June 23, 2024

Ferrum College : Iron Blade Online

Complete Canadian News World

China’s economic recovery is mixed, with factory production jumping and retail sales lagging

China’s economic recovery is mixed, with factory production jumping and retail sales lagging

Stay informed with free updates

Chinese industrial production rose more than expected last month, but retail sales grew more slowly in a sign that weak consumer sentiment is weighing on the recovery of the world’s second-largest economy.

Official data from the National Bureau of Statistics showed on Friday that industrial production grew 6.7 percent year-on-year in April, beating economists polled by Bloomberg’s expectations of 5.5 percent and 4.5 percent growth in March.

However, retail sales grew just 2.3 percent compared to the previous year, well below analysts’ expectations of 3.7 percent, and down from 3.1 percent growth in March, suggesting that authorities will need to step up efforts to stimulate domestic consumption.

China’s economy has shown mixed signs of recovery in recent months, with exports returning to growth in April, but domestic sentiment suffering amid a deep downturn in the real estate sector.

The government has also signaled its readiness to step up stimulus efforts, with the People’s Bank of China starting to sell 1 trillion renminbi ($140 billion) worth of long-term bonds on Friday. Before the sale, a government adviser said the bonds were intended to “give full play to the critical role of government investment in supporting economic growth.”

China’s cabinet, the State Council, also announced that it will hold a meeting on Friday afternoon to address problems in the housing sector, which has suffered a slowdown for years despite numerous initiatives to support debt-laden property developers.

China’s benchmark CSI 300 index of stocks listed in Shanghai and Shenzhen fell 0.2 percent, while the Hang Seng Property Index, a basket of Hong Kong-listed developers, fell as much as 0.9 percent before settling 0.4 percent higher. percent. cent.

Chinese policymakers are increasingly relying on investment in the industry to offset lagging growth in other sectors and relieve pressure on the faltering real estate market and debt-burdened local governments. High-tech industrial manufacturing was a bright spot in the April data release, expanding 11.3 percent from a year earlier.

But the industrial policy is fueling trade tensions with the United States and the European Union, China’s most important export markets, which have accused Beijing of unfair trade practices by increasing excess capacity and flooding their markets with low-cost goods.

US President Joe Biden this week sharply raised tariffs on $18 billion worth of Chinese imports, ranging from electric cars to solar cells, in a pre-election bid to protect local jobs. The European Union has also opened anti-subsidy investigations into China’s electric car, wind turbine and solar panel industries.

China warned that it would respond “firmly” to US tariffs and accused Washington of violating World Trade Organization rules.

Lin Song, chief economist for Greater China at ING, said auto production rose 16.3 percent in April from a year earlier, but sales fell 5.6 percent, data that “may add fuel to the fire” due to accusations of… Excess energy in China. He added that consumption growth “is likely to remain moderate” this year “as consumer confidence remains pessimistic.”

In other data released on Friday, the National Bureau of Statistics said property prices in so-called first-tier cities fell by 2.5 percent year-on-year in April. Prices also decreased compared to the previous month, down 0.6 percent, a decrease of 0.5 percentage points from March.

Meanwhile, investment in fixed assets grew 4.2 percent year on year in the January-April period, lagging Bloomberg survey analysts’ expectations of 4.6 percent growth and a 4.5 percent increase in the January-March period.

Beijing is trying to diversify into developing and non-Western markets, especially as it invests in high-tech goods that compete directly with those in the European Union and the United States.

Russian President Vladimir Putin visited Beijing this week for a two-day state visit, where talks were held on trade, investment, defense and the war in Ukraine.

See also  Elon Musk's Twitter obsession isn't the primary reason for Tesla's stock decline