMI calculated by CLSA, an independent brokerage and investment group, also exceeded 50. PMI higher than 50 generally indicates economic expansion.

However, the State Grid soon after declared that nationwide power generation in April had dropped 3.55% year on year, greater than the decline in March. Power generation is an important industrial indicator.   

Unlike the optimistic markets, many economists do not think the Chinese economy will rebound so soon.

Standard Chartered Chief China Economist Stephen Green insists on his 6.8% prediction for the economic growth in 2009. He thinks that while investment growth has again accelerated, private investment has seen no significant increase. Besides, residents�income growth is slowing down, and China is unlikely to see any export rebound in the second or third quarters.  

Jia Kang, a Ministry of Finance researcher, also thinks the economic downturn in the US will be a drag on China’s economy which may last for over three years.

The National Development and Reform Commission has launched stimulus plans for ten industries, but many believe this will only lead to new production surpluses. Yang Weimin says that while the stimulus increased demand among relevant industries, it was too early to judge whether it would increase final demand.