Chinese Industrial Output Posts Surprise Growth

The industrial output on the mainland returned to growth for the first time this year in April, official data showed on Friday, as the country continued its gradual recovery after the coronavirus brought activity to a near-halt.

Industrial production grew a more-than-expected 3.9 percent year-on-year last month in a sign that the country is recovering from tough lockdown measures now seen in other parts of the world.

A Bloomberg poll of analysts had forecast growth of 1.5 percent.

But retail sales remained in contraction territory, National Bureau of Statistics (NBS) data showed, signalling that consumer demand is still weak despite the mainland’s initial success in containing the outbreak.

Retail sales were down 7.5 percent from a year ago, an improvement from a 15.8-percent plunge in March.

Industrial production growth last month was better than the 1.1-percent contraction in March and 13.5-percent collapse in the first two months of 2020 as well – the first time industrial output shrank in three decades as the virus ravaged the economy.

Unemployment, however, crept up by 0.1 percentage points from March, to 6 percent, adding to concerns over a post-pandemic rebound.

Nomura analysts said in a recent report that markets may have been "overly optimistic" about a swift recovery on the mainland, pointing to collapsing external demand due to the spread of the pandemic and the growing threat of a second wave of Covid-19 infections.

They added that a moderate rebound in locally transmitted cases in recent days remains a concern also.

"Retails sales during this year’s Labour Day holiday were still down 6.7 percent from last year, and revenue for the catering and accommodation industries only recovered to around 70 percent of normal levels," said Nomura. (AFP)