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JAKARTA (TheInsiderStories) – In April, China‘s economy registered a steady and showed a good momentum for growth featuring stable production and demand growth, National Bureau of Statistics of China reported on May 15.

The bureau reported, in the first four months, industrial output rose 6.9 percent, compared with the 6.8-percent gain in the first quarter of 2018. However, that the economy still faces growing external uncertainties and the acute problems of unbalanced and inadequate domestic development, the data showed.

Spokesperson Liu Aihua said in a press statement, the trade frictions between China and the United States (U.S) the possible influence on the Chinese economy has not been fully reflected in the short term.

Furthermore the data showed, retail investment and sales were weaker. Retail sales growth slowed to 9.4 percent in April 2018 or below than March 2018 growth at 10.1 percent.

Otherwise, the performance of imported exports was surprisingly still solid amid fears of a trade war with the U.S. But a business survey shows there is a potential for sharp weakening in export orders. This is likely due to fears of stacking goods in warehouses if the U.S and China begin to impose high import-export rates.

Investment growth grew quite slowly in some posts. The increasing borrowing costs as a result of government regulation to reduce risky loans have had an impact on investment activity.

Investment growth in fixed assets slowed to 7 percent during January to April compared to the same period in 2017. While private sector investment growth to 8.4 percent from 8.9 percent in the first three months.

Private sector investment has accounted for about 60 percent of all investment in China. The growth of infrastructure spending that moved China’s economy last year slowed to 12.4 percent in the first four months of 2018 compared to 13 percent growth in the same period in 2017.

The trend is likely to continue as Beijing forces local governments to reduce spending to contain additional debt. China’s property market also showed signs of pressure due to the effect of an increase in mortgage interest rates

Below are the detail data released by National Bureau of Statistics of China:

Industrial Production Grew Notably and New Industries and New Products Witnessed Rapid Growth

In April, the total value added of the industrial enterprises above the designated size was up by 7.0 percent year-on-year in real terms, 1.0 percentage point higher than that in March, or 0.5 percentage point higher than that in April of last year. An analysis by types of ownership showed that the value added of state holding enterprises went up by 7.7 percent year-on-year; collective enterprises down by 6.4 percent; share-holding enterprises up by 7.1 percent; and enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan up by 6.8 percent. The value added of mining industry was down by 0.2 percent year-on-year; manufacturing up by 7.4 percent and production and supply of electricity, heat, gas and water up by 8.8 percent. The value added of high-tech industry and equipment manufacturing grew by 11.8 percent and 10.3 percent respectively, 4.8 percentage points and 3.3 percentage points higher than that of the industrial enterprises above the designated size. The production of new energy vehicles, integrated circuits and industrial robots grew by 82.2 percent, 14.3 percent and 35.4 percent respectively. In the first four months, the total value added of the industrial enterprises above the designated size was up by 6.9 percent year-on-year.

The Service Sector Grew Steadily and the Structure Continued to be Optimized

In April, the Index of Services Production increased by 8.0 percent year-on-year, 0.3 percentage point slower than that of last month. Specifically, information transmission, software and information technology services, rental and business services maintained fast growth. In the first four months, the Index of Services Production increased by 8.0 percent year-on-year, 0.2 percentage point lower than that of the same period last year. In the first three months, the business revenue of service enterprises above the designated size grew by 13.6 percent year-on-year, 0.3 percentage point higher than that of the same period last year. The business revenue of the strategic emerging service industry, science and technology service industry and high-tech service industry grew by 18.0 percent, 16.2 percent and 14.4 percent respectively, 4.4 percentage points, 2.6 percentage points and 0.8 percentage point higher than that of the service enterprises above the designated size.

