China View: Data show early signs of improving consumer and business sentiment (Aug 2020 Data) | The Conference Board
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China View: Data show early signs of improving consumer and business sentiment (Aug 2020 Data)

Recent data suggest that domestic demand is starting to catch up with China’s primarily supply-side driven recovery to date. Of note, consumer demand for small services appears to be on the rise, as evidenced by both price and employment increases in the small services segment. Corporate financing demand also appears to be increasing. These two factors suggest marginally improving consumer confidence and business sentiment in China. 


  • Impact of COVID-19 Crisis on the Chinese Economy – China’s continued success at preventing a second-wave COVID-19 outbreak sees Chinese consumers becoming gradually more confident. Spending on consumer services is beginning to pick up. Retail growth in August turned positive for the first time this year. On the supply side of the economy, Industrial Production growth has returned to pre-COVID levels.  


  • Investment Trends – Manufacturing investment is rising on the back of improving factory-gate pricing and corporate profitability. Credit data suggest growing demand for corporate financing. Intensifying real estate restrictions should see housing development investment slow. State-led infrastructure investment will continue to be used as a countercyclical policy tool for the foreseeable future.


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Yuan Gao

Senior Economist, China Center for Economics and Business
The Conference Board



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