Economy maintains steady growth

China’s economy showed steady growth in April, with a much higher-than-expected industrial output buffering impacts from slower growth in retail sales and fixed-asset investment.

The industrial output rose 7 percent last month from April 2017, and 1 percentage point higher than the rise in March, according to data released yesterday by the National Bureau of Statistics. The growth beat market expectations of around 6.4 percent, and was 0.5 percentage points higher than April 2017.

For the January-April period, industrial output grew 6.9 percent, compared with 6.8 percent in the first quarter.

The improvement last month was led by the utilities sector, whose growth rose 3 percentage points to 8.8 percent year on year. Growth in the manufacturing and mining sectors also rose.

“China’s economy grew generally steadily last month with stronger vitality and greater efficiency,” said Liu Aihua, spokeswoman for the statistics bureau. Despite the positive overall growth, the economy still faces growing external uncertainties and acute problems of unbalanced and inadequate domestic development, Liu said.

Asked about the trade frictions between China and the United States, she said the possible influence on the Chinese economy has not been fully reflected in the short term. 

Fixed-asset investment in the January-April period cooled to grow at the lowest pace since 2000, rising 7 percent year on year — 0.5 percentage points slower than the first quarter.

Liu said the softening in fixed-asset investment was partly due to the rapid growth at nearly 20 percent last year. Also, government measures on stricter regulations for financing also led to the slower growth.

Indicators in the real estate sector largely cooled last month. The growth of funds for property investment, a leading indicator for investment, slowed further by 1 percentage point to 2.1 percent year on year in the first four months, compared with the January-March period.

“The rebound in property investment growth in early 2018 ended, as financial deleveraging, the credit strain from recent credit defaults and widening credit spreads weigh on property developers,” said Nomura’s economist Wendy Chen.

Retail sales growth was also weaker than market expectations, moderating to 9.4 percent year on year in April from 10.1 percent in March. By category, growth in catering and commodity retail slowed to 9.6 percent and 9.4 percent respectively.

“Consumption and investment had provided solid support to the better-than-expected GDP growth in the first quarter. In contrast, April’s soft data may suggest growth momentum to moderate in the second quarter,” said Betty Wang, senior China economist at Australia and New Zealand Banking Group.

In April, the job market remained steady, with the surveyed unemployment rate in urban areas at 4.9 percent, down 0.2 percentage points from March and 0.1 percentage points lower than last April, according to the statistics bureau.

The urban surveyed unemployment rate in 31 major cities was 4.7 percent, down 0.2 percentage points from March and down 0.2 percentage points year on year.

Since last month, the bureau has regularly released the monthly surveyed unemployment rate in urban areas to help the government to improve macro-control and provide information for formulating employment policies.

The surveyed urban unemployment rate was first introduced in 2014 to better reflect the job market and serve as a supplement to the registered urban unemployment rate compiled by the Ministry of Human Resources and Social Security.

Earlier data showed China’s economy grew 6.8 percent year on year in the first three months of this year.