Is China's Economic Recovery Stalling?... Both Production and Consumption Sluggish in April

China's production, consumption, and investment indicators all slowed in April.

AFP Yonhap News

According to China's National Bureau of Statistics on May 18, China's industrial production in April increased by 4.1% year-on-year. This marks a significant slowdown from the 5.7% growth rate recorded in March and is the lowest since July 2023. Retail sales were also sluggish, rising by only 0.2%. Fixed asset investment for January to April this year decreased by 1.6% compared to the same period last year.

Bloomberg News reported that the sluggish retail sales figure is the lowest since December 2022, when a large-scale COVID-19 outbreak occurred after China lifted its pandemic controls. Bloomberg also noted that none of the economists it surveyed anticipated such weak results for industrial production, retail sales, and investment indicators.

Inflationary pressures have also increased. The Consumer Price Index (CPI) rose by 1.2% year-on-year, while the Producer Price Index (PPI) climbed by 2.8%, marking the highest level in 45 months.

The surveyed urban unemployment rate in April was 5.2%, down by 0.2 percentage points from the previous month.

Charu Chanana, Chief Investment Strategist at Saxo Markets, told Bloomberg News, "China's economy remains polarized, with strategic manufacturing and exports remaining strong, but domestic sectors such as consumption and real estate—where household confidence is key—remaining vulnerable." She added, "The issue is not only that the economic activity indicators fell short of expectations, but also that the overall weakness is spreading throughout the domestic economy."

Zhang Zhiwei, Chief Economist at Pinpoint Asset Management, explained, "Economic activity in April was weaker than market expectations. While the robust export sector helped partially offset weak domestic demand, it was not sufficient to fully compensate for it."

The National Bureau of Statistics of China stated in a release that "China's economy continued to improve amid stability." However, it also noted, "The external environment remains complex and volatile. While supply is strong, the problem of weak demand persists. Some companies are still experiencing operational difficulties."

This content was produced with the assistance of AI translation services.