China cheers markets with promise of growth
Upbeat economic data from China and India have helped to support stock markets and the price of copper, and calmed fears of a global "double dip" recession.
China's purchasing manager's index – like its counterparts in the West regarded as a reliable leading indicator – registered its first gain in four months in August, ticking up from 51.2 to 51.7. A similar survey of business confidence conducted by HSBC revealed a similar picture.
This is the 18th successive month that the Chinese PMI has stood above the benchmark reading of 50 that indicates expansion rather than recession in the coming months.
The refocusing of the Chinese economy towards domestic consumption was also confirmed in the latest results from the China Automotive Technology and Research Centre, which said that passenger car sales surged in August by 59.3 per cent on the year, to 977,300, halting the decline in car sales seen since March.
The latest GDP figures for the second quarter in Australia added to the good news, as did robust readings from India on business sentiment and exports. Australia's economy grew by 1.2 per cent from April to June, its fastest quarterly rate for three years, as consumer spending and a mining boom drove the economy forward. Meanwhile, the Indian economy is growing at 8.8 per cent a year.
Only reports that the Beijing authorities were planning a renewed effort to rein in the housing bubble weighed down on the wave of optimism.
Forecast to overtake Japan as the world's second-largest economy this year, China is increasingly becoming an engine of regional and world growth as its economic stimulus measures have stimulated domestic demand and boosted growth in surrounding countries.
China's demand for industrial raw materials is having an especially powerful effect on copper – its price on the London Metals Exchange rose a new four-month high of just under $7,600 a ton.
Still, longer-term factors such as the property bubble in China and double-digit inflation in India could yet lead to a sharp slowdown in these powerhouses.
IoS exclusive: MI5 'tried to recruit' Woolwich attack suspect Michael Adebolajo
French soldier stabbed in the neck in Paris
EDL marches on Newcastle as attacks on Muslims increase tenfold in the wake of Woolwich machete attack which killed Drummer Lee Rigby
Fallen angel: Winona Ryder on bouncing back from her decade in the wilderness
Hurricane season fears as warning satellite fails
BMF is the UK’s biggest and best loved outdoor fitness classes
Find out what The Independent's resident travel expert has to say about one of the most beautiful small cities in the world
Nook is donating eReaders to volunteers at high-need schools and participating in exclusive events throughout the campaign.
Get the latest on The Evening Standard's campaign to get London's children reading.
Win anything from gadgets to five-star holidays on our competitions and offers page.