The Chinese National Bureau of Statistics announced the economic statistics for August on September 14. While the Chinese economy is deeply adjusted internally and facing external trade friction pressures, these monthly economic statistics and its changes are an important window to observe China's economic performance.
Let us look at the main economic statistics for August.
First, the growth rate of industrial statistics has fallen. In August, the added value of industrial enterprises above designated size increased by 6.1% year-on-year, and the growth rate was 0.1% higher than that of the previous month. From January to August, the national industrial added value increased by 6.5% year-on-year, and the growth rate dropped by 0.1% from January to July. In terms of economic types, in August the value-added of state-owned holding enterprises increased by 5.6% year-on-year, collective enterprises fell by 1.2%, joint-stock enterprises increased by 6.4%, and foreign-invested enterprises of Hong Kong, Macao, and Taiwan increased by 4.98%. It can be seen that the industrial added value continued to maintain single-digit growth in the first eight months, and the growth rate declined, indicating that domestic industry is still sluggish. Among the added value of various industrial enterprises, the growth rate of state-owned enterprises is still considerably impressive, and joint-stock enterprises, most of which are private enterprises are relatively strong, while foreign capital performance is average.
Second, investment statistics continue to decline. From January to August, the national fixed asset investment (not including farmers) was RMB 415.158 billion, a year-on-year increase of 5.3%, and the growth rate dropped by 0.2% from January to July. Among them, private investment was RMB 259.954 billion, an increase of 8.7%, and private investment accounted for 62.6% of the scale of fixed assets investment. It should be pointed out that the growth rate of fixed asset investment continues to decelerate, and the trend of downward trend is obvious. The investment growth rate from January to August this year continues to be the lowest since that of 1995. Investment relies on the large-scale private investment, and private investment has maintained a growth rate of 8.7%. This also reflects the sharp slowdown in the growth rate of state-owned enterprises. According to the statistics released by the Chinese National Bureau of Statistics, the growth rate of state-owned enterprises investment in January-August is only 1.1%. Investments show that there is an insufficient drive for the economic engine.
Third, consumption growth has slipped to a single-digit level. In August, the total retail sales of consumer goods reached RMB 315.42 billion, an increase of 9.0% year-on-year and the growth rate was 0.2% higher than that of the previous month. From January to August, the total retail sales of consumer goods increased by 9.3% year-on-year and the growth rate remained the same as that in January-July. From January to August, the national online retail sales amounted to RMB 5,519.5 billion, a year-on-year increase of 28.2%. It can be seen that the consumption growth rate continues to be maintained in single digits, which is a relatively sluggish compared with the past. However, the total retail sales of social consumer goods only consider physical consumption, and a large amount of service consumption is not included, but from the trend, the scale of service consumption is increasing. Considering that consumption has contributed more than 50% to the Chinese economy, it is not good news that consumption is sluggish.
Fourth, the rise in consumer prices has accelerated. In August, the national consumer price in China rose by 2.3% year-on-year, an increase of 0.2% over the previous month and a 0.7% increase from month-on-month. From January to August, the national consumer price rose by 2.0% year-on-year. In August, the ex-factory price of industrial producers nationwide rose by 4.1% year-on-year, and the growth rate dropped by 0.5% from the previous month. From January to August, the ex-factory price of industrial producers nationwide rose by 4.0% year-on-year. Compared with the past, the CPI has reached 2.3% in August, and the consumer price increase is expanding. While economic growth is slowing down, investment growth is declining significantly, and consumption remains sluggish, price increases continue to rise. These economic scenarios do not appear to be a good combination; if this trend continues, the possible worrying "stagflation" phenomenon might happen.
Fifth, import and export statistics began to be affected by trade frictions. In August, the total volume of imports and exports was RMB 2,709.7 billion, a year-on-year increase of 12.7%. Among them, exports were RMB 1,444.7 billion, an increase of 7.9%; imports were RMB 126 billion, up 18.8%. The trade surplus was RMB 179.8 billion, a narrowing of 34.2% over the same period of the previous year. As can be seen from the foreign trade statistics, China's imports and exports began to be affected by trade frictions, and the effect has gradually appeared. The surplus in August dropped by 34.2% year-on-year, which is a huge decrease. Affected by trade frictions, the annual trade surplus of China is estimated to decline significantly. This year's net exports will drive a significant decline in economic growth, and may even have negative values.
Judging from the economic statistics in August and the first eight months of 2018, the slowdown in China's economy this year has continued, and the decline of the growth rate has become a trend. This will lead to a decline in economic growth in the first three quarters of this year and will extend to the fourth quarter, forming a pattern of "high first, low later" for the economic growth in the whole year. Under the internal adjustments and external pressures, the Chinese economy will continue to adjust downwards. In the past, the market had expected to encounter "tough days". In reality, this year is the beginning of the real "tough days" and will continue until next year or even the year after next year.
Final Analysis Conclusion:
Overall, the economic situation this year is not optimistic for China, and the country will continue to adjust downwards under internal adjustments and external pressures. This year is the beginning of the real tough days for China.
