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June 16, 2020

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Economic recovery remains on track

CHINA’S economic activities remain on track for recovery as the latest data revealed an accelerated resumption across the board. But the economy still faces challenges from the global spread of the novel coronavirus, analysts said.

Factory activities continued to pick up in May with the value-added industrial output, an important economic indicator, going up 4.4 percent year on year, 0.5 percentage points higher than in April, data from the National Bureau of Statistics showed yesterday.

Output of the equipment manufacturing sector and the high-tech manufacturing industry in May grew by 9.5 percent and 8.9 percent, respectively, indicating continuous optimization of the industrial structure, the bureau said.

Other key economic indicators also showed signs of a rebound on the back of supporting policies to coordinate growth and the control of the COVID-19 epidemic.

In the first five months, fixed-asset investment declined 6.3 percent year on year to 19.92 trillion yuan (US$2.81 trillion), narrowing by 4 percentage points from the decrease in the first four months.

The service sector expanded 1 percent in May from a year earlier, reversing the 4.5 percent drop in the previous month, while for the January-May period it fell 7.7 percent year on year, compared with the decline of 9.9 percent in the first four months.

China’s retail sales of consumer goods, a major indicator of consumption growth, declined 2.8 percent year on year in May, rebounding from a drop of 7.5 percent in April.

Despite a broader consumption downturn, online sales continued to be active as consumers turned to online services when staying indoors, with an increase of 4.5 percent year on year in the first five months, quickening by 2.8 percentage points from the first four months, the data showed.

Auto sales growth ticked up to 3.5 percent year on year in May from 0 percent in April, in line with the data reported by the China Passenger Car Association, which indicated passenger car retail sales (by volume) grew 1.7 percent in May from a year earlier to reverse the 5.6 percent drop in April.

The data also showed China’s job market remained generally stable in May, with the surveyed unemployment rate in urban areas standing at 5.9 percent, down 0.1 percentage points from the previous month.

However, in the first five months 4.6 million new urban jobs were created, 1.37 million fewer than the same period last year.

Commenting on the data, Wen Bin, chief analyst at China Minsheng Bank, said China’s economy continued to ride the wave of recovery last month with improved demand for production, but a few indices were still lower than the same period last year.


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