China’s economic recovery gains traction in May

BEIJING: China’s economy is gradually overcoming the negative impact of its Covid-19 flare-ups in recent months, with its main indicators showing marginal improvement last month, the country’s National Bureau of Statistics (NBS) reported on Wednesday.

At a press conference, NBS spokesman Fu Linghui noted that “the economy is showing good recovery momentum,” but warned that challenges to economic recovery still remain.

NBS data showed that fixed-asset investments rose 6.2 percent in the first five months of 2022, compared to 6.8 percent gain in the first four.

Industrial output grew 0.7 percent in May from a year earlier after falling 2.9 percent in April. The uptick was underpinned by the easing of coronavirus curbs in some industrial bases and strong global demand.

Industrial production in the Yangtze River Delta and northeastern regions, which were hit hard by the Omicron variant-fueled outbreak, improved in May, falling 3.2 percent and 1.1 percent, respectively, year on year. The decline rates were over 10 percentage points slower than April’s.

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China’s exports jumped 15.3 percent in May from a year earlier, shattering expectations, as factories restarted operations and logistics snags eased.

Chinese banks extended 1.89 trillion yuan (about 279.9 billion U.S. dollars) in new loans last month, nearly tripling April’s tally and suggesting a recovery in credit demand.

The nationwide surveyed urban unemployment rate fell to 5.9 percent in May from 6.1 percent the month before.

Retail sales fell 6.7 percent year on year in May, compared with the 11.1-percent decline in April.

“Consumption is still recovering from the fallout of the epidemic and will continue the momentum with employment remaining stable,” Fu said.

“China is expected to register a reasonable economic growth in the second quarter if the epidemic is effectively controlled and the pro-growth measures are taking effect,” he added.

The country has taken various measures to ease the negative effects of the coronavirus outbreaks on the economy.

Last month, China’s State Council, or Cabinet, announced 33 measures covering fiscal, financial, investment and industrial policies to revive the economy. The government has also been accelerating infrastructure spending to boost investment.

To shore up market entities, Beijing has unveiled measures that include tax refunds and fee cuts, the deferral of social security contribution payments, and the smoothing of industrial and supply chains.

Noting that consumption remains weak and employment remains under pressure, Wen Bin, chief analyst at China Minsheng Bank, called for greater efforts to boost localdemand and employment, give bailouts to industries and individuals in trouble, and improve confidence among market entities.

Looking ahead, the country will effectively coordinate epidemic prevention with economic and social development, step up macro policy adjustments, and exert every effort to ensure the implementation of pro-growth policies to promote sustained economic recovery, Fu said.

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