The Supply-side Structural Reform was Deepened and Continued to Produce Notable Results

The capacity utilization rate improved. In the first quarter, the national industrial capacity utilization rate reached 76.5 percent, 0.7 percentage point higher than that of the same period last year. Micro leverage ratio was reduced. At the end of March, the asset-liability ratio of the industrial enterprises above the designated size was 56.4 percent, 0.8 percentage point lower than that of the same period last year. The stock of commercial buildings decreased. At the end of April, the floor space of commercial buildings for sale was 566.87 million square meters, down by 6.42 million square meters compared with that at the end of March, a year-on-year decrease of 16.0 percent. The cost for enterprises lowered. In the first three months, the cost for per-hundred-yuan turnover of principle activities of the industrial enterprises above the designated size was 84.33 yuan, 0.18 yuan less than that of the same period last year. Investment in areas of weakness increased. In the first four months, the investment in ecological protection and treatment of environmental pollution, agriculture and public facilities management went up by 40.5 percent, 18.9 percent and 10.8 percent year-on-year respectively, 33.5 percentage points, 11.9 percentage points and 3.8 percentage points faster than the overall investment respectively.

Consumption Grew Steadily and New Forms of Businesses Developed Fast

In April, the total retail sales of consumer goods reached 2,854.2 billion yuan, a year-on-year increase of 9.4 percent, which was 0.7 percentage point lower than that of last month. Analyzed by different areas, the retail sales in urban areas reached 2,452.8 billion yuan, up by 9.2 percent, and those in rural areas stood at 401.4 billion yuan, up by 10.6 percent. Grouped by consumption patterns, the total income of catering industry was 302.4 billion yuan, up by 9.6 percent; and retail sales of goods were 2,551.7 billion yuan, up by 9.4 percent. Consumption upgrading showed a strong momentum. The retail sales of communication equipments, cosmetics and materials for construction and decoration of units above the designated size went up by 10.8 percent, 15.1 percent and 11.4 percent year-on-year respectively. In the first four months, the total retail sales of consumer goods went up by 9.7 percent year-on-year. In the first four months, the online retail sales reached 2,579.2 billion yuan, up by 32.4 percent year-on-year, 0.4 percentage point higher than that of the same period last year. Of the total, the online retail sales of physical goods stood at 1,949.5 billion yuan, an increase of 31.2 percent, accounting for 16.4 percent of the total retail sales of consumer goods and the online retail sales of non-physical goods were 629.7 billion yuan, an increase of 36.2 percent.

The Investment Witnessed Slow and Steady Growth and the Growth of Investment in Manufacturing Industry Accelerated

In the first four months, the total investment in fixed assets (excluding rural households) was 15,435.8 billion yuan, a year-on-year growth of 7.0 percent, which was 0.5 percentage point lower than that of the first three months. Of the total, private investment reached 9,544.9 billion yuan, up by 8.4 percent. The investment in the primary industry grew by 16.8 percent year-on-year; that in the secondary industry up by 2.5 percent, of which, that in manufacturing grew by 4.8 percent, 1.0 percentage point higher than that of the first three months; the investment in the tertiary industry grew by 9.3 percent, of which, that in infrastructure grew by 12.4 percent. The investment in advanced manufacturing grew rapidly with investment in high-tech manufacturing and equipment manufacturing grew by 7.9 percent year-on-year, both witnessing 3.1 percentage points higher than investment in manufacturing industry. In the first four months, the total investment in real estate development was 3,059.2 billion yuan, up by 10.3 percent year-on-year. The floor space of commercial buildings sold reached 421.92 million square meters, up by 1.3 percent year-on-year. The sales of commercial buildings were 3,622.2 billion yuan, up by 9.0 percent year-on-year.

The Employment was Good and Stable and the Surveyed Unemployment Rate Dropped

In April, the surveyed unemployment rate in urban areas was 4.9 percent, 0.2 percentage point lower than that in last month or 0.1 percentage point lower year-on-year. The urban surveyed unemployment rate in 31 major cities was 4.7 percent, 0.2 percentage point lower than that in last month or 0.2 percentage point lower year-on-year.

