China's top economic planner adopted a more upbeat tone in its latest assessment of the economy this week, marking a change from Beijing's previous cautious outlook and suggesting rising optimism that the country is on track for a solid recovery.

The current status of China's economy can be summarized into "demand expansion, recovering supply and improving expectations," Meng Wei, a spokesperson for the National Development and Reform Commission, said Wednesday.

The new assessment comes a day after the country reported stronger-than-expected gross domestic product growth and stands in sharp contrast with the widely-circulated "triple pressure" term adopted by Beijing in late 2021, when the world's second-largest economy was facing mounting headwinds and had strict Covid restrictions in place.

The People's Bank of China omitted the expression of the "triple pressure" from its official readout of the quarterly meeting of its advisory body earlier this month, analysts from China Galaxy Securities said in a report, in a shift from the previous readout, which still included the term.

"The domestic economy is recovering and improving," the central bank said in the readout, while cautioning that the recovery's foundation isn't solid yet.

The messaging from China's top leadership is noticeably more optimistic than it has been over the past year or so. In an agenda-setting economy-themed conference in December 2021, leaders had cautioned that the economy was facing a triple threat from demand contraction, supply shocks and weakening expectations, warning that the external environment was becoming increasingly complicated, grim and uncertain.

Last year, the economy grew just 3%--expanding at one of its slowest rates in decades--reflecting the steep toll from the strict zero-Covid policies that Beijing set during the pandemic.

Beijing abruptly abandoned the stance last December, and as the country emerged from three years of self-imposed isolation, it posted a 4.5% economic expansion in the first quarter of 2023, beating the 4.0% forecast of economists polled by The Wall Street Journal.

However, there are still doubts about the sustainability of the consumption-led recovery, economists say. The country still faces challenges from weak private-sector confidence and uncertain external demand, with economists questioning whether the current rebound in consumption will be enough to carry the economy through the rest of the year.


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(END) Dow Jones Newswires

04-20-23 0000ET