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Is China's Economy Bouncing Back?

This FT piece says maybe, even though exports (the main driver of Chinese economic growth) are still shrinking. The key boost is in the mortgage market, which doesn't seem super-sustainable. From what I can make out, the Chinese authorities are simply lending aggressively to prevent a real estate bubble from deflating entirely:

The fall in the real-estate market has also shown some indications of having bottomed out, with a strong rebound in property transaction volumes and the first slight rise in month-on-month prices since last July. ...

Cao Jianhai, a senior government analyst, told the FT he expects urban property prices to fall as much as 40 to 50 per cent across the country in the next two years as a result of huge oversupply and a serious disconnection between prices and income levels. ...

He said positive signs in the property sector were being partly driven by a surge in bank lending, which grew a record Rmb1,890bn in March, bringing the total for the first quarter to Rmb4,580bn – more than the entire amount of new loans extended last year and nearing the government’s full-year target of at least Rmb5,000bn in 2009.

Also, there are some signs Chinese consumers are beginning to pick up the slack a bit, though the days when China won't have to depend on American consumers living way beyond our means as we vaccuum up their exports still seem far off:

Within China, sales of passenger vehicles in March rose 10 per cent from a year earlier, and 27 per cent from February, to 772,400, according to the China Association of Automobile Manufacturers, a sign that consumer demand remains robust.

I guess this is not exactly going to help us cut those carbon emissions either...

--Noam Scheiber