Warning For Chinese Economy? Shoppers Fail To Keep Pace With Factory Output
In April, China’s retail sales growth decelerated while industrial activity remained robust, according to data released on Friday by the National Bureau of Statistics.
What Happened: Retail sales in April increased by 2.3% year-over-year, falling short of the 3.8% forecasted by a Reuters poll. This growth was also slower than the 3.1% reported in March.
On the other hand, industrial production surged by 6.7% in April, surpassing the anticipated 5.5% growth and marking a significant increase from the 4.5% in March.
Fixed asset investment for the first four months of the year rose by 4.2%, lower than the expected 4.6% increase. Real estate investment, however, saw a steeper decline, down by 9.8% year-on-year for the first four months of 2024.
Despite the overall slowdown, retail sales grew by 6.8% year-on-year during a recent holiday period from Apr. 29 to May 3, according to China’s Ministry of Commerce.
Alibaba Group Holding Limited is trading at HK$ 85.15 on the Hong Kong Stock Exchange, marking a 6.84% increase. JD.com, Inc. is trading at HK$ 132.90, with a slight rise of 0.38%. Additionally, PDD Holdings Inc. is trading at HK$ 143.38, also up by 0.36% after the data release.
Meanwhile, key China-focused ETFs such as KraneShares CSI China Internet ETF 
KWEB, KraneShares Bosera MSCI China A 50 Connect Index ETF KBA, iShares MSCI China ETF 
MCHI, and iShares China Large-Cap ETF FXI have outperformed major U.S.-equity ETFs, signaling a potential shift in the market landscape.
Why It Matters: The recent data release indicates a mixed picture for China’s economic growth. The slowdown in retail sales growth could be attributed to the cooling real estate market and the impact of the May 1 Labor Day holiday.
Despite these challenges, China’s economy is showing resilience. The country’s official GDP grew by 5.3% in the first quarter of 2024, surpassing expectations. This growth was attributed to the stabilization of the property sector and improving external demand, as forecasted by the ASEAN+3 Macroeconomic Research Office.
Despite the economic growth, Chinese exporters are facing a host of challenges, including a decline in exports in dollar terms and a drop in producer prices.
Amid these challenges, JPMorgan’s Jamie Dimon has urged for full engagement with China, emphasizing the need for a nuanced approach to the country.
Read Next: David Tepper Bullish On China: Alibaba Now No. 1 Holding, Trimmed Stakes In Nvidia, Microsoft, Amazon, Meta, Google
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This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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