April’s economic numbers confirm China’s ongoing slowdown

BOFIT Viikkokatsaus / BOFIT Weekly Review 2016/20

After slight improvements in key economic indicators in March, April’s figures were weaker than most observers had expected. Growth in industrial output last month slowed to 6 % y-o-y and retail sales were up about 9 %. Growth in fixed investment slowed a bit, but differences across sectors were huge. For January-April, public sector investment was up 24 % y-o-y, while growth in private sector investment remained at 5 % y-o-y.

Chinese exports in January-April were down 8 % y-o-y in dollar terms. The drop moderated last month, however, to an on-year fall of just a couple per cent. The value of imports was down again last month by over 10 %, a trend that has persisted all year. The drop largely reflects low commodity prices ¬– import volumes of many important commodities actually increased. In January-April, import volumes were up 19 % for crude oil, 29 % for copper and 8 % for iron ore.

China’s financial markets have been relatively calm since February and capital outflows from the country have been modest. As in recent months, the value of China’s currency reserves hovered around $3.2 trillion. Current government challenges include a worsening debt problems and partial overheating in the housing market. The general fall in housing prices in many cities ended a year ago and prices today are soaring in many large cities. SouFun’s survey of 99 major cities shows that the average apartment sale price in April was up 9 % y-o-y. Price trends ranged widely across cities.

Show weekly Review 2016/19 Show weekly Review 2016/21