China’s industrial output grew 6.7% year-on-year in April, showing a significant acceleration from the 4.5% pace seen in March. This surge in industrial production indicates a robust recovery in the manufacturing sector, according to official data released by the National Bureau of Statistics (NBS) on Friday. The growth exceeded expectations, with analysts predicting a 5.5% increase in a Reuters poll.
However, while industrial output saw a strong uptick, retail sales, a key indicator of consumption, only rose by 2.3% in April. This growth rate was slower compared to the 3.1% increase recorded in March. Analysts had anticipated a higher growth rate of 3.8% in retail sales for April.
Additionally, fixed asset investment expanded by 4.2% in the first four months of 2024 compared to the same period last year. This growth rate fell short of expectations for a 4.6% rise, indicating a slight slowdown in investment activity.
The mixed economic data released for April also showed that China’s exports and imports rebounded after a contraction in the previous month. Consumer prices continued to rise for the third consecutive month. However, new bank lending in China fell more than expected in April, raising concerns about the need for further policy support to bolster the economy.
Despite these challenges, the Chinese government remains optimistic, setting an ambitious growth target of around 5% for 2024. The economy expanded by a faster-than-expected 5.3% in the first quarter of the year. To stimulate key sectors of the economy, China initiated the issuance of 1 trillion yuan ($138.17 billion) of ultra-long special treasury bonds with tenors ranging from 20 to 50 years.
The property sector, which accounts for a significant portion of the economy, saw a decline in investment. However, efforts to promote home sales, such as lifting home purchase curbs in cities like Hangzhou and Xian, are underway. The government is also considering a plan for local governments to purchase millions of unsold homes to reduce housing inventories and support the property sector.
Overall, the job market showed improvement, with the nationwide survey-based jobless rate remaining at 5.0% in April, down from 5.2% in March. The data reflects a complex economic landscape in China, with both challenges and opportunities for growth in the coming months.