YANGZHOU, CHINA – MAY 02: Aerial view of tourists visiting the Dongguan street during the May Day holiday on May 2, 2023.
Vcg | Visual China Group | Getty Images
China’s economic data for April continued to show an uneven recovery path as the economy continues to emerge from the impact of its stringent Covid restrictions.
Industrial production for April rose by 5.6% year-on-year, compared to the 10.9% expected by economists surveyed in a Reuters poll. The figure was up 3.9% in March following a muted start to the year.
Retail sales rose by 18.4% – lower than economists’ forecast a surge of 21%.
Fixed asset investment rose by 4.7%, against expectations of 5.5%. The reading rose 5.1% the previous month.
China stocks have pared most of the gains seen this year. The Shenzhen Component was down 4.67% quarter-to-date and up only 1.48% year-to-date, and notching a 9.5% drop from its peak in early February.
“Market sentiment remains very weak in our client conversations,” Goldman Sachs economist Hui Shan wrote in a Sunday report.
She expects more measures from the government rather than a change in interest rates to improve market confidence.
“Symbolic measures that aim at boosting confidence, such as RRR cuts, seem more likely to us, especially around quarter-end when liquidity demand is high,” she wrote, referring to banks’ reserve requirement ratio — the amount of funds banks need to hold as reserves.
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