Data shows patchy Chinese economy in first two months of the year

Data shows patchy Chinese economy in first two months of the year

China's economy charted an uneven trajectory in the first two months of the year, a slew of key indicators showed Monday
China's economy charted an uneven trajectory in the first two months of the year, a slew of key indicators showed Monday. Photo: HECTOR RETAMAL / AFP
Source: AFP

China's economy charted an uneven trajectory in the first two months of the year, a slew of key indicators showed Monday, muddying Beijing's drive to boost flagging consumption.

Officials have looked in recent months to revive confidence in the world's second-largest economy, which has been beset by persistent property sector woes and is now under increasing pressure from fresh trade tensions with the United States.

Data from Beijing's National Bureau of Statistics (NBS) on Monday offered some positive signs, showing retail sales -- a key measure of consumer sentiment -- increased four percent year-on-year during January and February combined.

However, data also showed that unemployment rose, while housing prices continued to fall in most major cities.

"In the first two months, with the sustained effects of macro policies, the national economy maintained the new and positive development," the NBS said in a statement.

But, it warned, "domestic effective demand is weak, (and) some enterprises face difficulties in production and operation".

Read also

UK economy unexpectedly shrinks in January in blow to govt

"The foundation for sustained economic recovery and growth is not strong enough," it said.

The surveyed urban unemployment rate -- China's main metric for measuring how many are out of work -- rose to 5.4 percent in February, the NBS said, up 0.2 percentage points from the previous month.

That was above the 5.1 percent forecast by Bloomberg and was the highest recorded in two years.

And, in a worrying sign for the property sector, an NBS price index for new commercial homes decreased year-on-year in 68 of 70 large and medium cities during February.

'Mixed messages'

China's statistics authorities combine many economic indicators for the first two months of the year to account for potential distortions caused by the annual Lunar New Year holiday.

Industrial production in January and February also rose 5.9 percent year-on-year, data showed, slowing from the 6.2 percent growth in December.

Read also

S.Africa revised budget gets booed despite smaller tax hike

Beijing said this month it is targeting total growth this year of five percent -- the same as last year and a goal considered ambitious by many economists.

Faced with an intensified trade war under US President Donald Trump, Chinese officials are now under pressure to boost domestic consumption to reduce the economy’s traditional reliance on exports.

Since taking office in January, Trump has slapped tariffs amounting to a 20 percent hike on Chinese overseas shipments, which last year reached record levels.

"The international environment will become more complex and severe in the next stage," NBS spokesman Fu Linghui told a news conference after Monday's data release.

"But the general trend of international cooperation and common wins will not change," Fu said.

The government released an action plan on Sunday it hopes can overcome low consumer demand, including measures such as property reform and childcare subsidies.

"The macro data released today show mixed messages," said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management.

Read also

US consumer inflation cools slightly as tariff worries flare

Activity data on industrial production and retail sales showed "consistent signals and beat expectations", he wrote, although the rise in unemployment to its highest level in two years was "unexpected".

"Unemployment is often a lagging indicator, hence it may improve if more proactive fiscal policy helps to keep the activity buoyant in coming months," Zhang said.

"The risk to the economy is the damage from higher US tariffs on China's exports which will likely show up in the trade data over the next few months."

PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ find the “Recommended for you” block on the home page and enjoy!

Source: AFP

Authors:
AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.