Findlay Nicolson comments as China reports better than expected manufacturing activity in March as government stimulus measures take hold.
There have been widespread fears of a greater economic downturn for the world’s second largest economy as the US and China battle to reach a workable solution that will see an end to the trade war which has already come at great expense to the global economy.
But a recent official government survey showed that manufacturing activity in China reached an eight month high last month and economists at Findlay Nicolson say this could suggest that government stimulus efforts may be starting to have a positive impact on the country’s stalling economy.
The official Purchasing Managers' Index (PMI) increased from a three year low of 49.2 in February to reach 50.5 in March. This was the first growth since November last year.
Although economists at Findlay Nicolson had predicted a slight increase, the manufacturing gauge rose by more than expected prompting a global stock rally as China’s economy showed signs of a potential recovery in the face of unresolved trade tensions.
But Findlay Nicolson economists have warned that it may be too soon to hope for a recovery for China’s economy which will depend largely on the conclusion of a trade agreement between the US and China that sees the reversal of trade tariffs imposed during the course of last year.