China’s Industrial Activities Remain Strong Despite Economic Slowdown: A Look at May 2024 Data

In a workshop in Hangzhou, Zhejiang Province of China, a worker is seen welding steel on June 8, 2024. This image signifies the ongoing industrial activities in China, highlighting the manufacturing sector’s importance in the country’s economy.

Despite positive retail sales data in May, other economic indicators such as industrial output and fixed asset investment fell short of projections. Industrial output grew by 5.6% year-on-year, slightly below the anticipated 6% increase. Fixed asset investment saw a 4% rise compared to the previous year, just below the 4.2% forecasted by economists. The National Bureau of Statistics reported that total retail sales of consumer goods in May reached 3.92 trillion yuan.

The decline in fixed asset investment can be attributed to a sharp drop in real estate investment. Excluding real estate, total fixed asset investment registered an 8.6% increase compared to the previous year. China’s urban unemployment rate remained steady at 5% in May, a slight improvement from the previous year. The country’s exports grew by 7.6% year-on-year in May, outperforming expectations, while imports only increased by 1.8%.

Loan data also indicated weak demand, with outstanding yuan loans rising by 9.3% in May, the slowest increase since 1978. M1 money supply, which includes cash in circulation and demand deposits, decreased by 4.2% in May, marking the largest decline since 1986. Inflation data for May showed a 0