China’s economic figures point to oncoming recovery

According to data released in China on Friday by National Bureau of Statistics industrial production in China is in growth, increasing by 8.9% in May. This result is above expectations of 7.8% rise by Dow Jones Newswires, but is exactly the same as has been predicted by the 21st Century Business Herald and Ming Pao newspapers.

According to Statistics Bureau data released Thursday, China's exports in May from a year earlier fell by 26.4%, import declined by 25.2%. Both figures marked their seventh-straight on-year decline.

"While improving this month, China's industrial production growth data has been in contrast with expansion in the Purchasing Managers Index," said J.P. Morgan's China equities chief, Jing Ulrich. "China's May PMI of 53.1 represented a third-successive month of expansion in the manufacturing sector, suggesting that managers are cautiously optimistic in their outlook," he said.

Also Statistics Bureau reported Friday about rise in retail sales by 15.2% in May. In April it rose by 14.8%.

Additionally, according to data from the People's Bank of China, bank lending is also rising. In May new yuan-denominated bank lending is equaled to 664.5 billion yuan ($97.2 billion), while in April it totaled to 591.8 billion yuan.

M2 money supply climbed 25.74% at the end of May from a year earlier. "The stabilization in money supply is as expected, considering the record rate of growth at the beginning of the year," said Ulrich. "The rapid pace of credit creation in recent months has had a stirring impact on China's corporate sector, housing and stock markets."