BEIJING — China’s economy is showing signs of a nascent recovery, but even officials who want to boost public confidence warn a rebound faces risks from the global recession and is not yet certain.
Imports of oil, iron ore and other raw materials rose in March, reflecting the impact of Beijing’s multibillion-dollar stimulus spending on industry. Home and auto sales are up, suggesting consumers might be more willing to spend.
A rebound for China, the world’s third-largest economy, could help other countries by boosting demand for their exports, though analysts say China alone cannot propel the global economy out of its worst slump since the 1930s.
“I think they’ve turned the corner,” said economist David Cohen of Action Economics in Singapore. “There is a sense that we are getting back on track with growth.”
But Cohen and others caution it is still early and China could face trouble if trade weakens more than expected or consumer spending, housing sales and other private-sector areas fail to achieve a sustained rebound.
“Things probably will get a little bit worse before they get better,” said economist James McCormack of Fitch Ratings.
Observers hope for a clearer picture when the government releases first-quarter economic growth figures Thursday.
The economy showed “better than expected positive changes in the first quarter” due to stimulus spending and some areas “are in a process of gradual recovery,” Premier Wen Jiabao said over the weekend. But he warned against complacency.
Forecasts of Chinese growth this year range from eight per cent — the official target — to as low as five per cent. That would be a drop from 2007’s stunning 13 per cent growth but still the fastest for any major country at a time when the U.S. economy, the world’s largest, is mired in recession.
The four trillion yuan (US$586 billion) stimulus aims to pump money into the economy mostly through higher spending on building highways and other public works. But its goal is to boost public confidence and encourage China’s own thrifty consumers to spend more.