Local Companies Forecast a Growth Rebound for China

Months before China closes the lid on the Year of the Dragon, Guangzhou Aoking Leather Co. is ramping up luggage production, adding to signs that the slowdown in the world’s second-largest economy is poised to ease.

“People’s sentiment and confidence in the economy and in their income prospects are improving,” says Song Chunhong, a deputy marketing manager at the company in coastal Guangdong. Sheng Laiyun at the National Bureau of Statistics sees broader signs of recovery in the more-developed seaboard provinces that are usually first to register shifts in the economy’s prospects. “The duck knows first when the river becomes warm in spring,” he said last month, quoting an 11th-century Chinese poem.

Manufacturing expanded in October for the first time in three months, according to a purchasing managers’ index released yesterday by the government.

While China’s years of 10 percent growth may be behind, a stabilization around 8 percent would help counter what the International Monetary Fund last month called an “alarmingly high” risk of a steeper drop in global expansion. Overseas firms from computer-maker Dell Inc. (DELL) to Hong Kong jewelry makers see sales in China improving in coming months, and domestic manufacturers are more confident, a release showed yesterday.

“We have seen an increasing amount of evidence for green shoots” in China, said Lu Ting, head of Greater China economics at Bank of America Corp. in Hong Kong who this week raised his fourth-quarter forecast for economic growth to 7.8 percent from 7.5 percent. The nation’s gross domestic product will rise 8.1 percent in 2013, up from 7.7 percent in 2012, he said.

Via – Bloomberg

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