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30th Jan 2023

China offers market relief from euro-crisis

  • Miners and welders traded best on Wednesday after positive news from China (Photo: Wikipedia)

Better-than-expected Chinese economic figures helped markets to bounce back on Wednesday (12 July), after a plunge caused by worries over the spreading euro-crisis.

China's annual gross domestic product grew 9.5 percent in the second quarter, above market speculations of 'only' nine percent growth ahead of the release. It is however slightly slower than in previous quarters, down from 9.7 percent growth.

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Chinese industrial output was up 15.1 percent in June, the maximum since May 2010, despite an increase in interest rates by the central bank. Retail sales also boomed at their fastest pace since January, with a 17.7 percent growth compared to last year.

Metal industries came out on the winning side of world markets amid strong confidence in Chinese demand in this sector, after having fallen nearly five percent over the previous three trading days.

The euro also gained some ground lost to the US dollar in recent days, after Moody's on Wednesday warned it may downgrade the US credit rating from its triple A status if squabbles of the government's debt ceiling are not put to an end soon.

According to the International Monetary Fund's projections last month the Chinese economy is expected to grow by 9.6 percent this year, while the European economy, grappling with a spreading sovereign debt crisis, is tipped to grow by a maximum of two percent.

China: 'You can't depend on us alone to rescue Greece'

A 'regular' phone call between EU commission chief Jose Manuel Barroso and Chinese Prime Minister Wen Jiabao on Friday morning was aimed at reassuring markets that China will continue to support the ailing eurozone. But a Chinese diplomat noted that Beijing will only buy those bonds guaranteed to be paid back.

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