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April retail sales, industrial production and investment data
Pictured here is a BYD factory producing new energy-powered trucks in Huai’an, China, on February 21, 2024.
Nurfoto | Nurfoto | Getty Images
Industrial production increased 6.7% in April from a year earlier, exceeding expectations for 5.5% growth. This was also a sharp recovery from March’s 4.5%.
But investment in fixed assets increased by 4.2% in the first four months of the year, lower than the expected increase of 4.6%.
Real estate investment accelerated its pace of decline and fell 9.8% year-on-year in the first four months of 2024.
Investment in infrastructure and manufacturing during this period slowed slightly compared to the level reported in March.
The urban unemployment rate in April was 5%. The agency previously said it would publish the age breakdown in the days following the general release of the data.
Retail sales grew 6.8% year on year during the recent holiday period from April 29 to May 3, according to China’s Ministry of Commerce.
The ministry said retail sales of household appliances increased by 7.9% during this period, while those of automobiles increased by 4.8%, driven by trade incentives across the country.
“The main indicators of industry, exports, employment and prices improved globally, maintaining new driving forces.[ing] rapid growth,” the agency said.
Some consumers who are uncertain about their future income and other aspects will remain cautious about spending, said Bruce Pang of JLL.
But he noted that improving employment data and growth in services consumption indicated that retail sales could improve in the future.
The statistics department said in a statement that April’s figures were affected by the May 1 Labor Day holiday and last year’s high base.
An agency spokeswoman, Liu Aihua, highlighted that last year, the multi-day May 1 Labor Day holiday included two days in April. This year, the holiday only started on May 1st.
She said the real estate industry continues to be in a period of adjustment.
China was also scheduled to begin a six-month program on Friday to issuing bonds lasting decades to finance strategic projects. Oxford Economics expects that most of any economic impact will not be felt until the first half of next year.
Liu noted that issuing ultra-long bonds could also help boost market confidence.
Other data released for April pointed to a mixed growth picture.
Exports grew year on year in Aprilan increase of 1.5% and in line with expectations, while imports grew much more than expected, an increase of 8.4%.
In another indication of stabilization of domestic demand, consumer prices rose last month.
But a measure of factory-level prices continued to decline. New loan data for April dropped to levels not seen in at least two decades, largely due to changes in data measurement, but also reflecting weak demand by businesses and households for loans for the future.
The prolonged recession in the real estate sector has not yet shown signs of a significant recovery, with many pre-sold apartments still under construction. More cities have eased restrictions on home purchases in recent weeks in a bid to boost sales.
Officials from the Ministry of Housing, the central bank and the financial regulator are scheduled on Friday afternoon to hold a press conference on policies supporting the delivery of homes.
Dan Wang, chief economist at Hang Seng Bank (China), said in an interview late last month that he expected China’s property market to stabilize by the end of next year.
“In fact, it seems to me that the policy has succeeded, in a very brutal way, because it is happening too quickly, because it has essentially stopped speculation,” she said.
While the housing crisis has taken a toll on middle-class wealth in particular, it highlighted that the overall economy has held steady.
“Leaving aside the quality of the data, it appears that the economy is capable of offsetting a large loss in the housing market through industrial investment and production,” Wang said. “It has shown some strength in the way the Chinese economy is organized and the way its industrial policy has been conducted.”
Chinese official GDP grew 5.3% in the first quarter year-on-year, better than expectations for a 4.6% increase. The country has set a GDP growth target of around 5% for 2024.
The EU Chamber of Commerce in China told reporters last week that recent economic pressures appear cyclicaland that it is more important for foreign companies to see an increase in domestic demand than in industrial investment.
Retail sales grew 6.8% year on year during the recent holiday period from April 29 to May 3, according to China’s Ministry of Commerce.
The ministry said retail sales of household appliances rose 7.9% during that period, while those of automobiles rose 4.8%, driven by all over the country exchange incentives.