BOFIT Viikkokatsaus / BOFIT Weekly 2019/12

The National Bureau of Statistics reports industrial output growth slowed to 5.3 % y-o-y in the first two months of 2019 (over 7 % in the same period in 2018).

Retail sales rose by 7.1 % y-o-y in real terms during January-February. Although growth in online sales slowed, the value of goods and services sold online rose by 14 % y-o-y (37 % y-o-y in January-February 2018). Car sales, which represent about 10 % of retail sales, continued to contract as part of a trend that began last year. Apartment sales also slowed. Measured in terms of liveable floorspace, apartment sales in January-February declined by 4 % y-o-y.

The unemployment rate rose from 5.1 % in January to 5.3 % in February (4.9 % in December). The shift is significant by Chinese standards; since January 2017, the official survey-based urban unemployment rate has held solidly in the 4.8–5.4 % range.

Growth in the stock of bank lending continued to rise in January and February at 13 % y-o-y. Local governments accelerated their borrowing plans this year. In the January-February period, local government issued bonds worth 782 billion yuan (117 billion dollars).

Real growth in fixed asset investment (FAI) for January-February was estimated at about 2–3 %. Growth in infrastructure investment slowed significantly from the first two months of 2018. This slowdown was also apparent in construction. The NBS reports that new building starts rose by 3 % y-o-y in January-February, the lowest pace of growth since the series was first released in 2004. Chinese investment figures should be taken with a large grain of salt, however, as many series published at the moment only indicate nominal cumulative (year-to-date) growth. Yuan-denominated series have been discontinued. The FAI figures are also odds with China’s national accounts figures.