New energy vehicles, which include hybrid and battery-powered cars, have seen increased sales in China despite a slump in the overall auto market. Pictured is an unnamed new energy vehicle factory in Jiangsu province on June 13, 2022.
wan shanchao | Visual Group China | Getty Images
BEIJING — China released economic data for May that beat subdued expectations for a month hampered by Covid controls.
Industrial production edged up 0.7% in May from a year ago, against an expected decline of 0.7%, according to analysts polled by Reuters. In April, industrial production fell unexpectedly, by 2.9% year on year.
Retail sales fell less than expected, down 6.7% in May from a year ago. Retail sales are estimated to have fallen 7.1% in May from a year ago, according to the Reuters poll. In April, retail sales fell 11.1% from a year ago.
Investments in fixed assets for the January-May period rose 6.2%, beating expectations for growth of 6%.
China’s National Bureau of Statistics said in a statement that the economy “showed good recovery momentum” in May, “with the negative effects of the Covid-19 pandemic gradually being overcome and leading indicators improving slightly.” .
“However, we should be aware that the international environment is going to be even more complicated and bleak, and the domestic economy still faces difficulties and challenges for recovery,” the office said.
Chinese exports accelerated in May to a better-than-expected 16.9% increase from a year ago in US dollars. Imports also increased by 4.1%, more than expected.
Shanghai and Beijing, China’s two largest cities by gross domestic product, both had to reinstate tighter Covid controls this month after persistent spikes in Covid cases.
Shanghai had closed in April and May, with only a few large companies operating. The city began to fully reopen on June 1.
For about a month in May, Beijing had told people in its biggest business district to work from home, while restaurants in the capital could only operate on a takeout or delivery basis. Most restaurants in Beijing were allowed to resume in-store dining in early June and employees were able to return to work, but schools delayed the resumption of in-person classes.
Uncertainty, particularly about future income, weighed on consumer spending. The unemployment rate in China’s 31 largest cities surpassed 2020 highs to hit 6.7% in April – the highest on record since 2018. That rate rose further in May to 6.9% , while the overall unemployment rate in cities fell to 5.9%.
The unemployment rate for young people aged 16 to 24 increased further to 18.4% in May, from 18.2% in April.
“I think with the restrictions eased and we get monetary policy support, the unemployment rate should come down a bit given that we are well above the government target,” said Françoise Huang. , senior economist at Allianz Trade, in a phone. interview last week.
“My scenario at the moment is that we should see some recovery in the second half,” she said. “It’s not [a] V-shaped rebound, fast and strong rebound, or post-Covid recovery as we saw in 2020, because policy easing is not so strong and external demand is not so strong.”