New energy vehicles, including hybrid and battery-powered cars, have seen sales rise in China despite a slump in the overall auto market. Pictured here is an unnamed new energy vehicle factory in Jiangsu Province on June 13, 2022.
Wan Shanchao | Visual China Group | Getty Images
BEIJING — China has released economic data for May that beat muted expectations for a month hampered by Covid controls.
Industrial production rose slightly by 0.7% in May from a year ago, against a projected decline of 0.7%, according to analysts polled by Reuters. In April, industrial production unexpectedly fell by 2.9% year-on-year.
Retail sales fell less than expected, down 6.7% in May from a year ago. Retail sales were estimated to have fallen 7.1% in May from a year ago, according to the Reuters survey. In April, retail sales fell 11.1% from a year ago.
Fixed asset investment for the period from January to May grew 6.2%, exceeding expectations of 6% growth.
China’s National Bureau of Statistics said in a statement that the economy “displayed good momentum of recovery” in May, “gradually overcoming the negative effects of the Covid-19 pandemic and key indicators improving marginally”.
“However, we must be aware that the international environment will become even more complicated and grim, and that the domestic economy continues to face difficulties and challenges for recovery,” the agency said.
China’s exports accelerated in May to a better-than-expected increase of 16.9% year-on-year in US dollars. Imports also rose by a more than expected 4.1%.
Shanghai and Beijing, China’s two largest cities by gross domestic product, have both had to reintroduce stricter Covid controls this month after continued spikes in Covid cases.
Shanghai was closed in April and May and only a few large companies were active. The city began to fully reopen on June 1.
For about a month in May, Beijing had told people in its largest business district to work from home, while restaurants in the capital could only operate on a takeout or delivery basis. Most Beijing restaurants were allowed to dine in-store again in early June and workers were able to return to work, but schools have postponed the resumption of personal classes.
Uncertainty, especially about future earnings, has weighed on consumer spending. The unemployment rate in China’s 31 largest cities surpassed its 2020 peak, reaching 6.7% in April – the highest ever recorded since 2018. That figure rose further in May to 6.9%, while the overall urban unemployment rate tapped lower. up to 5.9%.
Unemployment among young people aged 16 to 24 rose further in May to 18.4%, from 18.2% in April.
“I think as restrictions are eased and we get monetary policy support going forward, the unemployment rate should drop a little bit as we are well above government target,” Francoise Huang, senior economist at Allianz Trade, said in a phone call. conversation last week.
“Right now my scenario is that we should see some recovery in the second half of the year,” she said. “It’s not [a] V-shaped recovery, fast and strong recovery, or post-Covid recovery as we had seen in 2020, because policy easing isn’t as strong and external demand isn’t as strong.”