Chinese officials seized on the temporary truce during a press briefing. The initial trade agreement will give people more reason to be optimistic about the country’s economic growth, said Ning Jizhe, China’s national statistical chief. He added that the deal will help China deepen its economic relationship with the United States.
Vice Premier Liu He, who was in Washington this week to sign the trade deal, also told reporters Wednesday that he is optimistic about the economy. He suggested that China is relying less on debt and is being driven by innovation.
“The signing of the phase-one trade deal is a signal that the situation is unlikely to deteriorate,” said J.P. Morgan Asset Management Global Market Strategist Chaoping Zhu.
Even with the “phase one” deal, China has other things to worry about, according to economists at Capital Economics.
“Despite the recent uptick in activity, we think it is premature to call the bottom of the current economic cycle,” they said in a research note. They added that the effects of the trade deal will be offset by a renewed slowdown in domestic demand, which will trigger further action by China’s central bank.
Ning, the Chinese statistical chief, admitted that the economy will be pressured this year. But he also said China will take action as necessary to help stave off a serious slowdown, on top of other stimulus measures it has already announced. That should help the economy maintain “stable growth” this year, he added.
Others also pointed to promising figures buried in Friday’s data. Industrial production and retail sales data for December outperformed forecasts, said Jeffrey Halley, senior market analyst for Asia Pacific at Oanda.
That kind of data suggests that “the engine room of the world is slowly recovering its mojo,” he added.