China’s economy continued to show mild improvement in August, as industrial production, retail sales and fixed-asset investment (FAI) growth all beat expectations. Industrial production, a gauge of activity in the manufacturing, mining and utilities sectors, rose by 4.2% in August, year-on-year, the National Bureau of Statistics (NBS) confirmed. This was above the estimates of a rise of 3.9%, according to Wind, a leading provider of financial information services in China, and improving from 3.8% growth in July. Retail sales rose by 5.4% in August, above the expected rise of 4.2% and also up from the 2.7% growth in July. Fixed-asset investment – a gauge of expenditure on items including infrastructure, property, machinery and equipment that Beijing has relied on this year to stem downturn risks – rose by 5.8% in the first eight months, year-on-year, up from a rise of 5.7% from January-July. “China’s economy held up slightly better than anticipated last month, but momentum still weakened relative to July amid renewed virus disruptions and factory closures due to power shortages,” said Julian Evans-Pritchard, Senior China Economist at Capital Economics.
“September is shaping up to be even worse. And while the current virus wave may have peaked, activity is set to remain weak over the coming months amid the deepening property downturn, softening exports and recurring Covid-19 disruptions.” China’s urban surveyed jobless rate stood at 5.3%, down from 5.4% in July. The jobless rate for the 16-24 age group remained at an elevated level of 18.7% in August, down from a record 19.9% growth in July. “The economy held out against multiple unexpected headwinds in August and showed a positive recovery with the help of more additional supportive policies,” the NBS said in a statement.
Some analysts have suggested that the economy could remain weak until the end of the year, following on from the 0.4% gross domestic product (GDP) growth in the second quarter. Beijing has already downplayed the 2022 growth target of “around 5.5%,” insisting on a fine balance between growth, security and coronavirus controls. Some investment banks have accordingly lowered their estimates on China’s yearly growth to as low as below 3%. Premier Li Keqiang vowed to further expand investment to create more demand and lift confidence amid a “slight fluctuation” in China’s economy as it recovers, the South China Morning Post reports.
