China’s second-quarter rebound already losing steam, data show

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China : China’s nascent rebound from the historic contraction in the first quarter is already losing pace in April, amid signs of a global recession and still weak domestic demand. While March data showed a pickup from the slump in the first two months of the year, the earliest indicators for this month show domestic demand as still very weak and companies remaining cautious. The aggregate index combining eight indicators tracked by Bloomberg was therefore broadly unchanged this month. While the fact that it didn’t deteriorate signals a possible bottoming-out of the economy as the nation re-opens factories and encourages the public to return to shopping and dining out, the overall picture is still downbeat.

Small business confidence rose slightly after March’s strong rebound, but the pace of increase slowed, and a gauge of expectations dropped after gaining the previous month. “Despite an improvement in real activity, uncertainty about the recovery has increased on growing headwinds from a likely global recession” in the current quarter, according to a report from Standard Chartered economists Shen Lan and Ding Shuang, who survey smaller firms. “Sales remain sluggish, largely dragged down by a drop in export orders due to a rapid deterioration in external demand.” The indicator for new orders rose to 49.4, while that for new export orders began contracting again, dropping sharply to 41 from 50.8. A number under 50 indicates contraction. Data from Japan and South Korea indicates how weak that demand is. South Korean exports in the first 20 days of April plummeted the most since 2009, when the world was mired in the financial crisis. Its economy contracted in the first quarter and the outlook for global trade means that weakness may continue. (Source : Indian Express)

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