Dismal industrial data in China raises economic worries

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Production in Chinese industry increased 5.6 percent in April compared to the same period last year, but fell short of expectations of around eleven percent, government data released on Tuesday showed.

The increase in retail sales was also below economists’ expectations, with 18.4 percent. Growth seems clear at first glance, but the strict corona measures imposed by the government a year ago with lockdowns in megacities like Shanghai have almost paralyzed the economy in many areas.

The latest data underscores recent concerns over China’s recovery from the coronavirus bottom. Foreign trade lost momentum in April, exports grew more slowly and imports declined significantly. Inflation also weakened further.

At the very least, low inflation gives China’s central bank room to support the economy. On Monday, central bankers had already announced that monetary policy would continue to loosen accordingly. Experts are already counting on further relaxation.

But in addition to the consequences of the strict zero Covid policy, which was lifted at the end of 2022, the Chinese economy is suffering from the consequences of the real estate bubble in parts of the country. In addition, rising interest rates worldwide due to high inflation in many countries makes it more expensive for Chinese companies to borrow in foreign currency. (SDA)

Source :Blick