Retail sales, investments and industrial production fall more than expected. The Central Bank of China lowers the level of reserves for banks. US president’s claims branded as “false”.
Beijing (AsiaNews) – In April, China’s major economic indicators show a weakening of the system. Official data published yesterday by the National Statistics Bureau shows a significant collapse.
Growth in retail sales – which includes government, business and household expenses – fell to 7.2%, the lowest since May 2003. The figure is even lower than analysts’ forecasts, which stopped at an 8.6%.
Fixed investments – a key component of domestic demand, which also includes infrastructures – have fallen to 6.1%. In the first quarter of 2019 they were at 6.3%. Analysts predicted a value of 6.4%.
Industrial production (value added) – which measures production in factories, mines and services – grew by 5.4% compared to April last year; last month the value was 8.5%.
Nomura economists, cited by Caixin, say that the data “show that growth has not yet hit bottom”, but that the government is expected to intervene to stabilize the country’s economic growth, perhaps with more stimulus packages. Yesterday, the Chinese central bank cut the level of reserves for banks. This will allow the release of at least 280 billion yuan onto the market, especially to help small and medium-sized enterprises.
Despite the data, weaker than expected, the statistics office spokesman said that “the Chinese economy is becoming more and more resistant to risks”. According to scholars, the data show that tensions with the United States are putting a strain on China.
Two days ago, US President Donald Trump, referencing the ongoing war between China and the US, tweeted: China will be pumping money into their system and probably reducing interest rates, as always, in order to make up for the business they are, and will be, losing.” Trump also pointed out that to guarantee access to the US market, many manufacturing companies are moving from China “to be more competitive for US buyers”.
Yesterday, the spokesperson of the Chinese Foreign Ministry, Geng Shuang, branded Trump’s statements as “false information” and reiterated that Beijing has “full confidence” in its economy.