Money Matters - Simplified

China's Back: China's Economy Blossoms after Great US Demand

It seems that the China's economy is all set to follow the ride where fresh dew drops of resilience for the country is being witnessed by the analysts. The same was visible in the data released by the General Administration of Customs on Sunday.

The data was brought after the overseas sales and factory output in July exhibited some improvement. There has been a great difference between exports and imports touching $28.5 billion; which is quite high from $17.8 billion in July.

The trade data has pinpointed the surging global demand for the goods from China. The details from the experts unveil that the exports have jumped and grabbed the high peaks by scaling the turf of growth. There has been an increase of 7.2% in August in comparison to last month.

The data has shown that the exports have increased by 5.1% in July and a squeezed export of 3.1% in June. In case of imports, they have also witnessed an increase of seven percent. This is a good picture of imports as earlier in July the imports were fixed at 10.9%. This is surely a mark of healthy and growing economy.

So, the statistics reveal that the Chinese economy has been flourishing with the strengthened demand from the US, and also from the exports. According to Stephen Green of Standard Chartered Bank, "It won't be a strong recovery but it's increasingly clear we've bottomed."

Monday's details have highlighted that the inflation was low in August for China. It was witnessed that the consumer-price index decreased from 2.7% in July to 2.6% in this month. This also provides a good picture of the country's economy.

The picture of China's economy still carries some grey shades as there are queries regarding the increased salaries and strong currency affecting the health of China's exports. Some analysts speculate that after good amount of credit-fueled economic increase, there can be reduced investment and imports.

The nation has to still endeavor to have a gross domestic product growth of 7.5%. Now, the analysts have also poured their opinions regarding the groth witnessed in this month. According to J.P. Morgan JPM, third quarter may see a growth of +0.86% and further an increase of 7.6% year-to-year growth. If this happens, this would be really good in comparison to the second quarter growth of 7.5%.

According to Ma Xiaoping, an economist who covers China at HSBC HSBA, "External demand is better than expected." So, the picture would be only be clear after the third quarter data. Till then, we're left to speculate!!