China Retail Sales Jump 15%
Resilient demand from Chinese shoppers helped push retail sales up 14.8 percent in April, but a paltry rise in industrial output sapped hopes for a fast recovery.
The mixed signals were typical of data for April, when exports plunged while investment soared — casting doubt on claims the economy is poised for a return to faster growth in the second half of the year, as many economists forecast.
Retail sales, at 934.3 billion yuan ($136.8 billion) in April, have remained relatively firm, growing 15 percent in the first four months of the year, the National Bureau of Statistics reported.
It said growth in demand was strongest for food, clothing, autos and home decoration materials.
The expansion in urban retail sales, which rose 13.9 percent from a year earlier, was outpaced by a 16.7 percent jump in sales in the vast countryside.
But the data released Wednesday also showed industrial output climbing only 7.3 percent, lower than expected and well below the 8.3 percent growth seen in March.
Any recovery remains dependent on improved global conditions, the government warned Tuesday after reporting that exports fell 22.6 percent in April from the year before.
About a quarter of China’s manufacturing capacity is idle thanks to the global slowdown, according to some estimates, and more than 20 million people have lost their jobs as a result.
Much of the manufacturing sector remained weak, with electricity generation — a key indicator of industrial activity — falling 3.5 percent in April to 271.3 billion kilowatt hours, compared with a 1.3 percent decline in March.
But some key sectors are still growing at double-digit rates.
Auto production rose nearly 18 percent from a year earlier to 1.18 million vehicles, with passenger car output up 17.3 percent to 589,000 units, the Statistic Bureau reported.
That coincided with a 37 percent year-on-year increase in passenger car sales in April, to 830,000 units.
Cement output likewise jumped, by 13 percent to 150 million tons, as construction backed by a 4 trillion yuan ($586 billion) stimulus package accelerated.
But economists warn that some of those gains may not be sustainable.
Auto sales have surged, but largely due to tax cuts and government policies aimed at promoting sales of small, fuel efficient vehicles.
“Incentive-driven demand may last only as long as the government tax breaks and subsidies remain in place,” Jing Ulrich, chairwoman for China equities said in a report Wednesday.
Looking ahead, the full impact of massive investment in factories, construction and other projects in the first months of the year has not yet been felt, she said.
“The rollout of China’s fiscal stimulus package will spur demand in a wide range of industries, supporting increased production in the months to come.”
5/13/2009 3:07 AM ELAINE KURTENBACH AP Business Writer SHANGHAI