S
Source: ANBOUND
Monday, September 16, 2019

The economic data published by China's National Bureau is an indication of the health of the country's economy. Although the official data may not fully reflect the overall picture of China's economy, and acknowledging the fact that the slowing down of the Chinese economy is no news, the latest data in August shows that the downward pressure on the Chinese economy continues to increase.

Looking at investments, China's fixed-asset investment (excluding farmers) was RMB 400.628 billion from January to August in 2019, a year-on-year increase of 5.5%. The growth rate dropped by 0.2 percentage points from January to July, and it was the lowest investment growth since October last year. Among these, the private fixed assets investment was RMB 236.963 billion, an increase of 4.9%, and the growth rate dropped by 0.5 percentage points from January to July. It should be emphasized that on the basis of the implementation of active fiscal policies and increased infrastructure investment by Chinese governments at all levels, the growth rate of national and private fixed asset investments continues to decline, indicating that domestic investments are weak and market vitality continues to decline.

Concerning the industries, in August this year, the added value of industrial enterprises above designated size increased by 4.4% year-on-year, with the growth rate dropping by 0.4 percentage points from the previous month, which is also the lowest monthly growth rate in the year. In terms of economic types, the value-added of state-owned holding companies increased by 4.1%, joint-stock enterprises increased by 5.3%, and foreign-invested enterprises, which include enterprises from Hong Kong, Macao, and Taiwan increased by 1.3%. From January to August, the added value of industrial enterprises above designated size increased by 5.6%, and the growth rate dropped by 0.2 percentage points from January to July. The slowdown in industrial growth reflects both the overall slowdown of the Chinese economy and the impact caused by China's economic restructuring and by the ongoing trade war in the industrial sector.

If we look at real estate investment, the national real estate development investment was RMB 845.89 billion from January to August, a year-on-year increase of 10.5%. Although it maintained a double-digit investment growth rate, it fell 0.1 percentage point from January to July. Among them, residential investment was RMB 6.2187 billion, an increase of 14.9%, despite the growth rate dropped by 0.2 percentage points. From January to August, the sales area of commercial housing was 101.849 million square meters, down 0.6% year-on-year, and the decline was 0.7 percentage points lower than that in the January-July window.

As the main engine of the Chinese economy, the performance of consumption is not ideal. In August 2019, the total retail sales of consumer goods nationwide totaled RMB 3,389.6 billion, representing only a nominal increase of 7.5% year-on-year (actual growth of 5.6%). This is the second-lowest monthly consumption growth rate of the year. Among them, the retail sales of consumer goods other than automobiles were RMB 3,084.5 billion, an increase of 9.3%. From January to August this year, the total retail sales of consumer goods reached 262.179 billion yuan, an increase of 8.2% year-on-year. As consumption has become the main driving force of the Chinese economy, the slowdown in the growth of this main engine will increase the downward pressure on the Chinese economy.

Foreign trade data has also clearly reflected the impact of the trade war and the weakening of the condition of the Chinese economy. In August, the total import and export volume was RMB 2.7175 trillion, a year-on-year increase of only 0.1% from the year before. Among them, exports were RMB 1,478.6 billion, up 2.6%. Imports were RMB 1,239 billion, down 2.6%. Meanwhile, the trade surplus was RMB 239.6 billion. From January to August, the scale of trade continued to expand, with a total import and export volume of RMB 2012.94 billion, an increase of 3.6%. Among them, exports were RMB 1,091.9 billion, up 6.1%. Imports were RMB 917.75 billion, an increase of 0.8%. It should be noted that trade friction has certainly impacted exports and imports, but the slowdown in demand caused by economic problems in the domestic market is also an important factor for the decline in imports.

