Explainer | 5 takeaways from China’s April economic data as youth unemployment set dismal record

China’s jobless rate for the 16-24 age group hit an all-time high in April, while retail sales and industrial production fell short of expectations
Fixed-asset investment ‘held up reasonably well’ in April, analysts said, while investment in the property sector fell again

China's economic recovery

Andrew Mullen

Published: 11:30pm, 16 May 2023

Why you can trust SCMP

1. Employment

The jobless rate for the 16-24 age group in China hit a record high of 20.4 per cent in April, up from 19.6 per cent in March, the National Bureau of Statistics (NBS) confirmed.

The overall urban surveyed jobless rate stood at 5.2 per cent in April, down from 5.3 per cent in March.

“The unemployment rate for the young labour force rose above 20 per cent, which is a worrying sign,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management.

2. Retail sales

Retail sales in China rose by 18.4 per cent in April, year on year – below an expected rise of 20.2 per cent, but up from the 10.6 per cent increase in March.

However, the surge was largely caused by a low comparison base, as the figure had dropped by 11.1 per cent in April last year.

Retail sales last month also fell by 7.8 per cent from March, the official data showed.

“There was also slower-than-expected retail sales growth in April at 0.49 per cent, month on month, from 0.78 per cent month on month in March (18.4 per cent year on year versus 21.9 per cent year on year consensus and 10.9 per cent year on year in March),” said Iris Pang, chief economist for Greater China at ING.

“This suggests consumers were saving money in April for spending on the holidays in May. Consumers are cautious when they spend. Another reason for the slower-than-consensus growth was due to reductions in spending on home decoration.

“Spending on home decorations contracted by 11.2 per cent, year on year, in April after an 11.7 per cent year-on-year contraction in the same month last year.”

3. Industrial production

Industrial production, a gauge of activity in the manufacturing, mining and utilities sectors, rose by 5.6 per cent in April, year on year, the NBS confirmed.

But this was also below expectations for a rise of 9.7 per cent, according to Wind, a leading provider of financial information services in China, but was up from 3.9 per cent growth in March.

‘Increasingly clear’ weak demand cools China exports, slowdown until late 2023

“Industrial output softened last month, contracting 0.3 per cent, month on month. Weakness in foreign demand appears mostly to blame,” said analysts from Capital Economics.

“Even though customs reported that exports were still strong in April, there was a partial reversal of March’s jump. And more reliable figures on industrial exports sales published [on Tuesday] suggest that foreign demand was at its weakest in 28 months in April.”

4. Fixed-asset investment

Fixed-asset investment – a gauge of expenditure on items including infrastructure, property, machinery and equipment – rose by 4.7 per cent in the first four months of 2023, year on year, down from a rise of 5.1 per cent in the first quarter.

Fixed investment held up reasonably well

Capital Economics

“Fixed investment held up reasonably well. On our estimates, growth was largely stable in seasonally adjusted month-on-month terms. Manufacturing and infrastructure investment remained strong, which more than offset a further contraction in property investment,” said analysts from Capital Economics.

5. Property investment

Investment in the property sector, meanwhile, fell by 6.2 per cent in the first four months of the year, down from a fall of 5.8 per cent in the first quarter.

“Property-related activity growth remained subdued in April despite favourable base effects and continued housing easing, although higher new home completions appear as a silver lining,” said analysts at Goldman Sachs.