Hongkong
CNN
–
China’s economy In 2023, consumers made a solid start in 2023 as three years of strict pandemic restrictions ended.
According to the country, GDP rose 4.5% in the first quarter compared to a year ago. National Bureau of Statistics Tuesday. That surpasses estimates of 4% growth in the Reuters vote of economists.
but Private investment Few deals and youth unemployment rate rise to the second highest ever, suggesting that private sector employers in the country remain vigilant about Long-term prospects.
Consumption rebounded the strongest. Retail sales increased by 10.6% from a year ago, the highest growth rate since June 2021. Retail sales rose 5.8% in the January-March months, mainly due to increased revenue growth in the catering service industry.
“The combination of steady growth in consumer confidence and still unsatisfactory demand shows us that consumer-led recovery still has room to run,” said Louise Loo, chief economist at Oxford Economics China.
Industrial production also showed steady growth. It rose 3.9% in March, compared with 2.4% in January-May. (China usually combines its economic data into January and February economic data to explain the impact of the New York holiday.)
Last year, GDP expanded only 3%, Beijing has trampled on Beijing’s official growth targets due to disruption caused by the coronavirus supply chain and hammering consumer spending.
Authorities finally canceled the zero-money policy in December after local governments used up cash to pay huge bills during protests on the country during the Volkswagen Street protests. After a brief disruption due to the surge, the economy began to show signs of recovery.
Last month, formal instrumentation for non-manufacturing activities jumped to its highest levels in more than a decade, suggesting that the country’s key service sectors benefited from a revival of consumer spending after the pandemic restrictions.
With the attractiveness of the economic recovery, investment banks and international organizations have upgraded China’s growth forecast for this year. In its world economic outlook released last week, the International Monetary Fund said China “rebounded strongly” after the economy reopened. It predicts that the country’s GDP will grow by 5.2% this year and 5.1% in 2024.
However, some analysts believe that the strong growth reported in the first quarter was a product of “backloading” economic activity in the fourth quarter of 2022, which was confusing that the pandemic was restricted and then reopened.
“Our core view is that China’s economy is deflationary,” said China’s chief economist in a research note on Tuesday. ”
He said that if adjustments were made to explain the impact of delays in economic activity, GDP growth in the first quarter could be only 2.6%.
Some key data released Tuesday supports the idea. Private investment, for example, is extremely weak.
Private sector fixed asset investment increased by 0.6% from January to March, indicating a lack of confidence among entrepreneurs. (At the same time, state-led investment, increased by 10%.) This is worse than the 0.8% increase recorded between January and May.
The Chinese government has sued Surprising measures Restore confidence in private entrepreneurs, but the movement has inspired more tension than optimism.
The most important real estate industry has also fallen into a deep recession. Investment in real estate fell 5.8% in the first quarter. Property sales of floor area decreased by 1.8%.
“The domestic economy recovers well, but the limitations of insufficient demand are still obvious,” NBS spokesman Fulin said at a press conference in Beijing on Tuesday. “The prices of industrial products are still falling and companies are facing many difficulties in profitability.”
Unemployment continues to surge Among youth.
The unemployment rate between the ages of 16 and 24 reached 19.6% in March, reaching 19.6% for the third consecutive month. It is the second highest record, second only to the 19.9% level reached in July 2022.
Young people have high unemployment rates, Yang said, indicating “economic slackness.”
“By June, there will be a new group of graduates looking for jobs. If China’s economic momentum falters, unemployment may worsen further,” he added.
China’s Ministry of Education previously estimated a record 11.6 million college graduates will look for jobs this year.
At the National People’s Congress meeting last month, the country’s rubber map stamp parliament has set a cautious growth plan for this year, with a GDP target of about 5% and a job creation of 12 million.
