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ECONOMY: The Picture Remains Positive in the Overall
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The Picture Remains Positive in the Overall

By Morgan Brady

BT 201907 ECONOMY 02

中国经济总体而言仍然是积极的

减少中国对美贸易顺差似乎没有按计划进行。5月份,贸易顺差为268.9亿美元,高于4月份的210.1亿美元。尽管特朗普政府宣布对价值2000亿美元的商品征收更高的关税(从10%至25%)

中国的贸易顺差高于预期
在全球范围内,中国的贸易顺差为416.5亿美元,高于许多人预期的205亿美元。

零售额增长
零售销售强于上月,增长了8.6%,而预期为8.1%,而4月为7.2%。消费品零售总额16,133.2亿元。实物商品网上零售额为30,415亿元,比上期增长21.7%,占消费品零售总额的18.9%。

固定资产投资增长
城市固定资产投资同比增长5.6%,预期为6.1%,同比增长6.1%。

生产者价格指数显示出轻微的复苏
2019年5月,制成品生产者价格指数(PPI)同比增长0.6%,环比增长0.2%,而制成品购买者价格指数同比增长0.2%同比并且月环比保持不变。1月至5月平均制成品生产者价格指数较2018年同期上涨0.4%,制成品采购价格指数上涨0.2%。

其他发展
据中国政府称,经济在可接受的范围内进行。这在许多方面都有所体现。
首先,服务业显示增长,特定类型的服务比其他服务增长更多。
第二,超过一定规模的工业企业增加值增长了5%。
三是,高新技术产业投资增长。特别是对高科技制造业和高科技服务业的投资分别同比增长10.2%和15.6%。
其他积极因素包括保持稳定的失业率和该国深化的结构改革。

总之
中国经济仍在增长,尽管某些领域的增长放缓。 零售销售,包括在线销售,正在增长,固定投资也在增加,特别是在高科技服务方面。 面对诸如贸易战加剧等地缘政治冲击,中国经济仍然具有弹性。

BT 201907 ECONOMY 01

The relentless efforts to reduce the Chinese trade surplus with the US do not seem to be going as planned. In May, that trade surplus stood at $26.89 billion, up from $21.01 billion in April. This is despite higher tariffs (up to 25% from 10%) announced by the Trump administration on $200 billion worth of goods.
 

China’s trade surplus higher than expected

BT 201907 ECONOMY 05With the world, China’s trade surplus stood at $41.65 billion, which is higher than $20.5 billion which many had expected. The trade results for the month of May are a cause for optimism following a downbeat April, where imports rose by 4% and exports declined by 2.7%., according to data released by Chinese customs.
 

Industrial output growth slows down

BT 201907 ECONOMY 06Elsewhere, the results were not as bright. Chinese industrial output grew by a meager 5% on a year-on-year basis in May. This is the lowest level on record in 17 years for the index that measures manufacturing, mining, and utilities output. The sharpest declines were seen in automobiles, medical products, and computer equipment. Analysts believe that weaker domestic demand may have been the culprit, although the sectors affected were highly reliant on exports.
 

Earlier optimism regarding a trade deal between the US and China may have contributed to this weakness, as the Chinese government chose to pull back stimulus then. The new data, however, may prompt the government to change its course of action.

BT 201907 ECONOMY 07Local governments in China were recently given the directive to increase bond issuance to fund large infrastructure projects. The downside is that excessive reliance on debt can increase financial risk. The governor of the People’s bank of China also said that there are still many monetary tools in his arsenal to weather a trade-dispute storm.
 

Retail sales grew

BT 201907 ECONOMY 08On a more positive note, retail sales came stronger than last month, as they grew by 8.6% vs. 8.1% expected, compared to 7.2% in April. The total retail sales of consumer goods amounted to 16,133.2 billion yuan. The online retail sales of physical goods stood at 3,041.5 billion yuan, which is 21.7% higher than the previous period, and accounting for 18.9% of the total retail sales of consumer goods.
 

Fixed asset investments recorded growth

BT 201907 ECONOMY 09Urban fixed asset investment year-on-year recorded an increase of 5.6% vs. 6.1% expected and an increase of 6.1% on the month before. In the first five months of the year, the investment in fixed assets (excluding rural households) amounted to 21,755.5 billion yuan, achieving a year-on-year growth of 5.6%. Specifically, private investment reached 13,082.3 billion yuan, up by 5.3%.
 

Producer Price Index shows a slight recovery

BT 201907 ECONOMY 10In May 2019, Producer Price Index (PPI) for manufactured goods saw an increase of 0.6% year-on-year, and an increase of 0.2% month-on-month, whereas the purchaser price index for manufactured goods increased 0.2% year-on-year and remained unchanged month-on-month. The producer price index has been recovering on a month-on-month basis since December last year.

BT 201907 ECONOMY 11On average from January to May, The Producer Price Index for manufactured goods increased 0.4% from that in the same period of 2018, and the purchasing price index for manufactured goods went up by 0.2%.
 

Other developments

According to the Chinese government, the economy performed within an acceptable range. This has been seen on many fronts. First, the services sector showed growth as the index of services production grew by 7.3% on a year-on-year basis, albeit only 1 percentage point than the growth in the first four months. Specific types of services saw more growth than others, such as the information transmission software and information technology services, which grew by 22.2%, and the leasing and business services, which grew by 8.4 on a year-on-year basis.

BT 201907 ECONOMY 12Second, the value added by industrial companies above a certain size grew by 5%. This is despite the general slowdown in industrial output. An analysis by types of ownership showed that, in May, the value added of share-holding enterprises increased the highest by 6.6%, followed by the value added of the state holding enterprises, which increased by 3.7% year on year. The value added of enterprises funded by foreign investors or investors from Hong Kong, Macao, and Taiwan decreased by 0.3%.

BT 201907 ECONOMY 13Third, investment in high-tech industries witnessed growth. Particularly, investment in high-tech manufacturing and high-tech services where increased by 10.2% and 15.6% year-on-year respectively.

BT 201907 ECONOMY 14Other positive factors include unemployment, which has remained stable and the deepening structural reforms in the country.
 

Conclusion
The Chinese economy is still growing, albeit that growth is slower in some areas, such as the industrial sector. Retail sales, including online sales, are growing, and fixed investment is also increasing, especially in high tech services. The Chinese economy remains resilient in the face of geopolitical shocks, such as the intensifying trade war. The Chinese government remains prepared to stimulate the economy, and many enterprises are showing flexibility by planning to relocate their manufacturing plants to avert the tariffs. Despite expectations of slower economic growth in the upcoming quarters, pessimism is not fully warranted yet.

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