Development resilience consolidates steady recovery of Chinese economy
The Chinese economy continued sound recovery momentum in May, driven by its development resilience, with major indicators sending encouraging signs across the board.
The country saw steady industrial growth, buoyant retail sales expansion, a booming service industry, and a continuous decrease in urban unemployment, among others, during the period, according to data from the National Bureau of Statistics (NBS) on Wednesday.
Value-added industrial output measuring factory activities went up by 8.8 percent year on year in May as production demand continued to recover. The figure was up by 13.6 percent from the level in 2019, bringing the average growth for the past two years to 6.6 percent.
The manufacturing sector reported robust recovery this year, with the two-year average investment growth rate at 0.6 percent in the first five months, reversing the contraction trend in the January-April period, according to the NBS.
In May, the purchasing managers’ index for China’s manufacturing sector came in at 51, remaining in the expansion zone for the 15th consecutive month, previous NBS data showed.
China’s high-tech manufacturing sector is gaining steam on the backdrop of the country’s innovation-driven strategy, said NBS spokesperson Fu Linghui. Last month, the sector’s output expanded by 17.5 percent, with an average two-year growth of 13.1 percent.
The country has a sound industrial foundation and an integrated industrial system for long-term development, said Fu, adding that the dividend of its population size is transforming into advantages in intellectual capital.
Retail sales of consumer goods maintained stable expansion in May, up by 12.4 percent year on year and reporting a 0.81-percent monthly increase. Retail sales also logged a two-year average growth of 4.5 percent, said the NBS.
Online consumption remained a bright spot, with online retail sales rising by 24.7 percent year on year in the January-May period, registering an average two-year growth of 14.2 percent.
China’s service industry also gained stronger vitality last month. The service production index logged a 6.6-percent average two-year growth, 0.4 percentage points faster than April. The index measuring the business activity of services related to long-distance travel exceeded 65 percent, and those for sectors such as catering and entertainment were over 58 percent.
During the May Day holiday, the number of domestic tourists exceeded that before the COVID-19 outbreak, generating revenue over 70 percent of the pre-epidemic level, NBS data showed.
Fu noted that the future recovery of consumption has a solid foundation, stressing employment expansion and residents’ income increase, sound epidemic prevention and control efforts in the country, and the implementation of a series of consumption promotion policies.
China’s surveyed urban unemployment rate stood at 5 percent in May, 0.9 percentage points lower than the same period last year. Compared with the April level, the May figure was 0.1 percentage point lower, said the NBS.
Wednesday’s data also showed China’s fixed-asset investment went up by 15.4 percent year on year in the first five months. On a month-on-month basis, the investment rose 0.17 percent in May.
In general, China’s economy continued the trend of steady rise, with the speed of economic recovery in line with expectations, said Wen Bin, a chief analyst at China Minsheng Bank.
While the economic data in May pointed to the continued recovery of China’s economy, Fu cautioned that there are still uncertainties, including the different levels of recovery among economies in the world, rapid price hikes of international commodities, and unbalanced recovery domestically.
The country will continue epidemic prevention and control measures, implement macro policies scientifically and effectively, and further deepen opening-up to consolidate the foundation for economic recovery and keep the economy operating within a proper range, Fu said.