The "excavator index" surged, the three major PMI indices rebounded rapidly, and Chinese government bonds will be included in the FTSE World Government Bond Index… Recently, several important indices have been released in succession. Industry insiders point out that multiple signs indicate that in the first year of the "14th Five-Year Plan," the Chinese economy is showing increasing signs of recovery, with new vitality constantly emerging. The strength and potential of the Chinese economy not only inject momentum into its high-quality development but also become a powerful magnet for foreign investment.

As one of the leading indicators of economic operation, the Purchasing Managers' Index (PMI) has achieved 13 consecutive months of growth. In March, China's manufacturing PMI, non-manufacturing business activity index, and composite PMI output index were 51.9%, 56.3%, and 55.3%, respectively, up 1.3, 4.9, and 3.7 percentage points from the previous month. The rapid rebound of the three major PMI indices confirms that the overall Chinese economy continues its expansionary trend.

With the arrival of the production and construction season, business activities in the upstream and downstream of the supply chain have recovered. In March, China's logistics industry prosperity index was 54.9%, up 5.1 percentage points from the previous month. The logistics industry has returned to expansion territory, showing a clear upward trend.

As a key indicator for observing China's infrastructure investment, the "excavator index" has also continued to rise. According to data released by the China Construction Machinery Association, in February, the 26 excavator manufacturers included in the association's statistics sold a total of 28,300 excavators of various types, a year-on-year increase of 205%.

Industry insiders point out that the release of these important indices releases a strong sense of economic warmth, highlighting the strength and vitality of the Chinese economy, and continuously strengthening market expectations and confidence.

"The positive performance of various leading indices reflects the steady pace of the macroeconomic recovery. On the one hand, the steady increase in demand for infrastructure construction is expected to drive the accelerated recovery of domestic manufacturing industries such as construction machinery. On the other hand, the production side has seen a rebound in activity, structurally demonstrating relatively strong domestic investment and consumption demand," Professor Sun Chuanwang of the School of Economics at Xiamen University told the *Economic Information Daily*.

Fan Ruoying, a researcher at the Bank of China Research Institute, told the *Economic Information Daily* that in the first quarter of 2021, China's economy generally continued its stable recovery. Due to the low base effect of the previous year, major economic indicators all showed a significant jump. These included: a rebound in economic activity; a significant improvement in business expectations; a continued recovery in consumption; and a restorative rebound in investment.

"Leading indicators suggest a continued recovery in economic activity, showing a high growth trend. While the low base effect plays a role, the main reason is the significant rebound in demand after the effective control of the epidemic. It is foreseeable that the Chinese economy will have a 'good start' in the first year of the '14th Five-Year Plan'," Liu Xiangdong, deputy director of the Economic Research Department of the China Center for International Economic Exchanges, told the *Economic Information Daily*.

In his view, the driving forces behind China's economic growth include both the rebound after the epidemic crisis and the new dividends released by the continued comprehensive deepening of reforms. Furthermore, China's adherence to the "six stabilities" and "six guarantees" macroeconomic control policies, along with the implementation of a more proactive fiscal policy and flexible and precise monetary policy, has effectively promoted the recovery and healthy development of enterprises, especially small and medium-sized enterprises (SMEs), and stimulated the vitality of market entities." In fact, since the beginning of the year, from the central government to various ministries, a series of policies have been intensively planned and introduced to accelerate the cultivation of a complete domestic demand system, expand effective investment, continuously deepen market-oriented reforms, and increase support for small and medium-sized enterprises (SMEs). These detailed task lists outline the blueprint for the first year of the 14th Five-Year Plan.

Local governments are also actively planning strategies to stabilize the economy based on their in-depth analysis of the economic situation, launching a multi-pronged approach including promoting investment, expanding consumption, and pursuing transformation, to accumulate more new momentum for economic development.

Many institutions have also expressed confidence in the Chinese economy. FTSE Russell, one of the world's three major bond index providers, recently announced that after months of monitoring and review, it has decided to include Chinese government bonds in its FTSE World Government Bond Index (WGBI) starting October 29th this year.

"FTSE Russell's inclusion of Chinese government bonds in its flagship index demonstrates, on the one hand, the high strategic allocation and investment value of Chinese government bonds; on the other hand, it also highlights the contribution and influence of the Chinese economy on global economic development," said Sun Chuanwang.

Fan Ruoying believes that Chinese government bonds are highly attractive to foreign investors. This is partly because, against the backdrop of increasingly negative interest rates globally, Chinese government bonds offer relatively high yields. Furthermore, China's economic performance is better than most global economies, and Chinese government bonds are safe and stable, making them a good investment "safe haven."

"RMB bonds are gaining recognition from international investors, and the attractiveness of China's capital market to foreign investors is increasing. This is due to the support of China's economic fundamentals, and also to China's continuous deepening of capital market reforms, improvement of capital market systems, and promotion of capital market opening. Foreign investors are accessing China's capital market with more familiar rules, and their acceptance of China's capital market continues to rise," said Liu Xiangdong.

Industry insiders point out that innovation-driven development and institutional reforms will remain the driving force for the continued healthy development of the Chinese economy. To further unleash the potential of the Chinese economy, it is necessary to strengthen its capabilities and address its weaknesses, and to facilitate the smooth dual circulation of domestic and international markets.

Fan Ruoying told the *Economic Information Daily* that the next step is to place greater emphasis on expanding domestic demand; continue supporting small and micro enterprises; pay more attention to the precision of fiscal and monetary policies; accelerate the optimization and upgrading of industrial and supply chains; cultivate and strengthen advantageous industrial clusters; and enhance the core competitiveness of industries.

"To better unleash the potential of the Chinese economy, we must not only focus on building a high-standard market system, but also promote better matching between supply and demand, smooth the economic cycle, deepen market system reforms, especially income distribution reforms, create a favorable institutional environment for building a new development pattern, and continuously enhance the resilience of economic growth," Liu Xiangdong told the *Economic Information Daily*.