Poor industrial data in China amplifies economic concerns

Surprisingly weak growth in industrial production and consumer spending in China fuels concerns about the country’s economic recovery, which is important to the global economy. According to government data on Tuesday, production in China’s manufacturing industry rose 5.6 percent in April from the same period last year, but fell short of nearly 11 percent expectations.

The increase in retail sales was also lower than economists had expected, at 18.4 percent. The growth seems obvious at first glance, but a year ago the government’s strict corona measures with lockdowns in megacities such as Shanghai almost paralyzed the economy in many areas.

The latest data underscores recent concerns about China’s post-coronavirus recovery. Foreign trade lost momentum in April, exports grew more slowly and imports fell sharply. Inflation also weakened further.

In any case, the low inflation gives the Chinese central bank room to support the economy. On Monday, the central bankers had already announced that monetary policy would be further relaxed accordingly. Experts are already counting on further easing.

In addition to the consequences of the strict zero-Covid policy, which was only lifted at the end of 2022, the Chinese economy is suffering from the effects of a real estate bubble in parts of the country. In addition, interest rates have risen globally due to high inflation in many countries, making foreign currency borrowing more expensive for Chinese companies. (aeg/sda/awp/dpa)