The market will not worry about the economic growth. The latest statistics show that major economic data remained stable in May. Despite slight decrease in the investment growth in fixed assets, the investment growth in the manufacturing sector hiked and played a key role in stabilizing investment growth.
The stable economic data in May show that the economic growth has become stable, indicated Zhang Liqun, a researcher at the Development Research Center of the State Council, told the SSN. The economic growth may slow down to 6.8 percent in the second quarter, but the growth of the whole year will not be lower than last year.
Many economic indicators remain stable
The declining economic indicators in April triggered concerns over the economic sustainability in the market. However, major economic indicators showed signs of recovery in May.
According to the statistics released by the National Bureau of Statistics (NBS) on June 14, the real growth of total value added of the industrial enterprises above designated size was 6.5 percent compared with a year ago, growing at the same speed as last month. The Index of Services Production increased by 8.1 percent year on year, growing at the same speed as last month, maintaining the high speed of above 8 percent. The total retail sales of consumer goods recorded a year-on-year rise of 10.7 percent, growing at the same speed as last month.
Previously, the NBS announced that the manufacturing purchasing managers index (PMI) was 51.2 percent, flat from last month. Foreign trade continued to hike in May. The exports increased 15.5 percent, 1.2 percentage points faster than the previous month.
“The economic growth hiked in the first quarter. The market began to worry about the economic growth due to the declining economic data in May. However, the statistics in May show that more signs of stable economic growth will boost the market confidence,” indicated Zhang.
In terms of sectors, the basis for stable investment growth has been established and the exports growth is likely to see positive growth in the whole year. The total retail sales of consumer goods will maintain an increase of about 10 percent. “The basis for economic growth has been established and the economic growth for the whole year will not be lower than the previous year,” indicated Zhang.
The economy was generally stable with a sound momentum in May, indicated Liu Aihua, spokeswoman of the NBS, at the press conference held by the State Council Information Office yesterday. She emphasized that the sound momentum will maintain in the future.
Growth of investment in real estate development slowed down for first time during the year
The NBS’ statistics show that the growth of investment in real estate development, infrastructure and private investment slowed down. The investment in fixed assets slowed to 8.6 percent.
The growth of the total investment in real estate development was 8.8 percent, 0.5 percentage point slower than the first four months. It is the first decline in the growth of the total investment in real estate development. Meanwhile, the land space purchased for real estate development and the floor space of residential buildings sold continued slowing down.
Zhang pointed out that despite the regulation on the real estate, the growth of the investment in real estate development saw no significant declines and the sales indicators maintained double-digit growth. It shows huge demand for residence as a result of the urbanization and the sustainability of the real estate development. Zhang estimated that the growth of the total investment in real estate development will be about 7 to 8 percent this year, which will be higher than 6.9 percent in 2016.
The rigid demand for real estate is at the peak and the property inventory also declined. The downward property cycle will have limited effects on China’s economy in short term, indicated Zhu Jianfang, chief economist at CITIC Securities.
It is noteworthy that the investment in manufacturing hiked to 5.1 percent in the first five months, 0.2 percentage points higher. The investment in manufacturing has played a key role in stabilizing the investment in fixed assets.
With the releasing of major economic indicators in April and May, the market believes that the economic growth may slow down slightly in the second quarter, but it will be rosy for the whole year.
Translated by Star Zhang
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