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Wan LixinOpinion deputy editor of Shanghai Daily
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Output falters, retail sales surprise
By Wang Yanlin |
May 14, 2009, Thursday
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Print Edition
Print Edition
FOR the second straight day, China posted a bad-news, good-news tandem of economic data that pointed up the complexity of trying to predict whether the country's slowdown has bottomed out.
And although the negative figures were significant, the upside numbers provided additional indications that the country's efforts to transform its export-driven economy to one based more on domestic consumption might be starting to gain traction.
On the downside, industrial output rose only 7.3 percent in April on a yearly basis, compared with an anticipated 8 percent and an advance of 8.3 percent in March, the National Bureau of Statistics reported yesterday.
At the same time, the bureau said China's retail sales grew 14.8 percent to 934.3 billion yuan (US$136.9 billion), beating forecasts of a 14.2 percent rise. The April figure outpaced the 14.7 percent increase in March and the 11.6 percent boost in February.
On Tuesday, China's Customs administration reported that exports declined for the sixth straight month, dipping 22.6 percent in April to US$91.9 billion - well below analysts' predictions of a 15 percent year-on-year drop. And the same day, the national statistics bureau said urban fixed-asset investment jumped 30.5 percent in the first four months to 3.71 trillion yuan.
"China's stimulus package has been paying off by spurring domestic spending, which in part serves to offset the worsening situation on other fronts such as trade and output," said Li Maoyu, an analyst at Changjiang Securities Co.
He added that the slowdown in industrial production was also partly due to the diving exports.
Sun Lijian, an economics professor at Fudan University, said exports may continue to plunge but that more investment by the government and more spending after the dip in consumer prices could boost domestic demand and offset the negative influence of declining trade.
"I believe that China's recovery will come faster than other major economies. But it seems the comeback won't be easy," Sun said yesterday.
China's consumer prices and producer prices both declined in April, giving more room for the country to implement what it calls a "moderately loose" monetary policy.
The reduction in prices and increase in fixed-asset investment may boost both retail sales and industrial output in the coming months, analysts said.
Wang Qing, an economist at Morgan Stanley, said the April data in general suggested that China's economy was finding its way along the recovery track.
"We expect monetary policy to remain adequately loose and supportive of growth until a true recovery is under way, which may materialize by mid-2009," Wang said.
Among the retail sales breakdowns, vehicle sales rose 18.5 percent year on year last month, the highest rate of growth among all consumer products.
Sales of construction and interior decoration materials increased 10.8 percent, and grain and edible oil sales were up 4.8 percent.
Telecommunications equipment sales fell 8.4 percent in April.
And although the negative figures were significant, the upside numbers provided additional indications that the country's efforts to transform its export-driven economy to one based more on domestic consumption might be starting to gain traction.
On the downside, industrial output rose only 7.3 percent in April on a yearly basis, compared with an anticipated 8 percent and an advance of 8.3 percent in March, the National Bureau of Statistics reported yesterday.
At the same time, the bureau said China's retail sales grew 14.8 percent to 934.3 billion yuan (US$136.9 billion), beating forecasts of a 14.2 percent rise. The April figure outpaced the 14.7 percent increase in March and the 11.6 percent boost in February.
On Tuesday, China's Customs administration reported that exports declined for the sixth straight month, dipping 22.6 percent in April to US$91.9 billion - well below analysts' predictions of a 15 percent year-on-year drop. And the same day, the national statistics bureau said urban fixed-asset investment jumped 30.5 percent in the first four months to 3.71 trillion yuan.
"China's stimulus package has been paying off by spurring domestic spending, which in part serves to offset the worsening situation on other fronts such as trade and output," said Li Maoyu, an analyst at Changjiang Securities Co.
He added that the slowdown in industrial production was also partly due to the diving exports.
Sun Lijian, an economics professor at Fudan University, said exports may continue to plunge but that more investment by the government and more spending after the dip in consumer prices could boost domestic demand and offset the negative influence of declining trade.
"I believe that China's recovery will come faster than other major economies. But it seems the comeback won't be easy," Sun said yesterday.
China's consumer prices and producer prices both declined in April, giving more room for the country to implement what it calls a "moderately loose" monetary policy.
The reduction in prices and increase in fixed-asset investment may boost both retail sales and industrial output in the coming months, analysts said.
Wang Qing, an economist at Morgan Stanley, said the April data in general suggested that China's economy was finding its way along the recovery track.
"We expect monetary policy to remain adequately loose and supportive of growth until a true recovery is under way, which may materialize by mid-2009," Wang said.
Among the retail sales breakdowns, vehicle sales rose 18.5 percent year on year last month, the highest rate of growth among all consumer products.
Sales of construction and interior decoration materials increased 10.8 percent, and grain and edible oil sales were up 4.8 percent.
Telecommunications equipment sales fell 8.4 percent in April.
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