In a significant shift in China's economic landscape, corn futures on the Dalian Commodity Exchange experienced their largest intraday rise in over eight months, climbing by 1.9% on September 30, 2024. This surge is attributed to a series of stimulus measures implemented by Beijing aimed at reviving demand amidst ongoing economic challenges.
Simultaneously, Chinese shares appear to be entering a bull market, with the benchmark CSI 300 Index rising by 6.2% in early trading, marking its most substantial increase since 2015. The index has now gained over 20% since hitting a low on September 13, bolstered by new property easing steps introduced by authorities as part of a broader stimulus package.
Despite these positive developments, China's factory activity has contracted for five consecutive months, highlighting underlying economic weaknesses. The official manufacturing purchasing managers' index stood at 49.8 in September, slightly improving from 49.1 in August but remaining below the critical 50-mark that indicates growth. This trend underscores the challenges Beijing faces in stabilizing the economy.
The implications of these developments are profound, as they reflect China's ongoing efforts to stimulate its economy amid global economic uncertainties. The rise in corn futures and the bullish trend in the stock market could signal a recovery, but the persistent contraction in manufacturing raises concerns about the sustainability of this growth.
Source: Bloomberg, September 30, 2024.