Betty Wang, senior China economist at ANZ, points out that for the Chinese economy, pullback in April mainly originated from country’s manufacturing sector, with fixed asset investment (FAI) and industrial production (IP) registering sharp slowdowns.
Key Quotes
“IP growth of the manufacturing sector dropped to 5.3% y/y in April from 9.0% in March due to weaker automobile and electric machinery production. FAI growth in the sector also slowed to 2.5% y/y in the January-April period compared with 4.6% in January-March. However, FAI growth in the infrastructure sector maintained its previous pick-up pace, rising 4.4% y/y in the January-April period.”
“Meanwhile, property investment held up well in April, with a big jump in developers’ funding conditions. Property investment growth rose to a new high (since 2015) of 11.9% y/y over the first four months of this year. During the same period, growth of developers’ funding, which holds the key to property investment, also jumped to 8.9% y/y, the fastest in 20 months, as bank loans, advance payments, and mortgages grew at a quicker pace. This is also consistent with our observations of the rebound in home sales, which increased 0.4% y/y in January-April, representing the first positive y/y growth this year.”
“Today’s data suggests the need for proactive policy support, especially amid an escalation in the China-US trade disputes.”
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