At the same time, there is increasing pressure on employment in China. From January to August, the number of new jobs in urban areas reached 9.84 million, and the target of the annual plan was 89.5%. From the urban survey unemployment rate, the national urban survey unemployment rate was 5.2% in August, down 0.1 percentage points from the previous month. The unemployment rate of the 25 to 59-year-old population range surveyed was 4.5%, down 0.1 percentage point from the previous month. In August, the unemployment rate of junior college graduates and above was 1.9 percentage points lower than that of the previous month. Although the unemployment data has fallen as a whole, the unemployment rate in the national urban survey has increased in July. There are about 15 million new laborers in China who need to work in cities and towns every year. It is also necessary to consider the transfer of 3 million agricultural-based surpluses of labor. Therefore, the arduousness and complexity of being employed are unprecedented. In the past, striving for stable employment may purely be a gesture or display, but achieving steady employment this year is an urgent reality.

As seen from the latest data in August, the vast majority of China's economic growth indicators are slowing down. This means that China's economy is in a downtrend, and the pressure of slowing growth is continuing to increase.

In a recent interview with the Russian media, Chinese Premier Li Keqiang said that China's GDP in 2018 has reached US$ 13.6 trillion, accounting for nearly 16% of the world economy. The expected target of China's economic development this year is achieving economic growth of 6%-6.5%, an urban-rural unemployment rate of 5.5%, and increases in consumer prices of about 3%. Looking at the situation in the first eight months, China's economic performance has been generally stable. In the first half of the year, its GDP grew by 6.3% year-on-year. The main economic indicators were in line with expectations and fall within a reasonable range. Premier Li stated that in the current complicated international situation, it is not easy for the Chinese economy to maintain a medium-to-high-speed growth of more than 6% on a higher base. From the statement of Premier Li to the Chinese economy, we can see the complexity of the current economic situation in China and the severity of the challenges it is facing.

Final analysis conclusion:

The Chinese economy in 2019 has shown a clear slowdown in growth, and it may fall further in the future. ANBOUND has pointed out that the challenges in maintaining a 6% economic growth have already obviously displayed themselves in the second half of this year. "Winter is coming", in an economic sense, and this is likely to happen to China at the end of the year.

Latest ReportsMore ..

What Happened Before? - The Formation of the Belt and Road Initiative

Tuesday, September 10, 2019

A Study on Chinese Overseas Investment Against U.S.-China Trade Spat

Wednesday, January 23, 2019

Chen Gong: From Crisis Triangle to Utopia

Saturday, December 29, 2018

Expert InterviewsMore ..

China to maintain status quo of trade war with US, says Think Tank

Friday, October 11, 2019

The Unlikely Chinese Cities Where House Prices Rival London

Thursday, September 05, 2019

Fear and Uncertainty Drive Gold

Friday, August 30, 2019

NewsMore ..

Main highlights: 6th World Internet Conference on Oct 20-22

Monday, October 14, 2019

China's icebreaker Xuelong completed overhaul, ready for Antarctic expedition

Monday, October 14, 2019

Trio win Nobel Economics Prize for work on poverty

Monday, October 14, 2019

BookstoreMore ..

Urbanization

Author:

Chen Gong

Publisher:

17 Days of the Disappearance of MH370

Author:

Chen Gong

Publisher:

THINK LIKE ANBOUND: UNDERSTAND CHINA AND THE WORLD

Author: Chen Gong and Others

Publication Date:November 2017

Publisher: China Financial & Economic Publishing House

What's onMore ..

CNIA and ANBOUND Signed A Memorandum of Understanding on Research Cooperation

Friday, April 26, 2019

KDI School Prof. II-Chong Nam Visited Anbound

Monday, April 08, 2019

ESI partners Dr. Richard Voith and Dr. Daniel Miles visit Beijing

Friday, March 29, 2019

FOLLOW US ON TWITTER
Check out our
tweets & activity
FIND US ON FACEBOOK
Connect and share
with us
Links
 
Copyright © 2012-2019 ANBOUND RESEARCH CENTRE (MALAYSIA) SDN BHD