The Rise of Consumer Price Declined Mildly and the Rise of Industrial Products Prices Increased Modestly

In April, the consumer price went up by 1.8 percent year-on-year, 0.3 percentage point lower compared with that of March, or down by 0.2 percent month-on-month. Grouped by categories, prices for food, tobacco and liquor rose by 1.1 percent; clothing up by 1.1 percent; housing went up by 2.2 percent; articles and services for daily use grew by 1.5 percent; transportation and communication increased by 1.1 percent; education, culture and recreation grew by 2.0 percent; health care up by 5.2 percent; and other articles and services grew by 0.9 percent. In the first four months, the consumer price went up by 2.1 percent year-on-year. In April, the producer prices for industrial products grew by 3.4 percent year-on-year, 0.3 percentage point higher compared with that of March, or down by 0.2 percent month-on-month. In the first four months, the producer prices for industrial products increased by 3.6 percent year-on-year. In April, the purchasing prices for industrial producers increased by 3.7 percent year-on-year, down by 0.3 percent month-on-month. In the first four months, the purchasing prices for industrial producers increased by 4.2 percent year-on-year.

The Growth of Exports Stopped its Decline and Began to Increase and the Growth of Imports Accelerated

In April, the total value of imports and exports reached 2,358.2 billion yuan, up by 7.2 percent year-on-year, while in March it witnessed a year-on-year decrease of 2.5 percent. Specifically, the total value of exports was 1,270.5 billion yuan, up by 3.7 percent, while in March it witnessed a year-on-year decrease of 9.8 percent; and that of imports was 1,087.7 billion yuan, up by 11.6 percent, 5.7 percentage points faster than that of last month. The trade surplus was 182.8 billion yuan. In the first four months, the total value of imports and exports reached 9,112.9 billion yuan, a year-on-year increase of 8.9 percent. Specifically, the total value of exports was 4,809.6 billion yuan, up by 6.4 percent; and that of imports was 4,303.3 billion yuan, up by 11.7 percent. In April, the export delivery value of the industrial enterprises above the designated size reached 945.4 billion yuan, up by 4.2 percent year-on-year. In the first four months, the export delivery value of the industrial enterprises above the designated size reached 3,663.4 billion yuan, up by 6.4 percent year-on-year.

Enterprise Performance Improved and the Market Expectation was Good

The profit-making ability of industrial enterprises was enhanced. In the first three months, the total profits made by industrial enterprises above the designated size were 1,553.3 billion yuan, up by 11.6 percent year-on-year. The profit rate from principle businesses of industrial enterprises above the designated size was 6.18 percent, 0.11 percentage point higher than that of the same period last year. In April, the sales ratio of industrial enterprises above the designated size was 98.9 percent, 0.8 percentage point higher than that of the same month last year. The market expectation was good. In April, the manufacturing Purchasing Managers’ Index was 51.4 percent and the Production and Operation Activities Expectation Index was 58.4 percent, staying within the prosperous range. The Business Activity Index for services was 53.8 percent, 0.2 percentage point higher than that of last month. The Business Activities Expectation Index was 60.6 percent, 0.5 percentage point higher that of last month, maintaining above 60.0 percent for 11 months in a row.

Generally speaking, the national economy in April maintained the momentum of steady and sound development. However, we should also be aware that the international destabilizing factors and uncertainties are on the increase, the problems of unbalanced and inadequate development in China are acute, and the foundation to sustain the sound development of national economy needs to be further consolidated. We will take the Xi Jinping Thought on Socialism with Chinese Characteristics for the New Era as the guideline, fully implement the spirit of the 19th National Congress of the Communist Party of China and the Central Economic Working Conference, follow the arrangements of the Report on the Work of the Government, adhere to the general working principle of making progress while maintaining stability, focus on the supply-side structural reform, maintain the continuity and stability of macro policies, expand the reform and opening-up steadfastly, fully implement the innovation-driven development, continue to strengthen the internal driving forces for economic growth, revitalize the real economy in a bid to enable the national economy to score continuous and new achievement while fulfilling high-quality development.

Email: linda.silaen@theinsiderstories.com

 

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The Insider Stories Founder Linda Silaen has a solid, proven history, established over more than a decade as a journalist with a leading internasional news organization, of being the first with the biggest economic news stories in Indonesia. Specializing in corporate news, Linda is also a veteran of some of the biggest macroeconomic and general news stories as Indonesia rapidly transforms into a major market economy. One of the founders of the original blog from which this company developed, Linda’s knowledge of investors’ information communications and data us developed from unrivaled networking skills that make her a well-known name among CEOs, bankers, government officials and private equity investors both in Indonesia and other countries.

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