China’s industrial output rose unexpectedly in May, indicating at least a partial recovery in the world’s second-biggest economy from devastating lockdowns in Shanghai and other cities.
Data show the economy stabilised after a sharp slump the previous month, but Beijing still faces weak consumption and persistent coronavirus outbreaks. Foreign corporate sentiment is also subdued.
Industrial output grew 0.7% in May from a year earlier, after falling 2.9% in April, data from the National Bureau of Statistics (NBS) showed on Wednesday. That matched the drop expected by analysts in a Reuters poll.
As shoppers were confined to their homes in Shanghai and other cities, retail sales were still down 6.7%, though better than the forecast drop in the poll and an improvement from a 11.1% slump in April.
According to the China Passenger Car Association, the country sold 1.37 million passenger cars last month, down 17.3% from a year earlier, narrowing the decline of 35.7% in April.
Fixed Asset Investment Rises
Fixed asset investment, a key indicator tracked by policymakers looking to prop up the economy, rose 6.2% in the first five months, compared with an expected 6.0% rise and a 6.8% gain in the first four months.
The government has been accelerating infrastructure spending to boost investment. China’s cabinet has also announced a package of 33 measures covering fiscal, financial, investment and industrial policies to revive its pandemic-ravaged economy.
The nationwide survey-based jobless rate fell to 5.9% in May from 6.1% in April, above the government’s 2022 target of below 5.5%. However, the surveyed jobless rate in 31 major cities jumped to 6.9%, the highest on record.
Some economists expect employment to worsen before it gets better, with a record number of graduates entering the workforce in summer.
China has set an annual economic growth target of around 5.5% this year but many economists believe that is increasingly out of reach.
- Reuters, with additional editing by George Russell
READ MORE:
China Unveils ‘Green’ Industrial Strategy
Shanghai Land Sales Yield 33% Rise Despite Covid Slump
China’s $318bn Plan to Save Its Economy From Covid Lockdowns
