Home >News >World >China’s recovery picks up speed on rebound in retail sales
Employees work on a drilling machine production line at a factory in Zhangjiakou, Hebei province, China November 14, 2018. REUTERS/Stringer (REUTERS)
Employees work on a drilling machine production line at a factory in Zhangjiakou, Hebei province, China November 14, 2018. REUTERS/Stringer (REUTERS)

China’s recovery picks up speed on rebound in retail sales

Retail sales gained 0.5% in August from a year earlier, while industrial production rose 5.6% in the period, the National Bureau of Statistics said Tuesday

China’s economic recovery sped up in August, led by the first growth in retail sales data since Covid-19 hit early in the year and an acceleration in industrial output.

  • Retail sales gained 0.5% in August from a year earlier, while industrial production rose 5.6% in the period, the National Bureau of Statistics said Tuesday.
  • In the first eight months of the year, retail sales fell 8.6% and industrial production increased 0.4%, the first time it’s risen this year. Fixed-asset investment shrank 0.3%.

Key Insights

  • China’s economy has recovered from the Covid-19 slump early in the year, with industrial output rebounding due to fiscal stimulus and surprisingly strong exports. Pandemic rules compounded by job and income losses have curbed spending on entertainment and travel for most of this year.
  • Consumption started to recover in August as China’s new Covid-19 cases dwindled toward double figures a day, with retail sales of goods rising 1.5% from a year earlier, while spending on catering and restaurants shrank at a slower pace.
  • “If China continues to control the virus as it did in the past few months, it will mean a stable domestic environment for a steady recovery for the rest of this year," said Betty Wang, senior economist at Australia & New Zealand Banking Group Ltd. in Hong Kong.
  • The government has recently unveiled a new strategic plan which aims to boost domestic consumption and also make more critical technology at home amid rising geopolitical tensions and the possibility of a resurgence in the coronavirus.
  • “China’s economy has recovered steadily in August" as production and economic activities increase, the National Bureau of Statistics said in a statement. “There’s still a pressing need to stabilize jobs, businesses and people’s livelihood and we need to strengthen the basis for a continued economic rebound."
  • The gradual loosening of restrictions on services like movies may also provide a boost to consumer spending. China allowed theaters in areas with low virus risk to resume operations from July 20, though with limits. Morgan Stanley estimates that China’s box office revenue will normalize in the fourth quarter.
  • This data “reduced the need for interest rate and RRR cuts. For now, the PBOC will focus on managing liquidity in order to keep short-term interest rates anchored at the policy rates," said Michelle Lam, Greater China economist at Societe Generale SA. The central bank added liquidity to financial markets earlier Tuesday while keeping the interest rate the same, to help banks facing a cash squeeze this month.

Get More

  • The surveyed unemployment rate declined to 5.6%.
  • The housing market has continued to boom, despite the government further tightening property policies. Home-price growth accelerated in August after a brief slowdown the previous month, indicating the curbs have done little to damp buyer enthusiasm. Funding for property rose 3% in the first eight months.
  • Investment by state-owned firms slowed to 3.2% growth over the same period, while spending by private firms shrank 2.8%, the best result all year.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Click here to read the Mint ePapermint is now on Telegram. Join mint channel in your Telegram and stay updated

Close
×
My Reads Redeem a Gift Card Logout