Reports on China's economy have swung sharply between gloom and relief as markets struggle to assess the country's policy shifts.
A batch of monthly results released on June 9 drove some analysts to worry that China might soon start dragging the global economy down.
"Today's data adds to concerns that global growth is stalling as Greece teeters on the edge of exiting the euro, Spain prepares a request for a bank bailout and U.S. job growth weakens," Bloomberg News said.
Reports pointed to a steeper-than-expected slide in May's consumer price inflation to 3 percent, a 23-month low, according to the National Bureau of Statistics (NBS).
Industrial output rose 9.6 percent from a year before, failing to reach double digits for the second month in a row. Retail sales grew 13.8 percent, the smallest gain in nearly six years.
One analyst suggested that the People's Bank of China (PBOC) must have known the May numbers would be bad when it announced a surprise cut in interest rates two days before, The New York Times said.
A positive turn
But on June 10, the picture turned suddenly positive when the General Administration of Customs (GAC) reported a 14.1- percent trade surge in May. Both imports and exports set records in a sector all but written off during the global slowdown.
One day later, the PBOC sprang another surprise with an announcement that new bank lending in May rose 16 percent from April to 793.2 billion yuan (U.S. $125.6 billion), topping consensus forecasts.
"The data are obviously stronger than our expectations and show that the central bank's loosening measures have taken effect," said HSBC economist Ma Xiaoping, Dow Jones reported.
A Reuters report, citing the trade figures, suggested the economy might already be "out of the woods."
The day-to-day assessments of China's growth prospects may be suffering as much from expectations as from economic factors.
"There's a whole lot of people making a living [by] commenting on and predicting China's economy, mostly short- term," said Pieter Bottelier, a former World Bank official, now a nonresident scholar at the Carnegie Endowment for International Peace in Washington.
"If you're in that business ... then you have to compare what the actuals are to what you said a month ago that they would be," Bottelier said in an interview.
Even China's actual economic results remain ambiguous. For every negative signal, there seems to be a more positive sign, making the direction hard to read.
Last month's growth in industrial output rebounded from a low of 9.3 percent in April, for example. Although retail sales grew from a year earlier at a relatively slow rate for China, the value rose 7 percent from the previous month.
Auto sales and production both jumped 16 percent from a year before, easing fears of a slump, the China Association of Automobile Manufacturers said.
Profits of state-owned enterprises fell 10.4 percent in the first five months of the year, but revenues rose 11.3 percent, the Ministry of Finance reported.
Fixed-asset investment for the five-month period increased 20.1 percent, a rate also considered low for China. But the slowest growth came in the service sector, while manufacturing rose 23.9 percent and extraction industries including farming climbed 37.1 percent.
"Nobody talks about agriculture anymore," Bottelier said, arguing that it has stopped being a cause for economic concern.
Over the past two months, for example, the government has actually intervened to keep pork prices from falling too far because of high production, contributing to the drop in the heavily food-weighted consumer price index (CPI).
A more sustainable course?
Bottelier believes it may be a mistake to focus on headline growth numbers in an economy that is undergoing change toward a more sustainable course.
Higher wages are gradually shifting China away from the low-cost production that drove its resource-intensive industrial boom.
"There are lots of indications that this industrial restructuring process that we've been talking about for years is actually underway now," said Bottelier. "Much of the lower end of the manufacturing sector is being forced onto a higher-technology path."
Gary Hufbauer, senior fellow at the Peterson Institute for International Economics, suggested the PBOC may have cut interest rates because of bad news from Europe as much as China's own economy.
"I see it as an attempt to keep the slowdown in the rest of the world from hitting the Chinese economy," Hufbauer said.
The number-watchers have already raised expectations that China's GDP results for the second quarter may be lower than the 8.1-percent growth in the first quarter.
Wave of worry
The NBS report next month is likely to set off another wave of worry about meeting analysts' expectations, although the government has targeted a growth rate of only 7.5 percent for this year.
One government adviser cited last week by the official English-language China Daily said that second-quarter growth could drop below 7 percent.
Anticipation of another market reaction raises the question of when the slower-growth numbers should trigger legitimate concerns.
"No one wants to see China down at 5 or 6 percent growth because that would mean a big slowdown, certainly for neighboring countries that sell a lot to China," Hufbauer told RFA.
One sign of confidence in the outlook so far is that the government has repeatedly sent signals that it will not unleash another major stimulus package that would start China's inflationary cycle all over again.
"It's a high-wire act to keep the numbers high, but not so high that they spill off into huge bad bank loans and higher inflation," said Hufbauer.
The one-quarter of 1 percent cut in interest rates is seen as a moderate measure, but Hufbauer cautions that a flood of new credit would flow back into the property sector, renewing the unsustainable growth pattern.
The PBOC's policy may not be clear until the second-quarter GDP numbers come out, but until then, it seems to be taking smaller steps.
"I would give them the benefit of the doubt that they are doing the right thing to ease up credit now," Hufbauer said.