China’s economy is stabilising after the slowdown of recent months, data suggest, easing worries about a hard landing, but raising questions about the government’s commitment to rebalancing.

A slump in manufacturing and property, China’s traditional growth drivers, has slammed global commodity prices and shrunk profits at Chinese groups tied to the old growth model. Planned layoffs in steel, coal and other over-capacity sectors have led to labour unrest and concern over unemployment.

However, recent data suggest the tide is turning, at least temporarily. The Caixin purchasing managers’ indices for both manufacturing and services rose sharply in March, survey results showed yesterday.

The manufacturing PMI hit 49.7 in March, its highest in over a year and much better than expected. Caixin’s services PMI rose to 52.2 in March from 51.2 in February. The 50- point level divides contraction and expansion.

The latest figures suggest recent stimulus efforts – notably in the property sector – have succeeded in arresting the slowdown. – Copyright The Financial Times Limited 2016