Voice of America
15 Sep 2023, 17:35 GMT+10
BEIJING - China's factories picked up their pace and retail sales also gained momentum in August, the government reported Friday, suggesting the economy may be gradually recovering from its post-pandemic malaise.
However, despite busy activity in restaurants and stores, the figures showed continuing weakness in the all-important property sector, where real estate developers are struggling to repay heavy loads of debt in a time of slack demand. Investment in real estate fell 8.8% in August from the year before. The decline has been worsening since the beginning of the year.
Acting to relieve the burden on banks, the People's Bank of China, or central bank, announced late Thursday that the reserve requirement for most lenders would be cut by 0.25 percentage points as of Friday.
That would free up more money for lending, "In order to consolidate the foundation for economic recovery and maintain reasonable and sufficient liquidity," the central bank said.
Friday's report showed retail sales rose 4.6% in August from a year earlier, with auto sales climbing 5.1%. Retail sales rose a meager 2.5% in July.
Consumers grew more cautious about spending in the past year, even as China loosened stringent policies to contain outbreaks of COVID-19.
Industrial output grew at a 4.5% annual pace, up from 3.7% in July and the fastest rate since April.
'Overall, in August, major indicators improved marginally, the national economy recovered, high-quality development was solidly advanced, and positive factors accumulated,' Fu Linghui, spokesperson for the National Bureau of Statistics, told reporters.
But Fu added that there were 'still many external factors of instability and uncertainty' and that domestic demand remains weak, so that 'the foundation for economic recovery still needs to be consolidated.'
The trends in August were somewhat better than expected, Julian Evans-Pritchard of Capital Economics said in a report.
'Fiscal support shored up investment, but the real bright spot was a healthy pick-up in consumer spending, suggesting that households may be turning slightly less cautious,' he said.
China's economy expanded by 0.8% in the three months ending in June compared with the previous quarter, down from 2.2% in January-March. That is equivalent to a 3.2% annual rate, which would be among the weakest pace in decades.
Roughly one in five young workers is unemployed, a record high, adding to pressures on consumer spending.
The downturn in the housing market, which spills into many other sectors in addition to construction and materials, also has weighed on China's recovery from severe disruptions of the past several years as the ruling Communist Party tried to eliminate waves of COVID-19 infections.
Share prices advanced Friday after the figures were released, with Hong Kong's Hang Seng gaining 1.7% while the Shanghai Composite index rose 0.3%.
'There's a growing sense of optimism among a cohort of investors who believe that Beijing's recent initiatives to stimulate the economy and stabilize financial markets are showing signs of success,' Stephen Innes of SPI Asset Management said in a commentary.
Get a daily dose of Breaking Property News news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Breaking Property News.
More InformationLONDON, UK: This week, Adidas' newest running shoes, the Adizero Adios Pro Evo 1, went on sale for US$500. Worn ...
Islamabad [Pakistan], September 30 (ANI): Dealing a further blow to the people already saddled with mounting inflation, Pakistan's Oil and ...
Islamabad [Pakistan], September 30 (ANI): Flight services of the Pakistan International Airlines' (PIA) were disrupted after five three Boing 777 ...
Mumbai (Maharashtra) [India], September 30 (ANI): The Reserve Bank of India (RBI) has announced an extension of the deadline for ...
Washington DC [US], September 30 (ANI/WAM): The International Monetary Fund (IMF) Executive Board approved a Resilience and Sustainability Facility (RSF) ...
Washington DC [US], September 30 (ANI/WAM): The World Bank Board of Directors today approved USD 365 million in International Development ...
Construction of new homes in Finalnd has reportedly dropped to the lowest level since the 1940sThe housing market in Finland ...
Construction of new homes has reportedly dropped to the lowest level since the 1940sThe housing market in Finland is facing ...
Chittagong, Bangladesh - European maritime companies are ditching their old ships for scrap on Bangladesh beaches in dangerous and polluting ...
DUBAI, 15th September, 2023 (WAM) -- A total of 2,329 real estate transactions worth over AED 12.7 billion were conducted ...
Construction of new homes has reportedly dropped to the lowest level since the 1940s The housing market in Finland ...
Construction of new homes in Finalnd has reportedly dropped to the lowest level since the 1940s The housing market ...