Industrial production increased 3.9% in April compared to a year ago, according to data released Friday by the National Statistical Office. This is well above the 1.5% growth that analysts interviewed by Refinitiv had expected, and production first grew since December.
Friday’s detailed growth can be attributed to the political pressure Beijing is exerting on factories to resume production, Julian Evans-Pritchard, senior Chinese economist for Capital Economics wrote in a research note on Friday.
Industrial production is expected to continue to grow as politicians in China have indicated that further stimulus measures are on the way.
But it wasn’t good news on Friday for the second largest economy in the world.
Domestic demand remains very weak: retail sales in China fell 7.5% in April compared to the previous year.
“We need to fully assess the risks and challenges” of the pandemic, said NBS spokesperson Liu Aihua, at a press conference in Beijing on Friday. He said that while the virus ravages the rest of the world, China will also continue to be affected.
The country’s recovery “continues but remains very irregular,” wrote Evans-Pritchard, adding that consumer-led sectors of the Chinese economy are still in trouble. The collapse in retail sales, for example, reflects “continuing tension on household finances,” he said.
Analysts predict that measures to keep employment stable will be a key priority at this meeting.
“So far, there are many local wages and factories subsidies to keep hiring stable. But it is obvious that this will not be enough,” said Iris Pang, an economist from Greater China at ING.