China's economy accelerates recovery engine as May data improves

Workers are busy at the workshop of Harbin Electric Group Harbin Steam Turbine Co., Ltd. in Harbin, northeast China’s Heilongjiang province, May 7, 2022.(Xinhua News Agency/Wang Jianwei)
BEIJING, June 16 (Xinhua) — China’s key economic indicators improved in May, further evidence that the world’s second-largest economy is expected to recover steadily from the impact of COVID-19, as well as coordinate epidemic control and Policy implications for economic growth.
“Overall, China’s economy has gradually overcome the negative impact of the epidemic and is showing a rebounding momentum.” Fu Linghui, a spokesman for the National Bureau of Statistics, said when commenting on the data.
China’s industrial output rose 0.7 percent in May from a year earlier, official data showed, reversing a 2.9 percent decline in April, an encouraging sign of factory activity rebounding amid the reopening.
For example, Shanghai and Jilin, the industrial bases whose production was disrupted by the Omicron outbreak, saw a much smaller drop in industrial output compared to April.
In May, my country’s foreign trade continued to support growth, increasing by 9.6%, 9.5 percentage points higher than the previous month.Exports recorded a double-digit growth of 15.3%, up from 1.9% in April and better than expected, as logistics congestion and ports resumed operations.
Retail sales, the main indicator of consumption strength, continued to decline in May, but the decline narrowed to 6.7% as domestic demand gradually improved.
“In terms of demand, the important role of investment has increased,” Meng Wei, a spokesman for the National Development and Reform Commission, said at a news conference on Thursday. There are 102 key projects under the 14th Five-Year Plan.
From January to May, investment in infrastructure construction increased by 6.7% year-on-year, 0.2 percentage points higher than that from January to April.
Meng also highlighted China’s ability to rein in inflation in May, with consumer prices unchanged from the previous month and ex-factory price growth slowing to 6.4%.
The “hard-won” price stabilization came against a backdrop of high global commodity prices and serious inflation risks in some major economies, Meng said, citing China as an important “stabilizer” for global prices.
Despite the positive signs, analysts are calling for vigilance as geopolitical tensions, a protracted pandemic and Fed rate hikes continue to weigh on the global economic outlook, while consumption in China remains weak and employment remains under pressure.
Wen Bin, chief analyst at China Minsheng Bank, urged more efforts to promote domestic demand and employment, provide assistance to difficult industries and individuals, and enhance the confidence of market players.
Recently, the State Council issued 33 measures in six areas to further stabilize the economy.
The State Council executive meeting on Wednesday decided that China will support private investment and promote projects with multiple effects to better promote effective investment, consumption and employment.
On the basis of effectively controlling COVID-19 and implementing a series of growth-promoting measures, China’s economy is expected to show reasonable growth in the second quarter, Fu said.
“Considering the relatively low inflation rate and fiscal deficit rate, abundant foreign exchange reserves, and ample room for macro-control, my country has the conditions to deal with risks and challenges and overcome economic fluctuations,” said Long Haibo, a researcher at the National Development Research Center.State Department.

Post time: Jun-21-2022