China economy stable as reform sustains growth

China's economy enjoyed steady growth in May, largely due to solid industrial output and investment in the manufacturing sector.

China’s economy enjoyed steady growth in May, largely due to solid industrial output and investment in the manufacturing sector.

The industrial output rose 6.8 percent year on year last month, 0.3 percentage points faster than the growth a year ago but 0.2 percentage points slower than a month earlier, data from the National Bureau of Statistics showed yesterday.

For the January-May period, industrial output grew 6.9 percent, flat from that in the first four months of the year.

The fundamentals of industrial production continued to improve and emerging industries were developing rapidly, said Jiang Yuan, industrial statistician at the bureau.

In terms of sectors, 36 of the 41 major sectors in industry maintained the growth momentum. Among them, electronics, pharmaceuticals, special equipment, computers, tobacco and fuel gas all posted double-digit growth.

Output of the equipment manufacturing industry and the high-technology industry advanced 9.4 percent and 12.3 percent, respectively, last month. The two sectors also grew 9.3 percent and 12 percent, respectively, for the January-May period. 

“The robust growth in emerging industries indicates the accelerated transferring of economic momentum with the deepening of the supply-side structural reforms,” said Mao Shengyong, spokesman for the statistics bureau. 

“In services industries, the modern service sector posted stronger development,” Mao added.

Mao also stressed that consumer demand continued to escalate, with investment in manufacturing growing at a faster pace.

The total retail sales of social consumer goods rose 8.5 percent year on year to 3.04 trillion yuan (US$475 billion) in May, 0.9 percentage points slower than April. 

But among them, goods related to consumer upgrading sustained rapid growth. Retail sales of communication equipment, cosmetics and petroleum rose 12.2 percent, 10.3 percent and 14 percent, respectively.

The country’s fixed-asset investment expanded 6.1 percent year on year in the first five months, down from 7 percent for the January-April period.

“The biggest drag on FAI here is infrastructure investment,” said Betty Wang, senior China economist at Australia and New Zealand Banking Group.

But Wang sees it as a relatively easy sector for the government to inject stimulus.

“Local governments are more restrained by the crackdown on debt, but if there is a very large downside risk to the economy, the government is fully capable of propping it up again,” she said.

In May, the job market remained steady, with the surveyed unemployment rate in urban areas at 4.8 percent, down 0.1 percentage points from April and 0.1 percentage points lower than a year earlier. The urban surveyed unemployment rate in 31 major cities was 4.7 percent, unchanged from the previous month.

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