15.7 C
Los Angeles
Monday, March 20, 2023
- Advertisement -

Disappointing start to China’s post-Covid year

WorldAsiaDisappointing start to China's post-Covid year
- Advertisement -
- Advertisement -
- Advertisement -
- Advertisement -

Costco’s third store in mainland China begins trial operations on March 10, 2023 in Shanghai’s Pudong district.

China News Service | China News Service | Getty Images

BEIJING – China on Wednesday reported retail sales growth for the first two months of the year that only matched expectations, while real estate investment fell further.

- Advertisement -

Industrial production rose 2.4% for the January-February period, below the 2.6% expected by a Reuters poll.

“The data is stagnant rather than accelerating, which also indicates that stronger policy support is needed to unleash the growth potential,” said Zhou Hao at Guotai Junyan.

Retail sales increased by 3.5%, in line with expectations. Retail sales increased in most categories, but sales of big-ticket items such as autos and home appliances saw declines. Online retail sales of physical goods grew 5.3% in the first two months of the year compared to a year earlier.

Fixed asset investment grew by 5.5%, above expectations for a 4.4% increase.

But within that category, investment in real estate fell 5.7% in January and February from a year earlier. This follows a 10% drop in real estate investment for the previous year. Infrastructure and manufacturing investment grew at a slower pace in the first two months of the year than in 2022.

“There aren’t too many bright spots in today’s data,” said Bruce Pang, chief economist and head of research for Greater China at JLL.

However, he pointed out that there was little change in retail sales from January to February based on official data. He said the latest spurt in investment growth was surprising as it had picked up significantly in the beginning of last year itself.

Pang expects the real estate market to recover later this year, especially since March traditionally marks the peak of housing supply for the year, he said.

youth unemployment remains high

The statistics bureau said unemployment in cities reached 5.6% in February, up 0.1 percentage points from January. The data shows that the unemployment rate for youth aged 16 to 24 remains consistently high at 18.1 per cent.

“Due to the impact of the epidemic, China’s economic growth has averaged 4.5% over the past three years, and the pressure on employment is enormous,” said Fu Linghui, spokesman for the Bureau of Statistics and director of its Comprehensive Statistics Department. National economy.

Total number of jobs posted on major recruitment platforms in China for the first two months of the year fell 23% compared to the same period in 2022, According to Beijing-based BigOne Lab, an alternative data company whose backers include S&P Global.

The data showed a slight increase in postings after the Lunar New Year holiday.

BYD The data showed that the largest recruiters were companies with more than 10,000 employees. BigOne Labs found that the Chinese electric car maker recruited more than 400% in January compared to the previous month, mostly for positions in manufacturing and sales.

Read more about China from CNBC Pro

Wednesday’s official data released figures for January and February combined – as is the custom of the Chinese Bureau of Statistics – to avoid distortions from the Lunar New Year. The holiday, the biggest of the year in China, marks a travel period of more than a month and can fall in any month depending on the year.

The figures mark the first full months since China eased its stringent COVID controls in early December.

Preliminary data and anecdotal evidence indicate that tourism and restaurant dining have resumed, but Overall consumer spending remains sluggish. business surveys meanwhile point to a Boom in manufacturing activity.

“The external environment is even more complex, insufficient demand remains prominent and the foundation for economic reform is not yet solid,” China’s National Bureau of Statistics said in a release.

The bureau called for boosting market confidence and achieving an “appropriate increase in volume”.

China’s development goal

Chinese officials this month announced a growth target of around 5%, which New Prime Minister Li Qiang warned it will not be easy for the country To get.

Asked about the GDP target on Wednesday, Fu said if growth was too slow, it could expose problems in China’s economy, raising risks.

But setting too high a target will not be beneficial to realizing “high-quality development”, Fu said, using Beijing’s phrase to describe a Move away from focusing only on fast growth,

global economic concerns

Exports, a key driver of China’s economy, have slowed sharply. Demand in major trading partners such as the US has fallen as those economies face rising inflation and slowing growth.

Fu reiterated on Wednesday that price increases in China have been relatively low, and the country could achieve its target of around 3% inflation this year.

Analysts have said that China’s sluggish inflation reflects a slowdown in domestic demand.

Fu also spoke candidly about the pressure on China’s economy from the global environment without naming specific countries.

“With high inflation, some economies may continue to tighten monetary policy, which will further constrain global growth,” Fu said, according to a CNBC translation of Chinese remarks.

“At the same time, in the international environment, geopolitics, unilateralism and protectionism are on the rise, and their pressure on global economic development will gradually become apparent.”

Source link

- Advertisement -

Amazon to lay off 9,000 more workers in addition to earlier cuts

The latest round will primarily affect Amazon's cloud computing, human resources, advertising and Twitch livestreaming businesses, Jassy said...

Samsung Galaxy M01 Core vs Redmi A1 vs Realme C30: Best phones under ₹6000 | Number

If you are looking for an entry-level smartphone with very basic configuration and affordable prices,...
- Advertisement -

Follow us

- Advertisement -
— Advertisement —
— Advertisement —

Most Popular Articles

— Advertisement —