On June 8, 2024, a worker welded steel in a workshop in Hangzhou, Zhejiang Province, China.
VCG | Visual China Group | Getty Images
China’s retail sales in May exceeded expectations, rising 3.7% year-on-year, exceeding expectations of a 3% growth rate in a Reuters poll of economists.
However, other economic indicators such as industrial output and fixed asset investment fell short of Reuters expectations.
Industrial output increased by 5.6% year-on-year, lower than the 6% expected; fixed asset investment increased by 4% from May last year, slightly lower than the 4.2% predicted by a Reuters survey.
The National Bureau of Statistics of China detailed that the total retail sales of consumer goods reached 3.92 trillion yuan (US$540.32 billion), of which sales in urban areas increased by 3.7% compared with the same period last year, and sales in rural areas increased by 4.1%.
On the other hand, the sharp decline in real estate investment dragged down the decline in fixed asset investment. The National Bureau of Statistics said that after excluding real estate investment, fixed asset investment in the whole society increased by 8.6% compared with May last year.
In addition, the urban unemployment rate remained stable at 5% in May, the same as in April and 0.2 percentage points lower than in May last year.
China’s exports remained strong in May, rising 7.6% year-on-year in U.S. dollar terms, exceeding Reuters’ forecast of 6%. However, imports grew by 1.8% during the same period, lower than expected.
Loan data released on Friday showed continued sluggish demand. Data from Wind Information showed that RMB loan balances increased by 9.3% year-on-year in May, the lowest growth on record since 1978.
Data from Wind Information shows that M1 money supply (including circulating cash and demand deposits) decreased by 4.2% year-on-year in May, the largest record since 1986.
Goldman Sachs analysts pointed out that state media affiliated with China’s central bank attributed the slowdown in M1 growth to a crackdown on fake loans and outflows related to wealth management products.
Previous inflation data for May showed that consumer prices excluding food and energy rose 0.6% from the same period last year.
