NEW YORK, July 22 (Xinhua) -- China is experiencing broad-based economic recovery without unduly distortions from heavy infrastructure or fixed asset investment, an expert on market said Wednesday.
China's economy is growing at a trend rate of 5.5 percent, primarily due to the post-pandemic reopening rather than fiscal thrust or accelerated credit creation, Mehran Nakhjavani, emerging markets strategist and partner at research firm MRB Partners, said in a report.
Data in June "confirms that Chinese economic activity has recovered from its early-year swoon and is growing at, or slightly above, its trend growth rate," said Nakhjavani, adding that pockets of weakness linger in exports and some elements of consumer spending.
MRB's economic activity indicator on China moved into an above-trend reading in June after showing trend growth for April and May, and the spike in June resulted from a sharp pickup in exports to South Korea.
Nakhjavani stressed that no explosion in Chinese fixed asset and infrastructure investment, or credit aggregate has occured.
Chinese spending this year has been directed at filling the hole in domestic demand related to the COVID-19 pandemic lockdown, but the scale of this thrust, at 3 percent of gross domestic product, is very modest compared with what took place in 2008, as well as what is currently occurring in all other major economies, according to the report.
Chinese financial assets, especially currency and government bond markets, emerged from the pandemic with "characteristics of a safe haven," said Nakhjavani, noting the relative stability of yuan, continuous rise of foreign demand for government bonds and more capital inflows into Chinese stock markets. Enditem