albert Chan
China Economic Expansion Growth Slows in April
On May 15, China’s National Bureau of Statistics reported China’s red-hot economic growth might be cooling based on April figures, following a brief surge in the first quarter of 2019.
- Industrial production in China rose 5.4% in April from last year, slowing from March’s 8.5% year-over-year growth, according to the National Bureau of Statistics. Impacting factors include slower execution of infrastructure projects and the ongoing disruption of automobile production by ride-hailing apps. Overall vehicle production (including passenger vehicles and commercial vehicles) decreased 14.5% year over year in April, compared to a 2.7% year-over-year decline in March.
- The official manufacturing Purchasing Manager’s Index (PMI), a measure of sentiment among factory operators, fell to 50.1 in April from 50.5 in March, almost below the 50.0 expansion threshold. The data was also below the consensus estimate of 50.5 compiled by Bloomberg.
- Fixed-asset investment in non-rural areas, which refers to spending on physical assets such as real estate, infrastructure or machinery, climbed 6.1% in the January-to-April period versus last year, slowing slightly from the 6.3% increase in the first three months in 2019. Impacting factors include slower progress in finishing investments in planned infrastructure projects.
- Retail sales rose 7.2% in April from last year, slowing from an 8.7% year-over-year increase in March. April’s growth rate represented a 16-year low. The data suggest the expansion in consumer spending is slowing.
- China’s exports decreased 2.7% year over year in April, a sharp reversal from a 14.2% year over year increase in March, according to the General Administration of Customs.
- On March 28, 2018, China’s State Council announced a ¥400 billion (around $63.6 billion) tax cut package for 2018, covering a variety of sectors, including manufacturing, transportation, construction, telecommunication and farm produce.
- On April 24, 2018, the State Council said it would make further tax cuts worth over ¥60 billion (around $9.5 billion) to boost the development of micro and small businesses.
- China issued bonds worth ¥757 billion in July and ¥883 billion in August, 2018, mainly for infrastructure construction projects.
- In early March, Premier Li Keqiang announced the government will reduce taxes and fees totaling ¥2 trillion (around $298 billion) in 2019.
- On May 6, 2019 , the People’s Bank of China said it will cut reserve requirement ratios for small and medium-sized banks from 10%-11.5% to 8%, effective May 15. The central bank said the cut will release around ¥280 billion (around$41.23 billion) in long-term funding, which will be used for loans to small and private companies.