Approach to economists
Natics Asia Pacific Chief Economist Alicia Garcia Herero recently commented:
“China can reach its 2025 development target, but with even more stimulation and the second half will be difficult. All, while the Chinese economy is more likely to meet the government’s development target, there are significant uncertainty below the road. Despite moving from business friction and maintaining decomposition, there is more bullets for the government needed.”
Market Outlook: Trade Talks and Data Watch
While recent economic indicators have pointed to speed, trade development and loss of upcoming private sector PMI numbers on 31 May.
On Tuesday, August 26, China’s business -negotiator, Lee Chengang’s reports, were planning to visit Washington to resume the business talks. Progress to an American-China trade deal, reducing American tariffs on China, can promote external demand and reduce price pressure, potentially increase industrial gains.
The NBS manufacturing PMI number of August will indicate whether the manufacturing sector has been contract more rapidly. Economists hope that NBS manufacturing PMI will increase from 49.3 in July to 49.7 in August. The growth of neutral 50 levels may reduce concerns about China’s economic approach. On the other hand, a low reading can push Beijing into rolling meaningful measures to increase the economy.
Markets react to soft drops in industrial profits
The Hang Seng index reacted to the July data, climbing a high of 25,653 before falling at a low of 25,565. At the time of writing, the Hang Seng index ranged from 0.26% to 25,592. Meanwhile, the mainland was China’s CSI 300 and Shanghai Composite Index below 0.05% and 0.18% respectively.
Despite the soft decline in industrial profits, uncertainty remains on the stimulation measures of Beijing and the effectiveness of the upcoming trade talks.
