China's latest economic report card was a little disappointing

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  • China just released a raft of major economic data for April, and most of it was pretty soft. At least for Chinese standards.
  • Annual growth in retail sales and urban fixed asset investment fell to multi-year lows, but industrial output bucked the trend.
  • Unemployment fell to 4.9%, down 0.2 percentage points from a month earlier.

China just released a raft of economic data for April, and with the exception of industrial output, it was a little soft.

At least, it was by Chinese standards.

According to China’s National Bureau of Statistics (NBS), retail sales and urban fixed asset investment both undershot expectations by some margin, falling to fresh multi-year and multi-decade lows respectively on an annualised basis.

From a year earlier, retail sales grew by 9.4%, down from 10.1% in the year to March and expectations for a smaller deceleration to 10%.

It was the equal-weakest annual growth rate since early 2004.

The NBS said annual growth in urban areas stood at 9.2%, below the 10.6% level in rural areas.

While total sales growth slowed over the year, online turnover continued to impress with sales of goods and services lifting 31.2% and 36.2% respectively over the same period.

Investment in fixed assets were also underwhelming, growing 7% between January to April compared to the same period a year earlier.

That was down from the annualised growth rate reported between January and March and below the 7.4% level expected by economists.

Not since late 1999 has investment grown at a slower pace.

The investment in primary industries grew by 16.8% over the year, well above the 2.5% level reported for secondary industries. However, while China’s investment in the nation’s industrial sector is slowing quickly, that in the tertiary sector, including services, remains firm, lifting 9.3% from a year earlier.

Of note for those who watch commodity markets closely, total investment in real estate development grew by 10.3% year-on-year.

The NBS said investment by the private sector, accounting for around 60% of total investment, grew 8.4% year-to-date, year-on-year.

While the headline retail sales and investment figures missed, and despite soft growth in new investment in secondary industries, industrial output managed to buck the broader trend, lifting 7% from a year earlier, above the 6.3% level expected.

Industrial output grew by 6% in the 12 months to March.

“The value added of mining industry was down by 0.2% year-on-year, manufacturing up by 7.4% and production and supply of electricity, heat, gas and water up by 8.8%,” the NBS said.

Like the industrial output figure, unemployment also improved, dropping to 4.9% in April, down from 5.1% in March.

In an overall sense, the NBS described the broader economic performance in April as “stable”.

“The national economy registered a steady and sound performance and showed a good momentum for growth, featuring stable production and demand growth, steady employment and price, optimised and upgraded economic structure and sustained improvement of quality and performance,” it said.

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