China’s ‘deteriorating’ property sector weighs heavy, but measures offer hope to economy

Property investment fall accelerated to 9.8 per cent in the first four months of the year, while retail sales growth slowed to 2.3 per cent in April

Beijing has stepped up efforts to bring economic growth back on track by boosting consumer goods sales, upgrading equipment and solving the property slump

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China’s retail sales growth rose by 2.3 per cent in Apri. Photo: AP

Ji Siqiin BeijingandMia Nurmamatin Hong Kong

Published: 10:00am, 17 May 2024Updated: 4:28pm, 17 May 2024

China registered weaker economic activity in April, largely owing to the deteriorating property sector and a consumption slowdown.

But Beijing’s swift measures to further lower mortgage rates and promote property destocking on Friday have raised hopes that more supportive policies would be introduced to reduce financial risks and accomplish this year’s economic growth target.

Property investment dropped by 9.8 per cent year on year in the first four months of the year, exceeding the 9.5 per cent drop observed in the first quarter, according to data released by the National Bureau of Statistics (NBS) on Friday.

Retail sales growth – a key gauge of consumption – rose by only 2.3 per cent year on year last month, compared with the 3.1 per cent growth seen in March, with analysts pointing to a slowdown in car sales in April.

China’s industrial output, though, rose by 6.7 per cent last month from a year earlier, with analysts attributing the increase to robust exports fuelled by soaring global demand.

“China’s economic data suggests further pressure on the economy from the deteriorating real estate sector and weakening consumption,” said Gary Ng, senior economist at Natixis Corporate and Investment Bank.

It has become an even more immediate task for the government to fend off uncertainties to boost confidence

Gary Ng, Natixis Corporate and Investment Bank