China’s government indicated a slowdown in the world’s second-largest economy is bottoming out, underscoring forecasts for policy makers to avoid cutting interest rates this year.
President Xi Jinping said expansion is on a “more stable footing,” the Xinhua News Agency reported May 31. An official manufacturing index released the next day showed a pick-up in growth, rising to 50.8 in May from 50.6 in April, while a separate gauge today signaled a contraction.
Stabilization in Chinese industry adds to signs of strengthening in Asia after Japan last week reported an advance in factory output and South Korean industrial production and exports unexpectedly increased. A Bloomberg News survey of economists showed the People’s Bank of China is more likely to raise interest rates than cut them in the coming year.