China Beige Book Says Retail and Property Fueling China Recovery

China’s economy saw a broad-based recovery this quarter on a resurgence in retail and a rebound in property, a private survey found.

Companies are doing better than the official data shows, and deflation risks may have peaked, according to the China Beige Book survey, published by New York-based CBB International. The economy is rebalancing as central and southwest regions outperform, the report said.

The findings follow official data for May from industrial output to credit growth that suggested a slowdown is stabilizing after monetary easing and government efforts to bolster provincial finances. Still, growth has been undershooting Premier Li Keqiang’s 7 percent full-year expansion goal, with Bloomberg’s monthly gross domestic product tracker at 6.55 percent in May.

“The economy saw a broad-based recovery,” Leland Miller, president of the survey publisher, said in a statement with Craig Charney, director of research and polling. “Cash flow remains stable, volumes are increasing, and margins saw a minor uptick. Capex and borrowing both stabilized this quarter, while the jobs market continues to show resiliency.”

Miller and Charney said that expanding sales volumes, rather than a stock rally, fueled the recovery.

— With assistance by Xiaoqing Pi

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