China's economy expanded by 7.9% in 2Q, up from 6.1% in 1Q and barely ahead of what most economists had estimated. Even more impressive, fixed asset investment, which includes roads, infrastructure, etc., continues to accelerate, rising 33.6% versus a year ago. So far it looks like the government's stimulus is overcoming weakness in the global economy and exports.
Although a solid rebound in activity appears to be developing, the government cautioned that "there are many difficulties and challenges that remain," momentum is unstable, and the recovery pattern is unbalanced. A spokesman added that proactive policies designed to support growth will continue.
US exports picked up in May, signaling a recovery may be in the works in Asia, and Intel (INTC) just reported a strong quarter and expects sales to climb in 3Q.
The upbeat comments from the world's largest maker of semiconductors are encouraging and and are giving way to renewed optimism that other multinationals may offer similar remarks.
Wednesday, July 15, 2009
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