China's economy recovers further in April fueled by surging consumption, growing industrial output
Published: May 16, 2023 10:17 PM
Tourists enjoy night time at the ancient town of Xiangyang City, central China's Hubei Province, April 30, 2023. China is witnessing a travel boom during this year's five-day May Day holiday. (Photo by Yang Dong/Xinhua)

Tourists enjoy night time at the ancient town of Xiangyang City, central China's Hubei Province, April 30, 2023. China is witnessing a travel boom during this year's five-day May Day holiday. (Photo by Yang Dong/Xinhua)

China's National Bureau of Statistics (NBS) on Tuesday released key economic data for April, characterized by robust growth in consumption but a slowdown in the real estate sector, with experts stressing that the economy is demonstrating a trend of steady growth, which will translate into faster GDP expansion in the second quarter.

Judging by the April data, consumption is the highlight of China's recent economic performance. Retail sales, a main gauge of the sector, jumped by 18.4 percent, rising sharply from a 10.6 percent increase in March for the fastest gain since March 2021. 

A number of consumption sectors reported nearly 50 percent growth for the month, a vivid display of China's exuberant market demand. For example, dining revenues shot up by 43.8 percent year-on-year, while jewelry sales surged by around 44.7 percent. 

Chen Jia, a macroeconomic observer, said that there's hardly any country or region in the world that has reported such a scale of continued growth in the consumption sector, particularly when the US is mired in hard landing risks after the banking crisis, while the EU is facing stagflation risks.

"Whether in terms of the macroeconomy or most economic segments like consumption, China outperforms the average level of developed markets," Chen told the Global Times on Tuesday via a written statement.

Growth in industrial output also quickened during the month. In April, the industrial added value of major industrial enterprises in China rose by 5.6 percent, accelerating from 3.9 percent growth in March.

Some sectors, though, still showed a certain level of weakness. The decline of real estate investment continued to deepen in April. In the first four months, housing investment slipped by 6.2 percent, compared with a 5.8 percent decline in the first three months and a 5.7 percent fall in the January-February period.

In general, China's fixed-asset investment surged by 4.7 percent year-on-year in the January-April period, slowing from 5.1 percent growth in the first quarter.

"Judging from the April economic data, China's economy has both opportunities and challenges. 

"On the bright side, domestic demand continues to make a bigger contribution to economic growth. In terms of challenges, investment demand is still lagging behind, which might restrain the job market as well as the consumption sector's further upgrade," Chen Jianwei, an associate professor at the University of International Business and Economics, told the Global Times on Tuesday.

Following the release of the economic data, some overseas media published reports saying that China's economic trend was below market expectations. Reuters, for example, noted on Tuesday that China's economic recovery is "losing steam."

Such comments triggered rebuttals from domestic economists. As Chen Jia pointed out, China is not totally reliant on stimulus policies for economic growth. Instead, the growth is fueled more by structural reforms of the supply side to boost the innovation abilities of China's supply chains.

He also stressed that it's difficult for any countries or regions to replace China's comparative advantage on the global supply side and the huge scale of the demand side.

A statement sent by UBS Chief Investment Office to the Global Times noted that although certain April economic data showed that China's economic momentum had slowed after exceeding expectations in the first quarter, the overall recovery of China's economy is "on track."

Tian Yun, a veteran economic observer, told the Global Times that judging by the current situation, the trend of China's economic recovery will be solid in the second quarter, and the economy is expected to expand by more than 6 percent this year. 

China has set a growth target of around 5 percent in 2023, according to this year's Government Work Report. Domestic GDP rose by 4.5 percent in the first quarter.

Some overseas media also questioned the ability of China to keep the world from economic recession. A report by German international broadcaster Deutsche Welle, for example, noted that China is unlikely to "rescue" the world economy, unlike how it supported overseas countries to recover from the 2008 financial crisis.

Experts stressed that China never sets the goal of rescuing the world economy, but its development course will indeed bring opportunities to its global business partners.

Chen Jia, for example, stressed that China's cost-effective products have brought benefits to the US and Europe in managing inflation, while China's advantages in supply chains will also bring opportunities and benefits for overseas corporations.