China published a slew of macro-economic data on Wednesday, most of which came in below street expectations as the US-China trade conflict continues to weigh on growth in the world’s second-largest economy.
Beginning with industrial output, growth slowed to 5.4 percent in April from the same time last year and way below March’s output figures of 8.5 percent. Chinese exports disappointed in April on the back of weaker global demand and the impact of US tariffs on Chinese goods, with the outlook expected to remain sluggish going forward after the US raised tariffs late last week.
The monthly retail sales numbers too shrunk in April; from 8.7 percent in March to 7.2 percent, growing at the slowest pace in almost 16-years as rising concerns of economic slowdown drove consumers to cut down on spending.
Likewise, investments in fixed assets also contracted to 6.1 percent in the four months to the end of April, tapering down from 6.3 percent in the first quarter. Private funding which accounts for around 60 percent of the country’s total fixed asset investments slipped 5.5 percent in the first four months of this year, slowing down from 6.4 percent in the first quarter.
Bucking the trend was the real-estate sector where investments expanded 11.9 percent from January-April from 11.8 percent in the first quarter. Sales by floor area also recorded a narrower drop from a 0.9 percent in the January- March quarter to 0.3 in the first four months. With interest rates falling and banks ramping up lending amid loosening restrictions by local Governments, the key macro-economic indicator is showing signs of resilience in an otherwise stagnant economy.
Analysts expect the US tariff hike to shave off 50 basis points from China’s GDP, push exports lower by close to 3.0 percent, and cause more than 2 million people to lose their jobs. In addition, economists anticipate further easing by the Central Bank, cut in the ratio of reserve requirements by banks and provide subsidies to consumers to boost sales.