Some China-watchers see a light at the end of the tunnel for the country's faltering economy. These optimists note that there are mounting signs that the government's stimulus efforts — and in particular the flood of credit unleashed by the Central Bank last November — are beginning to have an impact.
Hopeful signs have indeed appeared. Retail sales are still growing at a robust 16% annual rate. The Purchasing Managers Index, an indicator of the health of the manufacturing sector, rebounded into positive territory in March after falling for months, indicating that industrial output may be expanding again. Home sales are also showing signs of recovery, as is lending. Even the stock market, which had plunged by some two-thirds from its peak in 2007, has clawed back 25% in the last few months.
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