China’s economic growth momentum held up in April despite slowing fixed-asset investment and retail sales growth, with analysts expecting the nation’s policy stance to remain unchanged in the coming months.
Industrial output rose 7 percent year-on-year in April, 1 percentage point higher than in March and 0.5 percentage point higher than a year ago, according to data released by the National Bureau of Statistics on May 15.
The surveyed unemployment rate in the urban areas was 4.9 percent, 0.2 percentage point lower than in March and 0.1 percentage point lower compared with a year ago.
China also continued to make headway in its supply-side structural reform, the bureau said. For example, the asset-liability ratio of major enterprises was 56.4 percent at the end of March, 0.8 percentage point lower than a year ago.
However, fixed-asset investment growth fell to 7 percent in the January-April period from 7.5 percent in the January-March period. Retail sales grew 9.4 percent in April, down from 11.1 percent in March.
Property development investment, which is a major driver of overall economic growth, increased 10.3 percent in the first four months of this year, 0.1 percentage point lower than the first quarter.
“China maintained an overall trend of stable and improving growth in April,” said NBS spokeswoman Liu Aihua. “It is capable of maintaining such a trend in the medium and long term.”
“Regulatory tightening in China’s financial system is starting to drag on growth,” said Frederic Neumann, co-head of Asian economics research at HSBC Holdings Plc in Hong Kong.
“Fixed-asset investment, especially infrastructure, may slow further in the coming months as tighter financial regulations, especially regarding shadow banking, are starting to bite,” he was quoted by Bloomberg as saying.
But Iris Pang, an economist with banking group ING, said high-tech investment will help shore up fixed-asset investment in the coming months.
“Investment in research and development in high-tech manufacturing will boost fixed-asset investment in China,” she said. “This will continue until the country has reached a stage when it can produce its own high-quality semiconductors and smartphone operating system. That could mean a few years of high investment growth in these areas.”
Liu Dongliang, a senior analyst of the China Merchants Bank, said that the April data showed the Chinese economy remained on track and there had been no signs of a significant slowdown. “Infrastructure investment may rebound, property investment easing will be mild, and unemployment remained at low levels, which are all factors buttressing the economy,” he said.