CHINA’S economic data for April missed expectations last month, official figures showed today, as low demand and high youth unemployment led to a patchy recovery after lifting strict Covid rules.

Retail sales – a key indicator of domestic consumer activity – grew 18.4% on-year, data released by the National Bureau of Statistics showed.

The reading was short of the 21.9% forecast in a survey of economists by Bloomberg, even as shoppers and diners returned to malls and restaurants.

Low domestic demand despite low inflation has slowed China’s economic recovery.

Beijing has set a growth target of around 5% this year, the lowest goal in decades, with Premier Li Qiang warning it “will be no easy task”. 

Zhang Zhiwei, chief economist at Pinpoint Asset Management, said: “The growth target for this year is set at a low level, which leaves room for the government to wait and see.”

Unemployment among China’s urban 16-24-year-olds reached a record high of 20% in April, as the services sector was slow to absorb millions of rural migrants flocking to cities.

Overall urban unemployment slipped to 5.2% last month, from 5.3% in March. 

Industrial production for April rose 5.6%, a little more than half the 10.9% growth expected as factories gradually returned to full capacity after scrapping disruptive lockdown rules.

Fixed asset investments from January through April increased 4.7%, below the 5.7% forecast, as debt-laden local governments were forced to cut back on big infrastructure projects. 

China’s central bank yesterday said the world’s second-largest economy was not on course to suffer from deflation, after data showed consumer prices edged up just 0.1% year-on-year last month, the slowest rate recorded since 2021. 

“Consumer prices are still rising moderately… and economic operations continue to improve, which does not conform to the characteristics of deflation,” the report reviewing monetary policy implementation in the first quarter said.

“In the medium- and long-term, there is also no basis for… deflation.” – AFP, May 16, 2023.