China economic activities rise but still below market hopes
Print Edition
CHINA’S economic activities improved in May but they still fell below market expectations, according to data released by the National Bureau of Statistics yesterday.
Industrial production grew 6.1 percent from a year earlier last month, up from 5.9 percent in April and 5.6 percent in March.
Retail sales rose 10.1 percent to 2.4 trillion yuan (US$387 billion) in May, accelerating from the gain of 10 percent a month ago.
Fixed-asset investment added 11.4 percent to 17.1 trillion yuan in the first five months, easing from the 12 percent gain in the first four months.
Zhou Hao, an economist at Australia & New Zealand Banking Group Ltd, said China’s economic activities remained sluggish.
“In general, there is little improvement,” Zhou said. “The new data, plus the soft external trade figures released earlier, suggest that China’s economic growth could miss 7 percent in the second quarter.”
But Lian Ping, chief economist at the Bank of Communications, said China’s economy remained stable.
“The data in recent months were much steadier than those in the first quarter,” Lian said. “With the policy effects filtering through, we believe the growth will show more signs of stabilization.”
China has cut both interest rates and reserve requirement ratio in the past few months and unveiled other fiscal stimulus to bolster a softening economy. In the first quarter, China’s gross domestic product rose 7 percent — the weakest quarterly growth in six years.
China has set the official annual GDP growth target at around 7 percent for this year, down from the previous goal of 7.5 percent.
Earlier data showed China’s exports improved slightly in May while imports slumped further to reflect a still disappointing picture for trade.
But the official Purchasing Managers’ Index, a comprehensive gauge of operating conditions in factories, stood at 50.2 in May, better than 50.1 in April and indicating a faster growth in manufacturing.
ANZ’s Zhou said the central bank may unveil other targeted easing measures, such as more lending for innovative startup companies, to help keep the growth momentum on track.
Also yesterday, the Ministry of Commerce said China’s foreign direct investment gained 10.5 percent from a year earlier to US$53.8 billion in the first five months. The pace was a slight dip from the 11.1 percent rise in the first four months.
The investment growth was led by funds in services, which grew 23.5 percent annually to US$33.9 billion in the first five months and accounted for 63 percent of the total.
Funds flowing into production of telecom equipment, transport equipment and chemical rose 4.8 percent, 4.4 percent and 2 percent respectively between January and May, the ministry said.
The 28-country European Union invested US$3.3 billion in China in the first five months, up 23.2 percent year on year.
The 64 countries involved in China’s “One Belt, One Road” initiative raised their investment by 11.6 percent to US$2.9 billion during the period.
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