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Summary
- China’s retail sales growth has slowed down to 17.7%.
- Industrial production of China grew 9.8%, in line with the market expectation
- Unemployment rate in the country’s urban centre fell by 20 bps.
The world’s second largest economy, China, seems to be grappling with a sluggish economic recovery as consumer spending grew far lesser than expected.
According to the data released by the National Bureau of Statistics, the retail sales in the country grew by 17.7% in the month of April, far lesser than 25% growth that markets were discounting far.
On the sequential basis, the retail sales in the country have slowed down miserably, almost halving from 34.2% year-on-year growth in March.
About 1.4 billion Chinese seem to have cut down on eating out, as catering services grew by only 46.4% in April, compared with 91.6% in the month of March. Economists use restaurant sales as an indicator of impending slowdown, as according to them, in the wake of a slowing economy, people first start cutting down on eating out and vice versa. In case of China, catering services include restaurant sales as well.
The online sales growth has remained constant. For first four months of 2021, the online sales grew 23.1% as the national statistical agency did not release monthly data on e-tailing. In the first four months of 2020, when China was the epicentre of deadly COVID-19 pandemic, e-tailing had grown by 25.8%.
The Statistics Bureau in its release said that the foundation for the economic recovery is not yet strong.
Even as the unemployment rate in the world’s most populous country fell by 20 basis points, yet the joblessness seems to be pinching the younger population of the country. The urban unemployment rate in the country marginally dipped to 5.1% in April, compared with 5.3% in the month of March. On the other hand, the unemployment rate for people aged between 16 and 24 continued to remain in the double-digit figures – at 13.6%.
The improvement in the unemployment may have come with truncated salaries for the people as the average number of hours worked a week declined to 46.4 hours in April, from 46.9 hours in March.
Industrial output in the country, meanwhile, rose by 9.8% in April – much in line with the market expectations.
Despite disappointment of markets, the Chinese shares continued to rally on Monday after opening in green. The Shanghai Composite Index was up 1.02%, while the SZSE Component was up 2.19%.
It is pertinent to note that, despite reporting the index case of COVID-19 pandemic and being the country of origin for it, China was the only major economy that didn’t face recession in 2020.
