Asian stock markets slightly rebound amid China developments

To end the trading week, Asian stock markets grew a little as China’s industrial production for April performed better than expected, rising 3.9% year-on-year.

While the U.S. tries to maintain its course to recovery, Asian stock markets attempted to respond positively to China’s exceeded expectations in terms of how it recovered from an economic standpoint.

Chinese companies productive amid US-China trade war

Mainland Chinese stocks have ended flat, with the Shanghai composite shedding 0.07% at the close. The Hang Seng Index closed 44 points below, while the Nikkei 225 and KOSPI barely changed, as well gaining about 0.62% and 0.12%, respectively.

Analysts have observed that despite the conflict that has been growing between the U.S. and China this week amid the trade war, Chinese companies have been productive as they have developed higher valued goods.

Recent reports also came in that China could be the main driver for turning the luxury goods market around. Investors have yet to assess the economic impact that China will have on the rest of the world.

American tariffs imposed on Chinese goods backfire

According to sources, even before the U.S. and China waged a trade war for over a year, overhead costs of operating in China were going up due to the rising cost of wages.

Furthermore, American tariffs imposed on Chinese products only made it more expensive to operate.

Patrick Winter, Asia Pacific managing partner at Ernst and Young, saw the economic potential of China despite some of the factory activities are moving out of the mainland. He adds:

“We are actually seeing this movement from manufacturing in China to other locations, but also China then investing in technology.”

Real estate investment in China rebounds

Aside from the surprise industrial output that China has reported, Reuters observed that the country’s real estate investment has become attractive for global investors based on their calculations.

Property investments, which comprises of a mix of residential and commercial spaces, climbed 7% in April. In addition, property sales also showed signs of improvement with a 2.1% drop by floor area compared with 14.1% in March.

Despite China’s economic contraction in the first-quarter, property rates are looking attractive in the eyes of global investors. However, the central bank warned against property bubble risks despite pledging to step up policy measures to support the economy.

China has also been trying to regain its dominance in the cryptocurrency market as they slowly pave the road to economic recovery.

At this point, Asian stock markets seem to be seeing a positive outlook as China works its way to improve its economy.

Images courtesy of T.Dallas/Shutterstock, chuyuss/Shutterstock

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