After getting warmer suddenly, the weather has turned cold again. But the real economy has getting increasingly warmer. Statistics about electricity consumption of industry, volume of railway freight and sales of excavator all beat expectation, showing signs of improvement in the real economy.
Statistics in several industrial aspects beat expectation
Data about national economy for the first quarter of this year will be unveiled next Tuesday. A series of industrial economic data, which was released lately and outperformed expectation, surprised the market.
According to the National Development and Reform Commission (NDRC), electricity consumption of the whole country during January and February grew by 13.3 percent year on year, hitting the fastest growth over last five years. The electricity consumption in industry soared by 11.2 percent from a year earlier, with growth 4.3 percentage points faster than that of last year. Growth in electricity consumption in manufacturing industry quickened. 29 of 31 manufacturing sectors saw positive growth in power consumption.
The NDRC stated that improvement in major economic indicators is the major contributor to rapid growth in total electricity consumption, which is expected to maintain stable growth momentum in April.
As an important indicator for observing the real economy, the recovery in volume of railway freight also proved bettering economy. Statistics showed that the volume of railway freight reached 640 million tons in the past two months, up by 8.8 percent, which was 8.1 percentage points faster than the growth in the fourth quarter of last year.
Sales of some industrial machinery were also better than market expectation. According to statistics from China Construction Machinery Association, 38,261 units of various excavators were sold in March, up by 78.9 percent year on year.
Fiscal data for the first quarter released by the Ministry of Finance (MOF) yesterday also had highlight. Industrial added value tax (VAT) also moved up by 16.6 percent year on year in the first quarter due to quickening industrial production.
“Based on current data, the real economy saw stable operation on the whole.” Tang Jianwei, chief macro-analyst from financial research center of Bank of Communications, said to the reporter of Shanghai Securities News in an interview that the quarterly fluctuation in economic growth of this year will be the same with that of last year, which is not remarkable and stable on the whole. Data beating expectation in several months won’t change the stable development of economy.
Data which was released by the National Bureau of Statistics (NBS) previous was also better than expectation. For instance, purchase management index (PMI) for manufacturing picked up by 1.2 percentage points to 51.5 percent in March, indicating faster expansion in the industry. VAT of industrial enterprises above designated size increased by 7.2 percent year on year in the first two months of this year, with the growth on a yearly and monthly basis going up.
A head responsible for Department of Service Statistics from the NBS said that PMI indicated that China’s economy continued to maintain the momentum with stable growth and development and showed better expectation in the first quarter of this year. There are many favorable factors supporting high-quality development of economy, providing a good start for stable and healthy development of economy throughout the whole year.
Quality and benefits of real economy improved stably
The recovery in real economy was also showed in improvement in quality and benefits.
Change in industry electricity consumption reflects optimization of industrial structure. Statistics of the NDRC showed that growth in power consumption of four high energy-consuming industries slowed down, while that in emerging industries kept growing during January and February. For example, power consumption of computer, communication and other electric equipment manufacturing jumped by 18.5 percent year on year. The increase fell by more than 10 percentage points from the same period of last year.
Production structure of industry keeps being optimized. According to NBS statistics, VAT of high-tech industry and equipment manufacturing gained by 11.9 percent and 8.4 percent from a year earlier, with the growth 4.7 percentage points and 1.2 percentage points faster than that of industrial enterprises above designated size, respectively.
In addition, in terms of operation of industrial enterprises, they saw a good start in revenues and strengthening profitability. Profits of industrial enterprises above designated size surged by 16.1 percent year on year, which was 5.3 percentage points faster than that in December of 2017. They kept the momentum with rapid growth.
An official from the NBS said that with supply-side structural reform promoted, industrial economy took on positive changes, industry revenues kept growing, and enterprises enjoyed good beginning in benefits.
At present, the real economy in the first quarter basically followed the growth track of the fourth quarter of last year and will maintain the stable and growing momentum, said Zhang Jun, chief economist from Morgan Stanley Huaxin Securities.
Translated by Vanessa Chen
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