‘New Silk road’
Yet recent credit data suggests such attempts have not been particularly successful to date, argued Emily Nicol, economist at Daiwa Capital Markets in a note on Monday.
“With credit data released Friday significantly stronger than expected despite the authorities’ efforts to curb leverage, it remains to be seen whether the weakening in the indicators of new business in the April manufacturing and services sector surveys will indeed manifest themselves in an ongoing slowdown in activity over coming months,” Nicol highlighted.
The data releases came against the backdrop of a summit in Beijing in honour of President Xi Jinping’s “Belt and Road Initiative” which China’s official news agency Xinhua describes as “a Chinese solution to global economic blues”.
President Xi’s pledge of $124 billion on Sunday to go towards expanding links along his hoped-for “new Silk road” between Asia, Africa and Europe, helped investors look past the flagging data indications to drive the Shanghai Composite to close 0.22 percent higher and the CSI 300 up 0.41 percent on Monday.
“We have very positive thinking on the Belt and Road initiative”, Jyrki Katainen, vice-president of the European Commission, told CNBC at the conference on Monday.
“It aims to deepen economic ties and trade links between Europe and China and it focuses not only on infrastructure but also on wider issues. In our agenda, trade policy, especially investment agreements, is most important as it would strengthen connectivity between the European economy, European companies and China,” he explained, adding data protection and infrastructure projects were also key elements of the strategy.
However, the proof of the initiative’s success will be in the pudding, Katainen cautioned.
“Everything depends on the implementation.”
