China’s economic fundamentals remain stable despite the slowing growth of private investment in May, according to data released by the National Bureau of Statistics on June 13.
The data show that industrial production increased 6 percent in May year-on-year, which was unchanged from April and 0.1 percentage point lower than May 2015.
However, China’s industrial structure continues to be optimized, the NBS said, as the production of high-tech and equipment manufacturing industries increased in May by 11.5 percent and 8.5 percent, respectively, significantly higher than the growth of overall industrial production.
Sheng Laiyun, a spokesman for the NBS, said the government has sent nine inspection groups to 18 provinces and regions to find solutions to the slowing private investment growth.
“Downward pressure doesn’t necessarily mean an economic downturn,” Sheng said.
Xia Bin, a counselor to the State Council, said China’s economic transition will not necessarily lead to an economic downturn.
“China still has the potential to sustain decent GDP growth of 6 percent or above,” Xia added.
Year-on-year real estate investment growth for the first five months edged down to 7 percent from 7.2 percent in the January-April period. Commercial housing sales reached 3.68 trillion yuan ($559 billion) from January to May, up 50.7 percent year-on-year.
Retail sales increased by 10 percent year-on-year, 0.1 percentage point lower than the previous month. But growth in real terms after adjusting for inflation was 9.7 percent, which is 0.4 percent higher than April.
From January to May, fixed-asset investment rose by 9.6 percent year-on-year, 0.9 percent lower than in the first four months.
But private investment increased only 3.9 percent from January to May, down by 1.3 percentage points from the January-April period.
Yao Jingyuan, a researcher in the State Council Counselor’s Office, the cabinet’s advisory body, said the speed bumps experienced by the Chinese economy are in essence the result of structural dysfunction.
“The only cure is the ongoing supply-side reform and moderate expansion of domestic demand,” Yao said at a forum on June 13.