China’s economy tanked in the first three months of the year.
BEIJING: China’s industrial output returned to growth for the first time this year in April, official data showed Friday (May 15), as the country continued its gradual recovery after the coronavirus brought activity to a near-halt.
Industrial production grew a more-than-expected 3.9 per cent year-on-year last month in a sign that China – where the pathogen first emerged – is recovering from tough lockdown measures now seen in other parts of the world.
A Bloomberg poll of analysts had forecast growth of 1.5 per cent.
But retail sales remained in contraction territory, National Bureau of Statistics data showed, signalling that consumer demand is still weak despite China’s initial success in containing the outbreak.
Retail sales were down 7.5 per cent from a year ago, an improvement from a 15.8-per cent plunge in March.
Industrial production growth last month was better than the 1.1-per cent contraction in March and 13.5-per cent collapse in the first two months of this year as well – the first time industrial output shrank in three decades as the virus ravaged the economy.
Unemployment, however, crept up by 0.1 per cent from March, to 6 per cent, adding to concerns over a post-pandemic rebound.
Nomura analysts said in a recent report that markets may have been “overly optimistic” about a swift recovery in China, pointing to collapsing external demand due to the spread of the pandemic and the growing threat of a second wave of COVID-19 infections.
They added that a moderate rebound in locally transmitted cases in recent days remains a concern also, as China gradually relaxes social distancing rules, noting that business recovery is mixed across different sectors.
“Retails sales during this year’s Labour Day holiday were still down 6.7 per cent from last year, and revenue for the catering and accommodation industries only recovered to around 70 per cent of normal levels,” said Nomura.
