Danske Bank analyst upbeat about Chinese economy's growth

NICOSIA - China's economy growing faster than expected in the first quarter this year is a good sign for a recovery from its slowdown at the end of 2018, an analyst told Xinhua on Monday.

The latest data showed that the economy grew at 6.4 percent in the first quarter, which "suggests that (the) economy likely bottomed in the beginning of the year and may already have started to recover," said Jens Naervig Pedersen, senior analyst at Danske Bank.

In recent months China has seen a sharp upswing in factory output, with March figures showing industrial production jumping to 8.5 percent.

Rising metal prices are also a good sign, Pedersen said. Figures published Monday showed China's steel and iron ore futures remain fairly buoyant as they shot up nearly 3 percent.

Another reason supporting the renewed optimism is the belief that a trade deal between China and the United States is imminent, after a long drawn-out trade spat.

"A trade deal would further support a recovery of the Chinese economy," Pedersen said. "Progress is being made and we think a deal is likely during this quarter."

Last week, the International Monetary Fund revised up China's 2019 growth projection by 0.1 percentage point to 6.3 percent, citing factors including the recent developments in the China-US trade talks and China's stronger-than-expected expansionary fiscal policy.

Particular importance has also been attached to Chinese Premier Li Keqiang's statement that China would open up more sectors, and treat foreign companies as equals to domestic companies.

On top of that, China's pledge to support the private sector is considered crucial. Foreign portfolio investment in China reached a record high of $120 billion in 2018.

"Reforms of the Chinese economy are important for the longer-term growth prospects," Pedersen said.