Recovery Underway But Challenges Remain - Guan Tao

Economic data for January showed a “good start” as the continuous optimisation of epidemic prevention policies and real estate regulation took effect, but the economic recovery remains uneven, according to Guan Tao, a former official at the State Administration of Foreign Exchange. Writing for Yicai.com, Guan said the PMI index data from the government and Caixin showed good increases in demand, but that was mainly due to large enterprises, with SME data remaining stagnant. Data also showed recovery was strongest in the services industry, with manufacturing lagging behind. Data on household loans showed residents' willingness to increase leverage was insufficient, which shows there is still a long way to go to restore and expand consumer demand. The recent prepayment of housing loans issue shows it may take time for the real estate market to stabilise, he said.