The USD/CNH pair remains above 7.3000 as Chinese stocks trade defensively ahead of the implementation of new U.S. tariffs. Analysts at BBH FX note that while China's economic activity showed slight improvement in February, growth concerns persist.
Modest Economic Improvement in February
China’s composite PMI climbed to a two-month high of 51.1 in February, up from 50.1 in January. This was driven by a surprise return to growth in the manufacturing sector and a slight increase in services activity. The manufacturing PMI edged up to 50.2 (above expectations of 49.9), while the non-manufacturing PMI aligned with forecasts at 50.4, up from 50.2 the previous month. Additionally, the Caixin manufacturing PMI outperformed projections, reaching a three-month high of 50.8 versus the expected 50.4.
Growth Outlook Remains Weak
Despite these gains, China’s broader economic outlook remains fragile. Policymakers have yet to address key structural challenges, including low household incomes, high precautionary savings, and rising household debt—factors that continue to weigh on domestic consumption.
Looking ahead, China’s annual "Two Sessions" National People’s Congress begins on Wednesday. While no major policy changes are expected, the event will provide insights into the government’s fiscal strategies and economic priorities. Investors will closely monitor discussions for any signals on future stimulus measures or growth initiatives.
コメント