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CHINA-ECONOMY
China’s economy shows further weakness as retail sales struggle
BEIJING, May 15, 2019 (BSS/AFP) – China’s economy showed further signs of
weakness in April as the slowest growth in retail sales for 16 years
highlighted the task leaders have in ramping up domestic demand at the same
time as fighting a painful trade war with the US.
Authorities have for years been attempting to transition the world’s
number two economy from being reliant on state investment and exports to a
more stable one driven by China’s huge army of consumers, with the tariffs
stand-off reinforcing the need for such a change.
But the latest figures on Wednesday show retail sales expanded 7.2 percent
last month, well off the 8.4 percent tipped by economists in a Bloomberg News
survey and a big drop from March.
The figures from the National Bureau of Statistics (NBS) represent the
worse pace since 2003, at the height of the SARS crisis.
The bureau also said growth in industrial production slowed sharply to 5.4
percent from, while fixed asset investment in the four months to April rose
6.1 percent. Both missed Bloomberg estimates.
The readings fanned speculation that authorities will unveil another round
of pump-priming measures — having wound back on such stimulus in recent
weeks following signs of a bounce in the economy — with Shanghai’s composite
index jumping more than one percent Wednesday.
Beijing has rolled out huge tax-cuts and other measures this year to ramp
up the economy and offset the impact of a trade war that has seen the US
impose tariffs on hundreds of billions of dollars worth of Chinese goods,
causing worries for exporters.
However, while leaders will want to prevent the economy from taking a bad
hit, Julian Evans-Pritchard of Capital Economics was sceptical about how much
they will do.
“With the scale of stimulus likely to remain smaller than in previous
downturns, we don’t anticipate a strong recovery,” he said.
On a brighter note, Betty Wang, an economist at ANZ bank, said in a
research note that property investment had picked up over the first four
months of the year thanks to “a big jump in developers’ funding conditions”,
with bank loans, down payments and mortgages all growing at a quicker pace.
BSS/AFP/HR/1155