China’s recent economic data pointed to slower growth on the consumer side, with retail sales rising by 2.3% in April, less than expected. However, industrial activity remained strong, with industrial production increasing by 6.7%. Fixed asset investment rose by 4.2% for the first four months of the year, lower than expected. Real estate investment continued to decline, down 9.8% year-on-year for the same period.
The urban unemployment rate in April was 5%, with the breakdown by age yet to be released. The Ministry of Commerce reported that retail sales grew by 6.8% year-on-year during a recent holiday period, with home appliances and automobiles showing growth. The National Bureau of Statistics highlighted improvements in industry, exports, employment, and prices, with new driving forces contributing to growth.
Despite some uncertainties causing consumers to be cautious about spending, improving employment data and growth in services consumption indicated that retail sales could improve in the future. The bureau attributed the slower growth in April to the timing of the May 1 Labor Day holiday and the high comparison base from the previous year. The real estate sector was described as being in a period of adjustment.
China began issuing decades-long bonds to fund strategic projects, with the economic impact not expected to be felt until the first half of the following year. Other data released for April showed mixed signals, with exports and consumer prices increasing, but factory-level prices declining. New loan data for April was also low, reflecting sluggish demand in borrowing for the future.
A prolonged slump in the real estate sector continued, with many pre-sold apartments still under construction. To boost sales, several cities have eased housing purchase restrictions. Government officials were set to announce policies to support home deliveries in a move to stabilize the property market. Despite the challenges in the real estate sector, China’s overall economy has shown strength through industrial investment and manufacturing.
China’s official GDP grew by 5.3% in the first quarter, surpassing expectations. The country set a GDP growth target of around 5% for 2024. The EU Chamber of Commerce in China expressed that recent economic pressures are cyclical, emphasizing the importance of increasing domestic demand for foreign businesses. The Ministry of Commerce reported growth in retail sales of home appliances and automobiles during a recent holiday period, boosted by trade-in incentives.
