Retail sales drive China’s economic growth in May despite trade war

Source:Global Times Published: 2019/6/14 18:48:40

China's economy has been progressing steadily in May despite the lingering trade war, led by an 8.6-percent year-on-year increase in retail sales. 

Officials said China's economy will grow stronger later this year against rising uncertainties, supported by its huge consumer market, dividends from further opening-up and ongoing industrial upgrades.

In May, China's retail sales rose to 3.29 trillion yuan ($475.88 billion), Fu Linghui, an official at the National Bureau of Statistics (NBS), said at a press briefing of the State Council Information Office in Beijing on Friday. The growth rate was 1.4 percentage points higher than in April. Spending during the May Day holidays contributed to retail sales growth.

"The rise in the disposable income of Chinese, a consumption upgrade, the expanding of China's social welfare scheme and the diversified shopping channels were the main causes of the uptick in retail sales," Fu explained. 

Employment remained stable. China's urban unemployment rate was 5 percent, the same as the previous month. And China completed 54 percent of the annual target in new employment in the first five months. 

Fixed-assets investment soared 5.6 percent year-on-year to 21.76 trillion yuan, NBS data showed. 

As the Chinese economy enjoys ample market space and is resilient, Fu said prospects for the Chinese economy are very promising. "China's growth is increasingly driven by domestic demand. Domestic demand contributed to 108.6 percent of economic growth last year and consumer spending contributed over 65 percent to the economic growth in the first quarter of 2019," he noted. 

Meanwhile, the benefits of further opening-up will be shown, enabling China to grow steadily, Fu said. He also highlighted the ongoing industrial upgrade and structure optimization, which will be another focus of the Chinese economy this year. 

For example, China's early 5G commercialization will contribute to a manufacturing upgrade and help improve the efficiency of the services sector. It will also set a solid foundation for intelligent manufacturing and the Internet of Things, "injecting new vitality to economic growth," Fu said. 

On a downside, China's industrial production only grew 5 percent year-on-year in May, 0.4 percentage points lower than last month, the lowest reading since February 2002.  

But Fu said that fluctuations are normal and should be seen with a long-term perspective. "China's economy will remain stable in 2019, and the fundamentals and long-term positive trend remain unchanged," Fu noted.  

Global Times


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