While its tough to get any kind of accurate reading from a place like China, there are and have been a few signs, contrary to the overly optimistic views of the perma-bull crowd, that things aren’t picking up as quickly as expected, from Bloomberg:
World Bank Says China Recovery Hopes May Be Premature
Enthusiasm about an economic recovery in China may be “premature” as private investment lags behind government spending, the World Bank said.
“Until we see a recovery in private investment, it’s hard to get too excited about the future,” David Dollar, country director for China, said at a forum in Beijing today….
…. The world’s third-biggest economy is “struggling” and may fall short of the government’s target of an 8 percent expansion this year, Oppenheimer & Co. said this week.
Private investment, the main driver of growth, was “way down” in the first quarter, Dollar said, without citing a figure. Manufacturers have excess capacity and “a lot of the real-estate sector is over-built,” he said.
click on the link for the full story. Then there is this from Reuters;
China’s recovery may have lost steam: economists
China’s economic recovery may have slowed or even gone slightly into reverse over the past month, two international banks said in separate reports.
Credit Suisse economists said economic activity appeared to have softened in the second half of April and that the trend was more pronounced in May, with weakness in the materials sector and power consumption spreading to retail sales.
“We argue that the recovery in China is still ongoing, but that the pace may not be as strong as many have hoped recently,” Dong Tao, Asia economist at Credit Suisse, said in a report.
He forecast that the Purchasing Managers’ Index might slip below the watershed of 50 over the next few months, suggesting that the Chinese manufacturing sector was contracting.
Economists at Merrill Lynch said the PMI, which has been closely watched by the market as a leading economic indicator, would soften but remain above the 50-point mark, pointing to a milder expansion.
“Although manufacturing investment growth is not as strong as that of infrastructure, it has actually picked up so far this year, and we believe the momentum could be maintained for another several months,” Merrill Lynch economists Ting Lu and T.J. Bond said in a report.
“We need to factor in seasonality and focus on the big picture: the V-shape recovery of PMI,” they said, noting signs of more property transactions and faster investment growth.
They forecast that the PMI would drop to 50.2 in May, down from 53.5 in April but still well above a record low of 38.8 in November.
