China's Economy Shows Signs of Slowing Amid US Trade War

Strategic Insights -

China's economy has shown signs of slowing in April, with retail sales, property, and investment coming in weaker than economists had forecast, according to the country's National Statistics Bureau. The slowdown is attributed to the US trade war, which has imposed high tariffs and retaliatory duties on Chinese exports. Industrial production slowed as shipments were curtailed, while retail sales rose 5.1% from a year earlier, below expectations. The Consumer Price Index fell 0.1% in April, a symptom of weak demand and a factor behind shoppers' reluctance to spend.

Key Takeaways:

  • Retail sales rose 5.1% from a year earlier in April, below economists' expectations for a 6% increase. This is a sign of consumers holding back after the shocks of a prolonged downturn in the housing market.
  • Industrial production rose 6.1% from a year earlier, slowing from 7.7% in March due to tariffs and trade barriers on exports.
  • The government reported that fixed asset investment rose 4% in April in the first four months of the year, but property investments fell 10.3% year-on-year in January to April.
  • New home prices edged lower, indicating a continued pressure on the housing market.
  • The trade war is complicating Beijing's effort to turn the housing market around and keep the economic recovery on track.
  • China must stop prices from falling to promote a reasonable recovery of prices, according to Fu Linghui, National Statistics Bureau spokesperson.

Statistics:

  • Retail sales rose 5.1% from a year earlier in April.
  • Industrial production rose 6.1% from a year earlier in April.
  • Fixed asset investment rose 4% in April in the first four months of the year.
  • Property investments fell 10.3% year-on-year in January to April.
  • New home prices edged lower.
  • US consumer sentiment has fallen slightly in May for the fifth straight month.
  • 90-day truce in the US-China trade war has helped revive shipments.

Sources:

  • Fu Linghui, National Statistics Bureau spokesperson.
  • Oxford Economics.
  • ING Economics, Lynn Song, chief economist for Greater China.
  • China's National Statistics Bureau.