Coronavirus: China’s uneven economic recovery continued in April, as industrial engine returned to growth

In April, China’s industrial output grew by 3.9 per cent, retail sales fell by 7.5 per cent and fixed asset investment fell by 10.3 per cent, suggesting an uneven recovery

Data suggests demand weaknesses remain, while for industrial engine overseas shutdowns will hamper growth before long

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Industrial production, a measurement of output in China’s manufacturing, mining and utilities sectors, grew by 3.9 per cent from a year earlier, following a 1.1 per cent contraction in March. Photo: Xinhua

Published: 9:59am, 15 May 2020Updated: 9:46pm, 15 May 2020

China’s industrial economy bounced back strongly in April after the first quarterly contraction in history, but retail and investment remained weak, as demand concerns persisted.

Across the board, monthly data released on Friday was improved from March, with industrial production, retail sales, fixed asset investment all kicking on. However, with weak demand at home and abroad, China’s efforts to get the economy back to full speed are likely to remain slow, analysts have said.

Industrial production, a measurement of output in China’s manufacturing, mining and utilities sectors, grew by 3.9 per cent from a year earlier, following a 1.1 per cent contraction in March. This was much better than the median result of a Bloomberg poll of analysts, which predicted 1.5 per cent growth.

In the first quarter, this vital part of the Chinese economy shrank by 8.4 per cent compared a year earlier. April’s improvement was led by a 5.0 per cent growth in manufacturing from a year earlier, much improved on a 1.8 per cent drop in March.

Retail sales, a gauge of consumer spending in the world’s most populous nation, fell by 7.5 per cent compared to April 2019. This was much improved on March’s 15.8 per cent drop, which helped drive a 19.0 per cent collapse in spending in the first quarter. It was worse than analysts’ forecasts of a 6.0 per cent drop.

Fixed asset investment, the value of spending on real estate, infrastructure and capital equipment, fell 10.3 per cent in the first four months of the year compared to a year earlier, an improvement on the 16.1 per cent drop in the January-March period and slightly worse than the Bloomberg poll, the median forecast of which was minus 10 per cent.

Investment in the manufacturing sector fell by 18.8 per cent over the first four months of the year, with infrastructure investment down 11.8 per cent and property down 3.3 per cent.