Growth recovery seen in new data

China's economic data for March may show some improvement after dismal growth in the last two months, analysts said yesterday ahead of the release of economic figures next week.

But the revival in March figures, to be released on Tuesday and Wednesday, will not significantly change the broader picture of a weak first quarter in the world's second-largest economy.

Wang Tao, an economist at UBS, said China's gross domestic product may have softened to 7.4 percent in the first three months, lower than the target of 7.5 percent for the year.

"While first-quarter growth was likely quite weak, March saw certain tentative signals of activity pick-up," Wang said. "Some positive signs started emerging as power generation shot up and railway freight and crude oil processing accelerated as well."

However, the modest recovery in March will only partly offset January-February's weak start.

Tang Jianwei, an economist at Bank of Communications, shared Wang's view.

"March is a time when everything returns to normal from the Spring Festival holiday," Tang said. "We look forward to seeing some improvements when the engines in the factory re-start."

Tang projected industrial production growth to return to 9 percent in March from 8.6 percent in the first two months, and fixed-asset investment to quicken to 18.5 percent last month, up from 17.9 percent in the January-February period.

Data already released showed that Chinese state-owned companies reported their first rebound in four months. The official Purchasing Managers' Index, a comprehensive gauge of operating conditions in mostly state-owned industrial companies, ticked up to 50.3 in March from 50.2 a month earlier, the National Bureau of Statistics and the China Federation of Logistics and Purchasing said earlier this week.

The non-manufacturing Purchasing Managers' Index, a gauge of vitality in the service sector, dropped 0.5 points from a month earlier to 54.5 in March. A reading above 50 means expansion in both surveys.

On Wednesday, China announced measures to steady its stumbling economy, including tax cuts for small companies and plans to speed up the construction of railway lines.

Wang expected growth momentum to rebound in the second quarter on the back of reduced policy uncertainties, acceleration of ongoing construction and investment, and the launch of new projects already approved by the government.