ZCZC
BCN-10
CHINA-ECONOMY-RESILIENCE
Physical indicators point to positive changes in Chinese economy: Economic
Watch
BEIJING, June 18, 2018 (BSS/Xinhua) – While China’s May economic data
suggested overall economic resilience, a glimpse into the physical indicators
may provide more details of the positive changes taking place in the economic
picture.
Growth in energy consumption, freight traffic, and producer prices all
picked up last month, pointing to a firming real economy and progress in
structural transformation.
In May, China’s industrial electricity use increased 10.8 percent from a
year ago, picking up from the April level of 7.3 percent, according to data
from the National Bureau of Statistics (NBS).
“This reflects stronger industrial production activities,” said Wen Jianwu,
head of NBS’s department of industrial statistics.
Meanwhile, freight volume, an indicator of goods production and
consumption, increased 8.5 percent year on year last month. Railway freight
in particular jumped 11.8 percent, 10.4 percent higher than the growth in
April.
Last month also saw stronger demand for industrial products, which pushed
up the producer price index (PPI), a measure of industrial product inflation,
by 4.1 percent year on year, the highest growth in four months.
Niu Li, an economist with the State Information Center, said physical
indicators like energy use and freight traffic can be seen as leading
economic indicators, and their healthy growth reflects a strengthening trend
in the real economy.
Data from some less official sources has also showed encouraging signs.
Sales by China’s major excavator producers grew sharply by 71.3 percent year
on year in May, according to the China Construction Machinery Association.
At Sany Heavy Industry Co., Ltd., a heavy machinery manufacturer, the
working hours of heavy equipment including mixing stations, pumping trucks,
and hoisting equipment was on the rise. In the first five months of this
year, Sany’s cranes worked 13.9 percent longer compared with the same period
in 2017 as expansion in manufacturing investment has kept machines busy.
MORE/HR/1108
ZCZC
BCN-11
CHINA-ECONOMY-RESILIENCE 2 LAST BEIJING
This was in line with official investment figures. NBS data showed that
fixed-asset investment in manufacturing climbed 5.2 percent in the first five
months, up from 4.8 percent for January-April.
Continued expansion in manufacturing investment provides evidence of
China’s restructuring progress, as manufacturing upgrading is part of the
country’s ongoing structural reform that aims to draw more strength from
consumption, services, and innovation to support growth.
Amid efforts to drive innovation, the output of China’s high-tech and
equipment manufacturing sectors substantially outpaced last month’s
industrial average, with production of new energy vehicles, integrated
circuits, and robots up 56.7 percent, 17.2 percent, and 35.1 percent,
respectively.
For the service sector, China’s Index of Services Production went up 8.1
percent last month, with modern emerging service industries such as the
internet industry contributing up to 56.8 percent to the service sector
growth, according to the NBS.
In another sign of booming new businesses, electricity consumed by the
software and information technology industry jumped 66.05 percent year on
year in the January-May period, while that of the internet service industry
rose 63.26 percent.
NBS spokesperson Mao Shengyong said at a press conference earlier this week
that the country’s supply side structural reform had prompted robust emerging
sectors and sustained growth in the broader economy.
Earlier data showed China’s economy expanded 6.8 percent year on year at
comparable prices in the first three months.
Wang Changlin, vice president of the Academy of Macroeconomic Research of
the National Development and Reform Commission, said he sees progresses in
economic upgrading and firming trend in real economy.
But he noted that it takes time for high-tech manufacturing to play a key
role in the economy, and China is still facing structural problems in
developing the real economy.
Mao also said that the government would work to further improve the
management system and market environment, with a priority on supporting
private enterprises and small and medium-sized ones.
BSS/XINHUA/HR/1110