Surprisingly weak growth in China’s industrial production and consumer spending is fueling worries about the country’s economic recovery, which is important for the global economy. According to government data on Tuesday, Chinese industrial production in April rose by 5.6 percent compared to the same period last year, but was below the expectation of almost eleven percent. At 18.4 percent, the increase in retail sales was also lower than economists had expected. The growth seems clear at first glance, but a year ago the government’s strict corona measures with lockdown in megacities like Shanghai almost paralyzed the economy in many areas.
The latest data underscores recent concerns about China’s recovery from the coronavirus dip. Foreign trade lost momentum in April, exports grew more slowly and imports fell significantly. In addition, inflation had continued to weaken, which had even raised fears of deflation among some experts.
At least the low inflation gives the Chinese central bank scope for economic support. The central bank had already announced on Monday that monetary policy would continue to be relaxed accordingly. Experts are already counting on further easing.
In addition to the consequences of the strict zero-Covid policy, which was only lifted at the end of 2022, China’s economy is suffering from the consequences of a real estate bubble in parts of the country. In addition, interest rates have risen worldwide as a result of high inflation in many countries, which makes borrowing in foreign currency more expensive for Chinese companies. (dpa)