Observing the vibrant pulse of China’s economy, Yicai’s sentiment gauge stayed cheerfully above the boom-bust line for the eighth consecutive month in March. It appears that the annual prime policy meetings, known as the Two Sessions, have indeed sent a robust assurance. Macroeconomic policies are set to become decidedly more proactive.
Now, regarding the Yicai Chief Economists Confidence Index, it reached a buoyant 50.5 this month. That’s a whisker over February’s 50.2 and January’s 50.3, based on a survey of 13 prominent chief economists based in China. Any reading above 50 simply brim with optimism.
One ought to mention the economic growth target for this year, pegged at a sensible 4.5 percent to 5 percent. This not only displays prudence amidst a complex global landscape, but it also reserves ample room for tweaking the structure and minimising risks, according to Cheng Shi from the Industrial and Commercial Bank of China International.
In the short run, noteworthy announcements from the Two Sessions are poised to spark domestic investment and consumption. Thanks to the CNY1.3 trillion ultra-long-term special treasury bonds and other financial instruments, as Chief Economist Cai Wei from Klynveld Peat Marwick Goerdeler China Advisory observed.
Longer-term, initiatives like the Artificial Intelligence Plus programme and new industrialisation are primed to transform the economic framework, adding value and efficiency, as Cai further articulated.
On the international stage, the global economy is expected to hobble along at a modest rate this year. Alas, trade protectionism and geopolitical angst persist as nagging uncertainties, opined Wang Han of Industrial Securities.
Amidst such challenges, China’s economic focus remains on domestic demand recovery and structural optimisation. With GDP growth predicted around 5 percent, emphasis is on consumption enhancement and investment stability.
For an amusing bit of trivia, the consumer price index rose a neat 1.3 percent in February, a touch faster than the economists’ average expectations, no doubt spurred by the Chinese New Year merriments. Conversely, the producer price index took a dip of 0.9 percent.
Retail sales of consumer goods likely saw a sprightly rise of 2.4 percent in January and February, according to our economists. This marks a pleasant leap from December’s 0.9 percent increase, buoyed by promotion activities, as noted by Wen Bin, chief economist at China Minsheng Bank.
In terms of industrial prowess, the average forecast for industrial value-added growth for early this year stood at 5.3 percent. Quite respectable, considering December’s 5.2 percent growth. Meanwhile, fixed asset investments may have tumbled 3.2 percent compared to a slightly steeper drop anticipated in 2025.
Traditionally, fixed asset investment shows robust growth early in the year. A trend expected to continue, remarked Lu Zhengwei, chief economist at Industrial Bank.
China’s trade surplus was projected at a solid USD157.7 billion for the first couple of months. Predictions for import and export growth sit comfortably at 5.1 percent and 5.4 percent, respectively, compared to December’s figures.
Worthy of note, high-frequency data from ports highlight a promising rise in exports. Cargo and container throughput at Chinese ports reportedly grew a healthy 9.3 percent and 13 percent, respectively, by February 22. Lu couldn’t be prouder.
As for the yuan’s exchange rate against the US dollar, it should hover around 6.9 by month’s end, quite possibly reaching 6.8 by year’s end. The yuan’s steady appreciation creates favourable conditions for future moderation, remarked Lian Ping of the Guangkai Chief Industry Research Institute.
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